YAHOO [BRIEFING.COM]: Renewed
selling pressure sent stocks to their second straight loss as $100 oil spooked
participants. Technical support helped limit the downturn.
The mood among participants
was mixed in the opening minutes of trade, but the tone quickly soured as oil
prices extended their climb to new two-year highs amid ongoing concerns related
to social and political turmoil in the Middle East and North Africa. At its
session high, oil traded at $100 per barrel on the nose. Prices were backed
down in afternoon trade so that the energy component settled pit trade with a
2.8% gain at $98.10 per barrel. Weekly oil inventory figures will be released
tomorrow morning.
Oil's late morning and early
afternoon climb induced renewed selling pressure among stocks. At its session
low, the S&P 500 was down 1% to the 1300 line. However, support at that
level combined with oil's pullback from the $100 mark so that stocks were able
to catch some relief.
Trading volume was up sharply
for the second straight session, but the 1.33 billion shares that exchanged
hands today on the NYSE was the highest tally in two months.
Although the broad market
closed comfortably above its session low, energy was the only major sector to
finish with a gain. Higher oil prices helped energy stocks outperform for the
entire session and settle with a 2.0% gain. Chesapeake Energy (CHK
34.33, +2.32) was one of the sector's top percentage gainers after it posted a
better-than-expected earnings report.
At the other end of the
spectrum, industrial stocks endured the sharpest selling. That sector shed 1.8%
as FedEx (FDX 89.25, -4.04) fell more than 4% as investors
considered the consequence of higher fuel costs on the operations of the global
delivery company.
Retailers also had a rough
session. They fell 1.8% as a group. TJX Co (TJX 48.81, -0.91)
traded in line with the group after its disappointing outlook overshadowed an
upside earnings surprise. Saks (SKS 11.86, -0.31) and home
improvement retailer Lowe's (LOW 25.73, -0.26) also logged
losses, despite their own upside earnings surprises. In contrast, Chico's
FAS (CHS 13.15, +1.09) overcame an earnings miss to climb sharply to a
six-month high.
Hewlett-Packard (HPQ 43.10, -5.13) tumbled almost 10%
after its upside earnings surprise was ignored because of a light revenue
figure and a disappointing forecast.
Toll Brothers (TOL 21.20, +0.44) had
better-than-expected earnings and scored a gain. The stock will likely come
back into focus tomorrow, which is when the latest new home sales report will
be posted.
Existing home sales for
January were reported today. They increased 2.7% month over month to an
annualized rate of 5.36 million units, which is greater than the rate of 5.23
million units that had been expected, on average, among economists polled by
Briefing.com.
In the face of further
weakness among stocks, Treasuries at the short end of the yield curve lacked
support. Pressure in the space picked up after a $35 billion auction of 5-year
Notes drew a yield of 2.19%, a bid-to-cover of 2.69, and an indirect bidder
participation rate of 34.2%. However, the 30-year Bond was able to advance so
that its yield moved down to 4.58%.
Energy continued its tear
today, adding another 2.9%. April WTI crude oil rallied for 2.8% to close at
$98.10 per barrel. The rally was, once again, supported by concerns about
supply disruptions in the Middle East. Various reports indicate that anywhere
between 25%-50% of Libya's oil production has been shut in due to the ongoing
protests. Prices traded to $100 per barrel exactly in early afternoon trade, a
fresh ~2.5 yr high, but pulled back close to 2 points heading into the close.
March natural gas gained 0.1% to finish at $3.89 per MMBtu.
Precious metals added 1.1%
today, helped by a flight to safety over concerns about the Middle East as well
as the continued sell off in equities. April gold finished higher by 0.8% to
$1414.00, while March silver rallied for 1.4% to end at $33.29 per ounce.
Advancing Sectors: Energy (+2.0%)
Declining Sectors: Consumer Staples (-0.2%), Utilities (-0.4%),
Financials (-0.4%), Materials (-0.7%), Health Care (-1.0%), Telecom (-1.0%),
Tech (-1.3%), Consumer Discretionary (-1.5%), Industrials (-1.8%)DJ30 -107.01
NASDAQ -33.43 NQ100 -0.9% R2K -1.6% SP400 -1.4% SP500 -8.04 NASDAQ Adv/Vol/Dec
629/2.48 bln/1996 NYSE Adv/Vol/Dec 1062/1.33 bln/1959