YAHOO [BRIEFING.COM]: Choppy,
lackluster trade gave way to a broad-based selloff that left stocks to settle
at session lows on Tuesday. The slide also sent the stock market back below its
200-day moving average.
Stocks had attempted to put
together a relatively solid start. Early participants seemed to shrug off news
that analysts at Standard & Poor's raised their estimates on loan losses
for Spain's banking sector, though that news, along with a credit rating
downgrade of BNP Paribas, weighed on foreign banks in overseas trade. Positive
attention was paid to an upturn in the euro and British pound, which was helped
by revised plans to accelerate debt reduction in the United Kingdom. The pound
was quoted with a 0.3% gain against the greenback at the close, but the euro
never made its way out of the red and finished 0.3% lower against the dollar.
The early attempt at an
advance was undercut by disappointment related to the latest existing home
sales figures. Existing home sales for May decreased 2.2% month-over-month to
an annualized rate of 5.66 million units, which is less than the expected rate
of 6.12 million units per year. Both homebuilders and home improvement
retailers were dropped for a 2.9% loss as investors considered the implications
of a slower recovery in housing.
Trade had been largely
uninspired for most of the session, but weakness became widespread in the final
hour. More than 95% of the names in the S&P 500 settled in the red as a
result. What's more, the drop left the S&P 500 to close below its 200-day
moving average.
Energy stocks were hit with
some of the worst selling. In turn, the sector dropped 2.7% in its sharpest
slide of the past two weeks. Drillers were given temporary relief from the
selling effort as word circulated that a judge ruled against the deepwater
drilling moratorium. To the point that the ruling could be challenged, CNBC
reported that the White House will appeal the judge's decision. Drillers
dropped 3.6%.
Even tech stocks, which had
been up more than 1% in the early going, were dropped for a 0.9% loss.
Large-cap tech had even helped drive the Nasdaq up to a gain of more than 1%,
but the tech-rich index succumbed to the same late barrage of selling that sank
the broader market.
Treasuries attracted support
amid the stock market's selloff. Solid results from an auction of 2-year
Treasuries helped. Dollar demand at the auction hit $138.0 billion, which is
the second highest of the eight most recent auctions and the bid-to-cover came
in at 3.5, which was above the 2.9 ratio seen in the previous auction.
Trading volume barely broke 1
billion shares on the NYSE. That's well below the average of more than 1.4
billion shares that the NYSE has seen during the past 50 sessions, but it is
in-line with the Big Board's share volume for the past 10 sessions. The drop in
share volume comes as many trading desks become more thinly staffed as summer
vacation season gets into full swing.
Trading volume certainly
wasn't helped by the lack of corporate news items this session. Walgreen
(WAG 28.17, -1.97) was one of only a few names to issue a quarterly
report this morning. The drug and convenience retailer brought in an adjusted
$0.53 per share, but that missed Wall Street's consensus earnings estimate.
Investors responded by dumping the stock for its worst single-session slide
this year.
The CRB Commodity Index
finished with a 0.4% loss today, led by the 1.3% sell off in the energy sector.
July natural gas futures shed
2.3% to finish at $4.76 per MMBtu, marking a third consecutive down-day. Profit
taking from its recent run up above the $5 level has been responsible for the
recent losing streak. August crude oil finished down 1% to $77.90 per barrel.
It was a rather uneventful
session for precious metals. August gold closed more-or-less flat on the
session at $1240.80 per ounce. July silver finished higher by 0.4% to $18.90
per ounce.
Corporate news flow is
expected to remain sluggish in the near term, but a steady flow of data remains
on tap. Tomorrow, the latest in new home sales is due in the morning, followed
by the Federal Open Market Committee's latest policy statement in the
afternoon.
Advancing Sectors: (None)
Declining Sectors: Energy (-2.7%), Utilities (-2.5%),
Industrials (-2.4%), Materials (-2.2%), Consumer Discretionary (-2.2%),
Financials (-1.5%), Consumer Staples (-1.0%), Tech (-0.9%), Health Care
(-0.9%), Telecom (-0.6%) DJ30 -148.89 NASDAQ -27.29 NQ100 -0.8% R2K -2.1% SP400
-2.2% SP500 -17.89 NASDAQ Adv/Vol/Dec 579/1.90 bln/2076 NYSE Adv/Vol/Dec
617/1.12 bln/2446