YAHOO [BRIEFING.COM]: Pessimism
continues to prevail. In turn, the major equity averages settled with various
losses in the latest round of trade.
This session's slide marks an
extension of the selling interest that has governed broad market trade in
recent weeks. Economic growth remains the primary point of concern among market
participants.
The lack of encouraging
comments from Fed Chairman Bernanke was widely blamed for the prior session's
late slide. Selling interest carried over amid word that the World Bank cut its
forecast for 2011 economic growth to 3.2% from 3.8%. On that very topic,
Germany and France, the two largest economies in Europe, both reported sharp
declines in their respective total trade balances for April. Meanwhile, the
Fed's latest Beige Book indicated that economic activity generally continued to
expand since the last report, but a few Districts experienced some
deceleration.
Warnings from analysts at
Moody's that the United Kingdom's AAA credit rating could take a hit added to
the dreariness of the day's headlines, but helped the greenback garner support
from currency traders. The Dollar Index was up about 0.5% at the end of the
trading day. It is still down more than 6% this year, though.
Despite the dollar's strength,
oil prices spiked from a morning loss to a gain of more than 2%. The energy
component closed pit trade with a 1.7% gain at $100.74 per barrel. Oil's climb
came in response to OPEC's decision to leave production targets unchanged. A
surprisingly large draw in weekly oil inventories helped support oil's move
higher.
Higher oil prices helped
energy stocks trade with strength this session, although its gains waned into
the close. As a group, energy stocks were up more than 1% at their session
high, but they settled with a 0.4% gain.
Financials and tech stocks
came to be the heaviest drags on broad market trade. Financials fell 0.9% while
tech turned in a 0.8% loss. Widespread weakness among tech issues undercut the
Nasdaq Composite, which trailed its counterparts for just about the entire
session. Ciena (CIEN 20.29, -3.92) was one of the poorest
performing issues among tech-related plays; its precipitous drop to a
multi-month low came in response to an earnings miss and downside guidance.
Weakness in the tech space has also led the Nasdaq Composite to underperform
its counterparts today.
With stocks stuck in a funk,
Treasuries continued their ascent. Buying in the space drove down the yield on
the benchmark 10-year Note to a new 2011 low near 2.95%. Today's auction of
10-year Notes drew a bid-to-cover of 3.23, dollar demand of $67.8 billion, and
an indirect bidder participation rate of 50.6%.
July crude oil settled higher
by 1.7% to $100.74 per barrel. Today's gains were driven by news that OPEC had
disbanded its meeting with no adjustment being made to their output production
level. Heading into the meeting this week, there was heavy speculation that the
cartel would raise that level, the only question was how much. Inventory data,
also released today, helped crude push to its best levels at $101.89. July
natural gas finished up 0.3% to $4.85 per MMBtu.
It was a somewhat uneventful
session for precious metals, which spent most of the day chopping around the
flat line. Both metals pushed higher in morning trade in the wake of crude
oil's surge, but eventually moved back toward the flat line. August gold
finished lower by 0.3% to $1539.40 per ounce, while July silver ended down 0.9%
to $36.72 per ounce.
Advancing Sectors: Energy (+0.4%), Telecom (+0.2%),
Utilities (+0.1%), Health Care (+0.1%)
Unchanged: Consumer Staples
Declining Sectors: Materials (-1.0%), Financials (-0.9%), Tech
(-0.8%), Consumer Discretionary (-0.8%), Industrials (-0.8%)DJ30 -21.87 NASDAQ
-26.18 NQ100 -0.7% R2K -1.2% SP400 -1.0% SP500 -5.38 NASDAQ Adv/Vol/Dec
679/2.09 bln/1920 NYSE Adv/Vol/Dec 784/1.01 bln/2217