YAHOO [BRIEFING.COM]: The
stock market settled with a solid gain after it had been down in excess of 1%
amid heightened concerns about fiscal and financial conditions in Europe.
Speculation that a few of
France's primary financial institutions -- Societe Generale, BNP Paribas, and
Credit Agricole -- might be hit with a debt downgrade called into question the
health of the country's financial system. Of course, such consideration comes
in addition to the already precarious conditions in the eurozone periphery.
Amid fears of contagion,
Europe's bourses were cut down and domestic markets opened with marked losses.
A bout of buying interest took the major US averages upward in the early going,
but the effort lost momentum when the Dow and S&P 500 attempted to turn
positive. The Nasdaq was able to find higher ground with help from internet
retailers and semiconductor stocks, which were bolstered by news that Broadcom
(BRCM 33.07, -0.37) will acquire NetLogic (NETL
48.12, +16.21) for $50 per share, or a premium of more than 55% over its
closing price last week.
A lack of positive leadership
left stocks to drift lower in afternoon trade. Yet the rumor that a sovereign
wealth fund from China was talking with Italy about a bond purchase prompted a
broad-based bounce. Sellers attempted to reapply pressure in the final hour,
but stocks were able to overcome the resistance. That squeezed out some
sellers, giving the market's late rise added momentum.
Financials made one of the
stronger moves. The sector settled with a 1.2% gain as bank stocks bounded to
give the KBW Bank Index a 1.7% gain.
Materials made up the only
major sector that failed to put together a gain. The sector's 0.8% loss was
underpinned by weakness among metals and miners issues, which left the SPDR
S&P Metals and Mining ETF (XME 54.99, -0.67) to log a loss in
excess of 1%.
The late barrage of buying
interest helped pull the Volatility Index back below 40 after it had been up
more than 10% to trade above 43 at midday.
The dollar had a rather
volatile day, though. It set a six-month high against a basket of competing
currencies overnight, but drifted lower to start the trading day with a slight
loss. The greenback eventually battled back, but ended the session near the
flat line.
Treasuries had a rather quiet
session until they ticked lower as stocks staged their late-session surge.
Treasuries showed little response to the latest auction of 3-year Notes.
Wide spread weakness in other
asset classes caused for some liquidation in the precious metals today. Despite
continued concerns about a possible Greek default, as well as more rumors that
Moody's is preparing to downgrade the three largest French banks, gold and
silver prices traded steadily lower throughout the session. Gold prices shed
2.5% to settle at $1813 per ounce, while silver prices dropped 3.4% to end at
$40.22 per ounce. Both metals have extended their respective sell-off in
afterhours trade, with gold trading to fresh lows at $1804 and silver at
$39.75.
Crude oil finished up 1.1% at $88.19 per barrel. Futures rallied in the face of
concerns about the state of global indices and the resulting weakness in equity
markets. After trading to highs at $88.95 in mid-morning trade, crude oil
pulled back toward the $88 level where it closed. Natural gas finished lower by
0.7% at $3.89 per MMBtu.
Advancing Sectors: Tech +1.3%, Financials +1.2%, Consumer
Discretionary +1.2%, Utilities +0.9%, Telecom +0.7%, Energy +0.5%, Health Care
+0.4%, Industrials +0.1%, Consumer Staples +0.1%
Declining Sectors: Materials -0.8%DJ30 +68.99 NASDAQ +27.10
NQ100 +1.3% R2K +0.9% SP400 +0.6% SP500 +8.04 NASDAQ Adv/Vol/Dec 1418/1.98
bln/1162 NYSE Adv/Vol/Dec 1440/1.09 bln/1576