YAHOO [BRIEFING.COM]: Stocks
staged gains in the first few sessions of September, but market participants
returned from Labor Day ready to sell. Their efforts were focused on financials
and other cyclical plays.
In the four sessions leading
up to Labor Day weekend the S&P 500 gained more than 5%. In the wake of
such a heady move came rekindled concerns about the health of European banks.
That invoked stiff selling among bank stocks. In turn, the KBW Bank Index fell
3.2%, which cut into the 8.5% gain that it had made over the four previous
sessions.
Weakness among large-cap
banking issues undermined the broader financial sector. As such, financials
fell to a collective loss of 2.4% and closed at session lows.
Profit taking also undercut
other cyclical plays, like consumer discretionary stocks and energy stocks.
Both of those sectors fell 1.6%.
In contrast,
defensive-oriented issues were the only ones to limit losses. Specifically,
consumer staples stocks and telecom stocks both slipped just 0.3%, while both
utilities and health care stocks ended 0.6% lower.
Still, such widespread
weakness stoked volatility. That sent the Volatility Index (VIX) up almost 12%
from the four-month low that it set late last week.
Amid the stock market's slide
and the increase in volatility Treasuries attracted strong support - the
benchmark 10-year Note climbed almost a full point and the 30-year Bond tacked
on two full points.
Results from an auction of
3-year Notes were largely lackluster. The auction drew a bid-to-cover of 3.2,
dollar demand of $105.9 billion and an indirect bidder participation rate of
42.4%. The four previous auctions held an average bid-to-cover of almost 3.3,
dollar demand of about $116.3 billion, and an average indirect bidder
participation rate of 44.6%.
The greenback made a big gain
by climbing 0.9% against a basket of competing currencies. Most of the move was
against the euro, which dropped 1.4% in its steepest single-session slide in
nearly four weeks.
Favor for safety also sparked
buying in the yen, which set a fractionally improved 15-year high of 83.5 yen
per dollar. Japan's central bank brought little surprise with its decision to
keep its benchmark lending rate at 0.1%.
News flow was light all
session, though former Hewlett-Packard (HPQ 39.92, -0.43) head
Mark Hurd is now co-President of Oracle (ORCL 24.27, -1.34).
CNBC later reported that Hewlett-Packard has filed a lawsuit against Hurd for
violating confidentiality agreements.
Soft commodities were the
largest advancing sector today, rallying for 1.7% -lead by a 4.1% move in March
sugar futures.
Oct crude oil settled lower by
0.7% to $74.09 per barrel. It traded well lower this morning on weakness on
concerns about the economy, but was able to recoup most of its losses to end
the session with only modest losses. Oct natural ended lower by 1.6% to $3.86
per MMBtu in what was an uneventful session.
Dec gold finished higher by
0.6% to $1259.30 per ounce. A flight to safety, spurred by concerns about the
economy, supported gold prices today. Dec silver shed 0.2% to end at $19.91 per
ounce. Silver did manage to trade above the $20 level, putting in highs at
$20.045 -its best levels since mid-March of 2008.
Advancing Sectors: (None)
Declining Sectors: Financials (-2.4%), Energy (-1.6%), Consumer
Discretionary (-1.6%), Tech (-0.9%), Industrials (-0.9%), Materials (-0.8%),
Health Care (-0.6%), Utilities (-0.6%), Telecom (-0.3%), Consumer Staples
(-0.3%)DJ30 -107.24 NASDAQ -24.86 NQ100 -0.7% R2K -2.2% SP400 -1.5% SP500
-12.67 NASDAQ Adv/Vol/Dec 590/1.69 bln/2060 NYSE Adv/Vol/Dec 799/829 mln/2203