YAHOO [BRIEFING.COM]: Trade on
Tuesday was quite volatile. The S&P 500 quickly tumbled in excess of 2%,
but retraced the downturn into midday. The struggle to extend the move into
anything more than an incremental gain invited renewed selling in the
afternoon, but a late rally helped the market close with a gain of more than
2%.
Ongoing concerns about
financial conditions in Europe and Greece's ability to pay its debts, let alone
meet deficit reduction targets, prompted overseas markets to suffer steep
losses in schizophrenic-like trade. The negative sentiment permeated premarket
trade and prompted domestic participants to push stocks sharply lower in the
first few minutes.
Few stocks were sparred from
the sell-off as the S&P 500 dropped to the 1075 line for the first time in
about 13 months. At that point, the stock market was more than 20% below its
early May high, bringing about the undesirable distinction of bear market
territory.
Tech stocks provided support
in the face of the broad market's dive. The sector rallied to a gain of more
than 1% with help from semiconductor-related plays. Tech's strength took the
Nasdaq up to a nice midsession gain and helped the S&P 500 reverse its
loss, but the broad market measure was unable to move up from the neutral line
while the Dow remained mired in the red.
Tech's strength was challenged
in the afternoon, though. Loss of leadership from the sector, which is the
largest by market weight, invited sellers to redouble their efforts and drive
stocks back into negative territory.
Reports that officials in the
European Union are considering plans to recapitalize banks coincided with a
barrage of buying in the final hour. The move by the S&P 500 from its
afternoon low to its close spanned 4%. At the same time, the Dow bounded by
more than 350 points with barely a pause along the way. The Nasdaq settled with
a 3% gain, the strongest of the trio.
Although the Nasdaq outpaced
its counterparts, primary component Apple (AAPL 372.50, -2.01)
was unable to find positive territory. The stock's loss came amid a rather
negative response to the unveiling of the company's latest iPhone.
Comments from Fed Chairman
Bernanke to the Joint Economic Committee were consistent with recent policy
statements in that the Fed remains prepared to provide additional support as
necessary. The absence of surprises essentially made the speech a non-event for
the market.
The market's reversal into the
close caused the dollar to take a late dive. It ended the day about 0.7% behind
a basket of major foreign currencies after it had worked its way out of the red
during afternoon trade. The downturn was largely owed to newfound support for
the euro, which settled with a 1.4% gain at $1.337.
Treasuries also sold off.
Their downturn wasn't terribly steep, but it was still enough to take the yield
on the benchmark 10-year Note back above 1.80%.
A dour mood during pit trade
kept pressure on oil prices, which closed the day with a 2.5% loss at $75.67
per barrel. That marked their lowest close in more than a year, but futures
prices climbed in conjunction with the equity market after pit trade had closed.
As for gold, the precious metal slumped during pit trade to $1616 per ounce for
a 2.2% loss, unable to attract even safety seekers.
The safe haven appeal of
precious metals faded, for the time being, following commentary from Fed
Chairman Bernanke which indicated the Fed might once again interject to help
the flailing economy. Both gold and silver sold off throughout the session to finish
near session lows. Gold prices ended off 2.5% at $1616 per ounce, while silver
pries dropped 3.2% to finish at $29.84 per ounce.
Weakness in the dollar, on the heels of the Fed Chairman's commentary, helped
crude oil futures recoup overnight losses. They were, however, unable to
maintain those gains and quickly pulled back into negative territory and
accelerated to the downside heading into the close of pit trade. On the
session, crude oil shed 2.5% to end at $75.67 per barrel, its lowest close since
late Sept of 2010. Natural gas ended higher by 0.5% at $3.63 per MMBtu.
Advancing Sectors: Financials +4.1%, Materials +3.7%,
Energy +3.2%, Consumer Discretionary +3.1%, Industrials +2.6%, Tech +2.1%,
Health Care +1.0%, Consumer Staples +0.7%, Telecom +0.6%
Declining Sectors: Utilities -0.5%DJ30 +153.41 NASDAQ +68.99
NQ100 +2.1% R2K +6.4% SP400 +4.1% SP500 +24.72 NASDAQ Adv/Vol/Dec 1903/3.04
bln/691 NYSE Adv/Vol/Dec 1866/1.66 bln/1233