YAHOO [BRIEFING.COM]: Aggressive selling resumed today, causing the Dow to drop 500
points, the Nasdaq Composite to plummet 5%, and the S&P 500 to sink 60
points to 1200 for its worst single-session performance in more than two years.
Ongoing concerns about the
global economy remained a driving force in today's sell-off, which was steady
and orderly. Losses were ushered in with heavy share volume, and left the
S&P 500 at its lowest level in nine months, or about 12% below its early
May high.
Even safe havens like gold and
silver failed to escape selling pressure as traders opted to sell their
profitable picks in order to meet margin calls on other holdings. Gold settled
lower by 0.5% at $1658.20 per ounce after it had rallied to a new all-time high
at $1684.90 per ounce. Silver sank 5.6% to $39.42 after it had hit a
three-month high of $42.30 per ounce.
The scope of this session's
slide has many wondering what the market has in store tomorrow, when the
official nonfarm payrolls report will be released. Today, though, participants
were dealt a weekly initial jobless claims tally of 400,000, which isn't much
better than the 405,000 initial claims that had been broadly expected among
economists polled by Briefing.com.
Renewed macro tension in
Europe prompted the European Central Bank President Trichet to provide markets
with additional liquidity with an extension of maturities related to financing
operations. In a similar vein, Japan expanded its asset purchase plan, but also
intervened in the yen, which tumbled more than 3% against the greenback before
it could pare some of that loss. Weakness in the yen and euro helped drive the
Dollar Index 1.8% higher.
Every single sector in the
S&P 500 fell more than 3% today. Materials and energy stocks suffered the
worst of it all. The two sectors sank 6.6% and 6.8%, respectively.
Retailers weren't far behind,
based on the SPDR S&P Retail ETF (XRT 48.55, -3.38), which
fell 6.5%. The group's weakness came not only because of broad market weakness,
but also from a generally uninspiring batch of monthly same-store sales
results. Although it didn't offer any monthly metric, teen apparel and
accessories retailer Aeropostale (ARO 12.53, -3.99) saw almost
one quarter of its market cap melt away after the company cut its guidance.
Dow component Kraft (KFT
33.78, -0.52) had gapped up by about 6% to a multi-year high at the open,
thanks to news that the company will spin off its North American grocery
business, but the blue chip was ultimately imbued by broad market weakness.
Concerns about global
economies continued to wreak havoc on commodities today. In turn, the CRB
Commodity Index dropped 2.8% to a near seven-month low.
Oil suffered one of the
steepest drops. Specifically, crude oil prices settled at 86.63 per barrel for
a 5.8% loss. That marked its greatest single-day drop since May 5 -when it fell
more than 8% - on the back of concerns about global economic health. Futures
prices had recorded intraday lows of $86.04, which marks the commodity's worst
level since February 18.
Natural gas prices closed
lower by 3.4% at $3.95 per MMBtu. Futures prices had actually traded higher in
early pit trade, but bearish inventory data spurred a reversal that took the
commodity as low as $3.92 per MMBtu, which made for its worst level since
mid-March.
However, safe havens like gold
and silver benefited from weakness in the broader commodity complex and a
plunging stock market. In morning trade, December gold, which eventually
settled lower by 0.5% to $1658.20 per ounce, rallied to a new all-time high at
$1684.90 per ounce. September silver, which lost 5.6% to close at $39.42,
traded back above $42 to a three-month high of $42.30 per ounce. The late
morning plunge suffered by the pair of precious metals took gold as low as
$1642.20 per ounce and silver down to $38.47 per ounce. Many traders attributed
the sell-off to liquidation that followed margin calls in other asset classes.
Advancing Sectors: (None)
Declining Sectors: Energy -6.8%, Materials -6.6%, Financials
-5.2%, Industrials -5.4%, Consumer Discretionary -4.8%, Tech -4.5%, Health Care
-3.8%, Telecom -3.3%, Utilities -3.2%, Consumer Staples -3.1%DJ30 -512.76
NASDAQ -136.68 NQ100 -4.6% R2K -6.0% SP400 -5.9% SP500 -60.27 NASDAQ
Adv/Vol/Dec 203/3.27 bln/2442 NYSE Adv/Vol/Dec 140/1.82 bln/2968