YAHOO [BRIEFING.COM]: The
major market averages recovered from some early selling pressure to trade with
gains of roughly 1% for most of the day, but the stock market's failure to
extend its gains in the face of resistance provided participants with an excuse
to exit their positions, causing stocks to roll over into the close.
Stocks opened in positive
territory as participants took their cues from renewed buying interest in
Europe, where news that Italy's debt was downgraded came without surprise given
speculation last week. An early slip by financials prompted some knee-jerk
selling, but stocks were able to stabilize quickly and mount an impressive
bounce that took the Dow more than 100 points higher and the S&P 500 to a
gain of more than 1%.
However, momentum stalled when
the S&P 500 approached the 1220 line. It traded between there and 1215 for
more than three hours before sentiment soured and participants, partly seeking
the path of least resistance, resorted to selling. The decision to sell also
precedes the latest FOMC policy statement, which will be released tomorrow
afternoon. The past couple of statements have featured verbiage regarding the
Fed's vigilance and readiness to use its policy tools if conditions should
permit, but nothing has been let on about new plans to help stimulate the
economy.
Also of primary concern is the
ability of European officials to contain Greece's financial troubles, so as to
help prevent contagion. However, participants never got any updates on the
progress of Greece's dealings with the Troika. CNBC did report before the close
that officials from the Troika will return to Athens in October, though.
The Dow managed to make it out
with an marginal gain, but the S&P 500 logged a loss. Of the three major
equity averages, the Nasdaq suffered the worst fate. Aggressive selling sent it
to a loss of nearly 1% after it had been up about 1% at its session high. Oracle
(ORCL 28.35, -0.67) proved to be a heavy drag ahead of its quarterly
report.
Small-cap and mid-cap stocks
were hit hard as participants moved to pare risk. That left the S&P 400 to
fall to a loss of more than 1%, while the Russell 2000 tumbled to a loss of
almost 2%.
Cyclical plays like materials
(-1.0%), industrials (-0.7%), energy (-0.6%), and consumer discretionary stocks
(-0.6%) finished the day with the worst results. In contrast,
defensive-oriented utilities were the top performers for the entire session.
They settled with a 1.4% gain after the group had been up in excess of 2% at
its session high. Midsession strength among utilities helped the Dow Jones
Utility Index climb to its highest level in nearly three years.
Following yesterday's move to
the downside, on a strong dollar, commodities like gold, silver and crude oil
posted gains today. Gold prices added 1.8% to finish at $1810 per ounce, while
silver futures gained 2.4% to finish at $40.12 per ounce. Neither metal
recouped all of yesterday's losses, but gold prices came pretty close. Weakness
in the dollar helped the precious metals higher.
Crude oil futures gained 1.5%
to settle at $86.92 per barrel. Also helping crude futures higher today was
some short covering ahead of Fed Chairman's testimony tomorrow. Natural gas
finished off 0.9% at $3.80 per MMBtu.
Advancing Sectors: Utilities (+1.4%), Health Care (+0.9%),
Telecom (+0.5%), Consumer Staples (+0.1%)
Declining Sectors: Materials (-1.0%), Industrials (-0.7%),
Energy (-0.6%), Consumer Discretionary (-0.6%), Tech (-0.4%), Financials
(-0.3%)DJ30 +7.65 NASDAQ -22.59 NQ100 -0.6% R2K -1.8% SP400 -1.3% SP500 -2.00
NASDAQ Adv/Vol/Dec 713/1.91 bln/1825 NYSE Adv/Vol/Dec 1099/926 mln/1910