YAHOO [BRIEFING.COM]: Domestic markets were closed on Monday in
observance of Memorial Day so trade this week started on Tuesday, when stocks
advanced more than 1% amid speculation that plans for new spending in
Data on Tuesday came with little consequence. The Consumer
Confidence Index for May fell to 64.9 from a downwardly revised 68.7 in the
prior reading. The
Sentiment among market participants soured
by Wednesday, when the major equity averages fell in excess of 1% in response
to renewed worries about the health and fate of the eurozone.
Rumors regarding European bank recapitalizations were shrugged off.
News of a 5.5% drop in pending home sales during April failed to
improve the mood since a 0.6% increase had been broadly expected.
The flow of data picked up on Thursday, but the underwhelming
nature of the numbers forced the S&P 500 down to the 1300 line before
buyers stepped in to provide support.
First quarter GDP was revised downward to reflect growth of 1.9%.
Many economists had thought that the 2.2% increase featured in the preliminary
reading would be revised to reflect growth of 2.0%.
Market participants were given a preview of the jobs picture via
the latest ADP Employment Change. It showed that private payrolls increased
during May by 133,000, which is less than the increase of 157,000 that had been
expected, on average, among economists polled by Briefing.com.
The latest weekly initial jobless claims count increased to
383,000, which is more than the tally of 368,000 that many had come to expect
following several straight weeks with initial claims staying near 370,000.
Trading volume on the NYSE surged to more than 1 billion shares on
Thursday, which marked the final day of May. During the course of the month the
S&P 500 sank more than 6% for its worst monthly performance since
September.
Participants were compelled to sell on Friday by another round of
disappointing data.
As if to compound concerns about the eurozone’s
fiscal, financial, and economic conditions, a batch of banal PMI numbers were
released by Europe after a lackluster PMI reading from
Official numbers indicate that nonfarm payrolls increased in May by
69,000, which is far less than the increase of 150,000 that had been expected,
on average, among economists polled by Briefing.com. Nonfarm private payrolls
increased by a mere 82,000, which is also hardly half of what had been broadly
forecasted – the Briefing.com consensus had called for an increase of 168,000.
What’s more, the headline unemployment rate ticked up to 8.2%. Most
economists expected it to remain at 8.1%.
Manufacturing data also proved uninspiring as the ISM Index
declined during May to 53.5 from 54.8 in the prior month, missing the reading
of 54.0 that had been expected for the latest reading.
Generally on par with what had been projected, personal spending
and income increased in April by 0.3% and 0.2%, respectively, while core
personal consumption expenditures increased by 0.1%. Construction
spending increased during April by 0.3%, which is less than the 0.5% increase
that many had come to expect.
While the data likely increased the probability of further Fed
action, including another round of quantitative easing, it failed to prevent a
steep sell-off. The efforts of sellers resulted in the worst one-day percentage
drop for the S&P 500 since December, and left it to trade at a multi-month
low beneath its 200-day moving average. The broad market measure hasn’t closed
below that key technical line since the very end of 2011.
Gold garnered strong buying interest as traders turned defensive.
The yellow metal’s price pushed up from an early morning loss to a session high
of $1624 per ounce before it closed with a 3.6% gain at $1621.40 per ounce.
Prior to today’s surge, gold was mired near the multi-month lows that had
followed a few weeks of selling.
In contrast, oil prices extended their downtrend by dropping 3.9%
to close pit trade at $83.17 per barrel. Along the way they logged their lowest
level in more than seven months at $82.27 per barrel.
Oil’s slide played a part in Energy’s many poor performances this
week. The sector fell more than 2% on Friday, and roughly 4.5% for the week.
Defensive in nature, Telecom and Utilities had the best week in
that they were the only two major sectors that limited weekly losses to less
than 1%.
Treasuries, a favorite safe haven among investors, traded higher
once again. In fact, the yield on the benchmark 10-year Note dropped to a
record low near 1.44% amid aggressive selling in the early going. It gradually
eased up from that mark as trade progressed.
The dollar forfeited and early gain to end the session with a loss
of about 0.2% against a basket of major foreign currencies, namely the euro,
which rallied to a 0.5% gain against the greenback. The euro’s bounce came
after it briefly fell beneath $1.23 to set its lowest level in nearly two
years.
The CRB Index sank 1.7% for its fourth consecutive loss. For the
week it fell 4.8%, which stands as its fifth straight weekly decline.
Crude oil struggled in negative territory for its entire session as
a disappointing
Precious metals, however, rallied out of negative territory at pit
trade open in response to the weak
Although the Volatility Index eventually eased back, it pushed up
to a 2012 high narrowly above 26 amid the stock market’s initial flush. DJ30
-274.88 NASDAQ -79.86 NQ100 -2.6% R2K -3.1% SP400 -3.2% SP500 -32.29 NASDAQ
Adv/Vol/Dec 419/1.85 bln/2152 NYSE Adv/Vol/Dec 417/789 mln/2619