Stocks Down By Steep Margins Amid Another Volatile Session
Europe continues to pressure sentiment today, as a unilateral German ban on short selling of euro denominated government bonds and big bank stocks has driven global equities sharply lower and fueled concerns about the long-term viability of the single currency.
With Germany acting on its own following the struggle to hammer out a European plan to backstop the sovereign debt of Greece and other vulnerable nations, questions have been raised about how cohesive the European Union will be as the debt crisis continues to swell.
With overseas concerns largely grabbing headlines, traders shrugged off data from the U.S. Labor Department, which said that its consumer price index edged down by 0.1 percent in April following a 0.1 percent increase in March. The modest decrease came as a surprise to economists, who had been expecting another 0.1 percent increase in prices.
Excluding a notable drop in energy prices as well as a modest increase in food prices, the core consumer price index came in unchanged for the second consecutive month. Economists had expected core prices to edge up by 0.1 percent.
The Federal Open Market Committee is also scheduled to release the minutes of its April 27th-28th meeting at 2:00 p.m.ET, with the focus of the markets likely to be pegged squarely on the featured economic commentary.
On the earnings front, Target Corp. (TGT) reported first-quarter earnings of $0.90 per share, topping forecasts that called for earnings of $0.87 per share. Sales for the quarter grew 5.5 percent to $15.16 billion. Wall Street analysts anticipated revenues of $15.58 billion.
BJ's Wholesale Club, Inc. (BJ) reported first-quarter net income that was better than expected and revenues that were in-line with projections. The company also announced an upward revision to its earnings guidance for fiscal 2010.
Farm machinery maker Deere & Co. (DE) unveiled second-quarter net income and revenues that both beat Street estimates.
After the markets closed for trading in the previous session, Hewlett-Packard Co. (HPQ) said that its second quarter profit jumped 28 percent from last year, as revenue increased and margins improved amid strong demand for its servers and personal computers as well as its printers.
The major averages have bounced well off their lows for the session in recent trading, but they currently remain stuck in the red. The Dow is down 58.27 points or 0.6 percent at 10,452.68, the Nasdaq is down 19.77 points or 0.9 percent at 2,297.49 and the S&P 500 is down 5.96 points or 0.5 percent at 1,114.84.
Sector News
Gold stocks are seeing heavy selling in morning trading, with the NYSE Arca Gold Bugs Index sliding by 4.1 percent, setting a two-week intraday low. The weakness in the sector comes as gold for June delivery is down by $16.40 to $1,198.20 an ounce.
Significant weakness has also emerged among steel stocks, as reflected by the 1.7 percent drop by the NYSE Arca Steel Index. With the decline, the index is on target for its lowest closing level in over three months.
Rio Tinto (RTP) is moving notably lower within the steel sector, falling by 3.8 percent. The pullback has the stock on pace for its lowest closing price in over seven months.
Airline, oil service, defense, railroad and housing stocks are also under pressure, among others, as the markets are seeing another day of widespread selling.
Stocks Driven By Analyst Comments
TJX Companies (TJX) is moving notably lower after being downgraded by analysts at Goldman Sachs to Neutral. The stock has fallen by 1.3 percent and is on pace for its lowest closing price in nearly seven weeks.
Under Armour (UA) is also under pressure following a downgrade to Sell by analysts at Sterne Agee. Shares are currently down by 3.7 percent, offsetting recent gains and headed back down towards the six-week closing low set earlier this month.
On the other hand, Watson Pharmaceuticals (WPI) is moving higher after being upgraded at JP Morgan chase from Overweight from Neutral. The broker also raised its target on the stock from $48 to $52. The stock is up by 0.8 percent, moving back towards last week's six-year closing high.
No comments:
Post a Comment