YAHOO [BRIEFING.COM]: A loss of confidence in the economic
recovery led to a deep, broad-based selloff that sent stocks reeling. Though
the broader market suffered its worst loss of the past few weeks, it was able
to secure support just above a key technical line.
Market
participants turned pessimistic after China reported some weaker-than-expected
retail sales figures and a slight dip in industrial production during July.
Japan's lackluster machinery orders report and moderate economic outlook didn't
help.
The Bank of
England also failed to counter waning confidence in a steady global recovery
with its statement that risks to growth are still to the downside.
Those
announcements come after the Fed stated again yesterday that the economic
recovery is likely to be more modest in the near term.
Coupling the
underwhelming announcements with the stock market's inability to build on the
gains of recent weeks, investors took the opportunity to rotate out of stocks.
The selling effort was largely indiscriminate as 495 of the 500 members of the
S&P 500 fell to a loss - Macy's (M 20.52, +1.14) was one of the few to
stage a gain after it reported better-than-expected quarterly earnings and
raised its outlook.
Such widespread
weakness caused the S&P 500 to slice through its 200-day simple average,
but it held steady just above its 50-day average of 1088.
Treasuries
ticked higher as participants sought safety. In turn, the benchmark 10-year
Note dropped to a 14-month low and ended the day around 2.68%.
Treasuries
showed a muted response to results from a $24 billion auction of 10-year Notes.
Dollar demand for the auction was a solid $73 billion, up from the prior
auction and above recent averages, but the bid-to-cover came in at 3.0, which
is below the prior auction and recent averages. The yield on the auction came
in at 2.73%.
Oil prices plummeted 2.8% to close pit trade just above $78
per barrel, and also just above the commodity's 200-day simple moving average
as concerns about economic growth came into play.
Natural gas
showed strength, though. The commodity was able to advance 0.7% to $4.33 per
MMBtu.
Precious metals
prices diverged as gold prices climbed as high as $1208 per ounce before
pulling back to $1199.70 per ounce, where they settled with a fractional gain,
and silver prices sank 1.3% to $17.82 per ounce.
The dollar also
found favor among investors. After the close the Dollar Index continued to
sport a 1.9% gain, its best performance of the past year. Most of that move
came against the euro, which plummeted 2.4%. In contrast, the yen set a fresh
15-year high versus the dollar early this morning, but it eased back above the
widely watched level of 85 yen per dollar in afternoon trade. DJ30 -265.42
NASDAQ -68.54 NQ100 -2.8% R2K -4.0% SP400 -3.4% SP500 -31.59 NASDAQ Adv/Vol/Dec
283/2.26 bln/2348 NYSE Adv/Vol/Dec 442/1.16 bln/2622