YAHOO [BRIEFING.COM]: The
major market averages had hugged the neutral line for most of the session, but
after Fed Chairman Bernanke completed a press conference that featured reduced
GDP forecast stocks rolled over to log sizable losses.
Stocks were locked into a
sideways drift for most of this morning and early afternoon. Participants were
generally uninspired by the latest update from Greece -- that the country's
prime minister was able to keep his position after a no-confidence vote was
held last evening. No updates on the implementation of new austerity measures
have been made available, however.
Range bound trade was also the
result of uncertainty ahead of the latest FOMC Policy Statement, which
indicated that members unanimously voted to keep the fed funds target between
0.00% to 0.25% and that exceptionally low levels are expected for an extended
period of time. It was also stated that the Fed still plans to complete its
purchase of $600 billion of longer-term Treasuries by the end of this month.
Trade remained reserved in the
wake of the statement. Action was also subdued during Fed Chairman Bernanke's
press conference, during which he announced that the Fed now believes 2011 GDP
will range from 2.7% to 2.9%, down from the range of 3.1% to 3.3% that was
announced in April. Additionally, unemployment for 2011 is now expected to
range from 8.6% to 8.9%, up from the range of 8.4% to 8.7%. Core PCE inflation
for 2011 is now expected to range from 1.5% to 1.8%, up from the range of 1.3%
of 1.6% that had been forecasted before.
Stocks didn't react
immediately to the Fed's revisions. Rather, participants waited until the final
hour of the session to start applying pressure. The ensuing selling effort was
steady and left stocks to settle at session lows.
Tech stocks and consumer
discretionary stocks collectively made up the day's worst performers. Both
sectors fell 0.8%. Financials didn't fare much better; they fell 0.7%. Not even
energy stocks or basic materials plays were able to hold their gains. Instead,
both sectors fell 0.4%.
FedEx (FDX 91.44, +2.31) eased off of its
session high, but still settled with a heady gain. The stock's strength was
underpinned by a better-than-expected earnings report. CarMax (KMX
32.66, +2.14) and Jabil Circuit (JBL 19.45, +0.60) also
outperformed after their earnings reports proved pleasing. Adobe
Systems (ADBE 30.01, -2.00) had an upside surprise of its own, but
that was overshadowed by the company's commentary about weak demand in emerging
markets.
Most of the more closely
tracked commodities traded with strength this session, although natural gas
prices surrendered an early gain to close pit trade with a 1.6% loss at $4.302
per MMBtu. Crude oil prices bounced to $95.41 per barrel for a 1.3% gain with
help from a bullish inventory report.
As for precious metals, gold
prices gained 0.5% to close at $1553.50 per ounce, but silver turned a
fractional loss in the early going into an even more impressive 0.9% gain to
close at $36.70 per ounce. The price of both precious metals has pulled back
following the close of pit trade, however.
Advancing Sectors: (None)
Declining Sectors: Consumer Discretionary (-0.8%), Tech
(-0.8%), Financials (-0.7%), Consumer Staples (-0.7%), Utilities (-0.7%),
Health Care (-0.6%), Industrials (-0.6%), Telecom (-0.5%), Energy (-0.4%),
Materials (-0.4%)DJ30 -80.34 NASDAQ -18.07 NQ100 -0.7% R2K -0.8% SP400 -0.5%
SP500 -8.38 NASDAQ Adv/Vol/Dec 847/1.62 bln/1672 NYSE Adv/Vol/Dec 1240/856
mln/1759