YAHOO [BRIEFING.COM]: A weak
performance on Friday resulted in another weekly loss for stocks -- their
eighth in 10 weeks of trade. Such an extensive stretch of weakness has left the
stock market to log a monthly loss of 7% and a quarterly loss of more than 14%.
Trade on Friday was spent
entirely in negative territory. Participants turned to selling after watching
markets overseas slide. Trade in Europe, which has influenced sentiment at home
for weeks, saw Britian's FTSE fall 1.3%, France's CAC close 1.5% lower, and
Germany's DAX drop 2.4% after a 3.0% jump in Eurozone CPI dampened hope for a
rate cut by the European Central Bank. Overnight action in Asia saw Hong Kong's
Hang Seng slide 2.7%, China's Shanghai Composite slip 0.3%, and Japan's Nikkei
finish flat. China's HSBC Manufacturing PMI for September stayed below 50, the
dividing line between contraction and expansion, for the third straight month,
making some question the country's ability to sustain growth in the face of
sluggish global conditions.
The inclination to sell
trumped a couple of better-than-expected domestic reports. The Chicago PMI for
August bested the Briefing.com consensus call of 54.0 by improving to 60.4 from
56.5 in July. The final September reading on consumer sentiment from the
University of Michigan was revised upward to 59.4 from the preliminary reading
of 57.8. A reading of 57.5 had been expected.
Personal income and spending
numbers for August were less impressive. Income declined by 0.1% while spending
increased by 0.2%. Income failed to meet the 0.1% increase expected, on
average, by economists polled by Briefing.com, but the increase in spending was
exactly in line with what had been expected.
Without any kind of positive
leadership, stocks were left to wrestle with sellers throughout the session.
Even defensive-oriented stocks succumbed to aggressive selling pressure after
they had limited losses in the first half of the day. As a result, all 10 major
sectors tumbled to losses in excess of 1%.
Financials and materials
stocks fell the hardest. They dropped 3.5% and 3.7%, respectively. They were
also some of the poorest performers for all of September and all of the third
quarter. During September, financials fell 11.5% while materials tumbled 16.6%.
Over the course of the quarter, though, financials shed 23% and materials
surrendered a full quarter, 25%, of their market cap.
With selling intensifying into
the close, stocks effectively surrendered the gains that they had staged in
previous sessions. That caused stocks to record a weekly loss of 0.4%. It all
made for an appropriate conclusion to the third quarter, which goes down as the
stock market's poorest quarter since a near 23% drop in the fourth quarter of
2008.
Although the action on Friday
appeared appropriate in the context of the quarter, it contrasted with trade at
the start of the week, when stocks climbed more than 2% on Monday and another
1% on Tuesday. Buying in both days was based largely on hope that officials in
Europe are finally crafting a comprehensive plan that will help the region
shore up its finances.
Momentum from those two
sessions helped stocks open higher on Wednesday, but participants, starved for
details of the rumored plan, began to push back against stocks and ultimately
dropped the market for a 2% loss. Data that day didn't do anything to bolster
the case buying either -- durable goods orders and orders less transportation
both slipped 0.1% during August.
Pit trade concluded with oil
prices down 3.6% to $79.20 per barrel. The energy component's weak close added
to its quarterly loss, which totaled 17.0%. As for natural gas, its price
tumbled 2.1% to $3.67 per MMBtu, which is 16.0% below where it began the third
quarter.
Precious metals put on a mixed
performance today, and the quarter for that matter. Specifically, gold prices
eked out a 0.3% gain to close the week at $1622.30 per ounce. The yellow metal
was a bright spot in the quarter, during which it advanced 7.9%. Meanwhile,
silver prices slid 1.4% to $30.08 per ounce in today's pit trade, but booked a
13.5% loss for the quarter.
The CRB Commodity Index, a
collective measure of commodities, closed today's trade with a 2.6% loss at a new
2011 low. The CRB logged a 12% loss for the third quarter.
But by Thursday, approval from
highly influential Germany to expand the European Financial Stability Facility
helped stocks snap back. Upbeat data also played a pivotal part. The latest
weekly initial jobless claims count dropped by 37,000 from the prior week to
391,000, which is the first time in more than a month that initial claims fell
below 400,000. Moreover, the final reading for second quarter GDP showed growth
of 1.3%, which not only marked an increase from the 1.0% rate posted in the
prior reading, but it also bested the 1.2% growth rate that had been broadly
expected. DJ30 -240.60 NASDAQ -65.36 NQ100 -2.7% R2K -2.8% SP400 -2.9% SP500
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