Stocks Sink as Sentiment Sours
[BRIEFING.COM] The tone of trade has been negative since the start as market participants react to rekindled concerns about the possibility of contagion in Europe and a disappointing U.S. jobs report.
Grave economic conditions and the absence of an austerity plan in Hungary have made talks of default by the country very real. While it is not a part of the eurozone, Hungary is a member of the European Union (EU), so many worry that the EU will have to provide a bailout.
With financial conditions in the continent clearly tenuous, the euro has dropped precipitously. The euro was recently down 1.4% against to $1.199, a new four-year low.
As if those developments weren't enough to encourage selling, market participants were dealt a disappointing nonfarm payrolls report for May. The report featured a smaller-than-expected increase of 431,000 nonfarm jobs. Underlying the headline number was a much more tepid increase in private sector hiring than many had anticipated.
A barrage of heavy selling followed the headlines. There was a brief, midmorning attempt to stabilize, but stocks have fallen back under a wave of weakness and now trade near session lows with all 10 major sectors are down with losses of nearly 2% or more. Moreover, declining volume outnumbers advancing volume by almost 15-to-1 on the NYSE.
Such sour sentiment has triggered a spike in volatility. Specifically, the Volatility Index is up more than 13%, but it remains shy of its weekly high.
Treasuries have attracted strong support in the face of the increased volatility and sharp losses among stocks -- the benchmark 10-year Note is up more than a point and its yield is below 3.22%.
Market Breadth Remains Decidedly Negative
[BRIEFING.COM] The S&P 500 recently retreated to a fresh session low at 1075, but it was able to attract some modest support there. Still, losses remain steep and widespread as all 10 major sectors contend with losses that range from 1.6% (utilities) to 3.6% (industrials).
Industrials Take Brunt of Selling
[BRIEFING.COM] Industrial stocks have taken a beat down from sellers. The sector is now down 3.4%, worse than any other major sector, as all 57 of its members trade in negative territory. Textron (TXT 19.44, -1.21),Jacobs Engineering (JEC 41.40, -2.30), and Ryder System (R42.59, -2.32) are among the worst performers in the sector.
Despite the sector's weakness during the past couple of sessions, industrial stocks remain some of the better performers of 2010. Specifically, the sector is up 2.4% year-to-date, while the broader market is down 3.5% since the start of the year.
Stocks Extend Slide
[BRIEFING.COM] The S&P 500 has slipped to a fresh session low. It is now down more than 2%.
Though total volume has decelerated, declining volume continues to outweigh advancing volume by a staggering 11-to-1.
Meanwhile, Treasuries continue to push higher, such that the benchmark 10-year Note is now up 42 ticks.
11:00 ETEnergy Stocks Limit Losses
[BRIEFING.COM] Trade has been choppy, but weakness remains widespread. There isn't any real leader this session, but the energy sector has managed to limit its loss to 0.8%, which is about half of what the broader market currently faces.
The energy sector is currently led by oil and gas explorers, which are up 0.7%. Oil and gas equipment plays have added support by pushing to a 0.5% gain of their own. BP Plc (BP 38.11, -1.16) is back under pressure despite reports that it has managed to capture some of the oil flow in the Gulf of Mexico.
Natural Gas Prices Continue Climb
[BRIEFING.COM] The CRB Commodity Index is down 0.7% this session. It is also on its way toward a 0.7% weekly loss.
Lower oil prices account for most of the CRB's weakness. The commodity is currently down 1.6% to $73.40 per barrel as it surrenders part of its gain from the prior session, when it climbed more than 2%.
Natural gas prices spiked almost 6% in the prior session and have added another 1.5% to that move in this session's pit trade. The commodity is currently at $4.76 per MMBtu.
Precious metals continue to trade with weakness, despite renewed concerns about contagion in Europe and questions about the health of the U.S. economy amid a softer-than-expected increase in monthly nonfarm payrolls. Gold was last quoted with a 0.4% loss at $1203.70 per ounce, while silver is down a sharp 2.0% to $17.58 per ounce.
Pressure Persists
[BRIEFING.COM] Stocks continue to contend with a stiff bout of selling pressure. That has caused to Volatility Index to spike more than 10% to 32.5, but it remains below its weekly high of 35.7.
Treasuries have continue to attract support in the face of increased volatility and sharp losses among stocks. Specifically, the benchmark 10-year Note is up nearly one full point. That has dropped its yield toward 3.25%.
Advancing Sectors: (None)
Declining Sectors: Industrials (-2.4%), Financials (-2.2%), Consumer Discretionary (-1.8%), Materials (-1.8%), Health Care (-1.7%), Consumer Staples (-1.6%), Utilities (-1.6%), Telecom (-1.4%), Tech (-1.3%), Energy (-1.2%)
Weak Start for Stocks
[BRIEFING.COM] Widespread weakness has taken the major equity averages to sharp losses in the first few minutes of trade. Specifically, all 10 major sectors in the red with losses of at least 1%. Pressure is most pronounced among industrial stocks -- the sector is down 2.1%.
Amid such a steep, broad-based slide, the stock market is on pace for a weekly loss of roughly 0.4%.
Market is Closed
[BRIEFING.COM] S&P futures vs fair value: -22.60. Nasdaq futures vs fair value: -42.00. Rekindled concerns about the possibility of contagion in Europe and a disappointing U.S. jobs report have led to stiff selling among premarket participants. In turn, stock futures point to a sharply lower start. A weaker euro – currently down 1.0% to $1.204 – has also dampened early sentiment. The currency fell to a new four-year low amid worries that the European Union will have to provide a bailout to Hungary, which has had to grapple with grave economic conditions and does not plan to implement any austerity measures. Meanwhile, economists and market pundits are contemplating the implications of a smaller-than-expected increase in nonfarm payrolls for May. The report indicated that 431,000 nonfarm jobs were added last month, but the consensus had called for something closer to an increase of 500,000, while some had speculated that the number would be even higher.
Market is Closed
[BRIEFING.COM] S&P futures vs fair value: -21.50. Nasdaq futures vs fair value: -38.80. A disappointing jobs report has caused increased selling among Europe’s major bourses, which had already been contending with widespread weakness after Hungary rekindled contagion concerns when its officials said its economy is in grave condition and that default talk is not exaggerated. Since Hungary does not plan to take austerity measures there is concern that the European Union will have to stage a bailout. That has caused the euro to drop to a new multiyear low against the greenback – it is currently down 1.0% to $1.205. As for equities, Germany’s DAX is down 1.9%. All 30 of its components are in the red. France’s CAC is down 2.6%. Not one of its 40 members have managed to muster a gain. Britain’s FTSE is down 1.6%. BP Plc (BP) has made its way to a solid gain in the face of the selloff; its strength stems from reports of progress regarding the Gulf spill. Trade in Asia finished in lackluster fashion. Japan’s Nikkei slipped just 0.1% as declining issues had a slight edge over decliners. Fast Retailing was a primary laggard as it gave up part of its gain from the prior session. Hong Kong’s Hang Seng settled fractionally lower even though its decliners outnumbered its advancers by 2-to-1. Energy outfitCNOOC (CEO) was a key source of weakness, but global banking giant HSBC (HBC) provided support. Mainland China’s Shanghai Composite finished with a fractional gain even though advancing issues had better than a 2-to-1 advantage over decliners. Kweichow Moutai was a leader, but Bank of China proved to be a drag.
Market is Closed
[BRIEFING.COM] S&P futures vs fair value: -21.50. Nasdaq futures vs fair value: -37.30. Stock futures have fallen to fresh morning lows and the yield on the 10-year Treasury Note has retreated to below 3.27% on the back of a disappointing monthly jobs number. Official nonfarm payrolls for May climbed by 431,000, which is below the increase of 500,000 that had been widely expected after 290,000 nonfarm payrolls were added in the prior month. The unemployment rate for May came in at 9.7%, which is below the 9.8% that had been anticipated and down from the 9.9% of the prior month. Additionally, the average workweek increased to 34.2 from 34.1 in the prior month. It had been expected to stay at 34.1.
Market is Closed
[BRIEFING.COM] S&P futures vs fair value: -8.30. Nasdaq futures vs fair value: -16.80. Stocks settled the prior session with varied gains, but any sort of follow through has been undermined by renewed concerns about contagion in Europe, where officials from Hungary stated that their economy is in a grave situation and that default talk is not an exaggeration. The officials also stated that austerity measures will not be implemented, so some wonder whether the European Union will have to provide a bailout. In turn, the euro has dropped to a new multiyear low against the dollar – it currently trades with a 0.8% loss at $1.206. Though those developments have dampened the mood among premarket participants, the pivotal nonfarm payrolls report for May will provide a key trading catalyst with its release at the bottom of the hour.
Market is Closed
[BRIEFING.COM] S&P futures vs fair value: +2.10. Nasdaq futures vs fair value: +2.80.
Market is Closed
[BRIEFING.COM] FTSE...5234.62...+23.40...+0.50%. DAX...6099.58...+45.00...+0.70%.
06:26 ETMarket is Closed
[BRIEFING.COM] Nikkei...9901.19...-13.00...-0.10%. Hang Seng...19780.07...-6.60...0.00.
Broader Trade Muddled Ahead of Payrolls Report
[BRIEFING.COM] A barrage of economic reports provided plenty of catalysts for trade, but broader market muddled along for most of the session. Large-cap tech led the Nasdaq to a strong gain, though.
Market participants got a preview of tomorrow's pivotal nonfarm payrolls report with the release of the May ADP Employment Change report, which indicated that private sector payrolls increased by 55,000 last month. However, that was actually weaker than the 70,000 increase that had been widely expected.
Initial claims for the week ended May 29 totaled 453,000, which is on par with the 455,000 initial claims that many had come to expect. Continuing jobless claims climbed to 4.67 million, which is more than the 4.61 million that had been expected.
The ISM Services Index for May came in at 55.4, which is in-line with expectations for a reading of 55.6.
Factory orders for April increased 1.2%, which is a slower rate than the 1.7% increase that many had expected.
In other economic news, first quarter nonfarm productivity increased of 2.8%, which is less than the expected 3.3% increase. Unit labor costs for the first quarter fell 1.3%, which is a softer decline than the 1.6% drop that had been widely expected.
There was an underwhelming response to the large dose of data. Corporate headlines, which were generally limited, also did little to inspire.
Roughly half of the monthly same-store sales reports in Briefing.com's coverage universe missed expectations. That left the group to lag the broader market for the better part of the session and finish with a fractional gain.
BP Plc (BP 39.27, +1.61) had its debt downgraded by analysts at Fitch, but the stock managed to rally and settle at a session high as energy stocks caught a late bid amid comments from Senator Reid about lifting the damage liability cap on companies in response to the oil spill in the Gulf of Mexico. Energy stocks settled with a 1.1% gain.
Strength in the energy sector was likely helped by higher prices. Specifically, crude oil futures prices closed pit trade with a 2.4% gain at $74.61 per barrel. Its strength came from a combination of rising concerns about supply constraints and inventory data that showed a surprise draw of 1.90 million barrels.
Tech also finished the session with a 1.1% gain. Large-cap plays like Google (GOOG 504.98, +11.61),Microsoft (MSFT 26.86, +0.40), and Cisco (CSCO 23.72, +0.37) underpinned the sector's strength and helped the tech-rich Nasdaq outperform the other two headline indices.
While tech and energy, two of the largest sectors by market weight, were strong, the broader market spent the session chopping along in lackluster fashion. The muddled trade came partly in response to a weaker euro, which fell 0.7% to the $1.216 level.
Technical resistance also kept a cap on the broader market's moves. While buyers still showed modest support, they appeared to lack conviction as the S&P 500 faded near its 200-day moving average.
Trading volume was relatively light in that 1.2 billion shares exchanged hands on the NYSE this session. That's below the 50-day moving average of almost 1.4 billion shares.
Advancing Sectors: Tech (+1.1%), Energy (+1.1%), Utilities (+1.0%), Industrials (+0.5%), Health Care (+0.5%), Consumer Discretionary (+0.4%), Telecom (+0.2%), Consumer Staples (+0.1%)
Declining Sectors: Materials (-1.1%), Financials (-0.5%)
No comments:
Post a Comment