YAHOO [BRIEFING.COM]: Mostly
muddled trade ended in a modest loss for the S&P 500 as the worst new home
sales figures on record acted as a drag on trade and the FOMC failed to deliver
any positive news to market participants.
Stocks set their session lows
in the early going as it was reported that new home sales for May fell almost
33% month-over-month to an annualized rate of 300,000 units. Not only was that
far below the rate of 430,000 units that had been expected by economists polled
by Briefing.com, but it was the lowest rate since records began more than 45
years ago.
Though the stock market was
able to trim its losses, it didn't make its way into higher ground until the
afternoon release of the latest policy statement from the Federal Open Market
Committee (FOMC). The FOMC maintained the target range for the federal funds
rate at 0.00% to 0.25%, as expected. It also stated that exceptionally low
levels of the federal funds rate are expected for an extended period.
Once again, Thomas Hoenig
voted against the decision to keep the interest rate target unchanged. He also
argued against the language about keeping exceptionally low interest rates.
Though the FOMC included in
its statement the observation that economic recovery is proceeding, it also
stated that financial conditions have become less supportive of economic growth
on balance.
The stock market's upward push
during the minutes that followed the FOMC statement proved short lived, mostly
because it lacked any sort of real leadership. In turn, stocks spent the rest
of the session stuck in choppy trade with moderate losses.
Energy stocks represented some
of the session's weakest performers. The sector shed 1.0%. A 1.6% drop in crude
oil prices to $76.57 per barrel didn't help the sector -- an unexpected build
in weekly oil inventories helped keep oil prices in the red for the entire
session.
Telecom was a solid performer,
though. The sector settled with a 0.6% gain.
Treasuries had a strong
session. As such, the yield on the benchmark 10-year Note fell below 3.10% for
its first time in almost one month before it ticked higher in afternoon trade.
Treasuries encountered some selling after results from an auction of 5-year
Notes showed that dollar demand fell below $100 billion for the first time in
nine months and the auction's bid-to-cover came in below 2.6, which is less
than the average ratio for the past eight sessions.
The euro had a quiet start to
the session, but it managed to make its way to a 0.3% gain against the
greenback. The British pound was an even better performer as it spiked 0.9%
versus the dollar. The pound was helped by positive comments about the U.K.
budget plan from various credit analysts and a tacit vote of confidence in the
U.K. economy by a member of the recent Bank of England who wanted an increase
in the bank's interest rate.
Commodities sold off this session
led by weakness in energy (excluding-natural gas) and industrial commodities.
Natural gas was the lone
energy play higher. It closed 0.8% higher at $7.80 per MMbtu.
Crude oil, gasoline and
heating oil all traded in excess of 2% lower this session. August crude oil
finished 1.6% lower at $76.57 per barrel.
Silver, copper and nickel also
sold off. August silver closed 2.4% lower at $18.45 per ounce. Gold futures
fared slightly better; the August contract closed 0.5% lower at $1234.60 per
ounce.
Advancing Sectors: Telecom (+0.6%), Consumer Staples
(+0.3%), Materials (+0.1%)
Declining Sectors: Utilities (-1.1%), Energy (-1.0%), Tech
(-0.5%), Industrials (-0.4%), Financials (-0.3%), Health Care (-0.3%)
Unchanged: Consumer Discretionary DJ30 +4.92 NASDAQ -7.57
NQ100 -0.3% R2K -0.3% SP400 -0.2% SP500 -3.27 NASDAQ Adv/Vol/Dec 1187/1.88
bln/1412 NYSE Adv/Vol/Dec 1422/1.13 bln/1601