YAHOO [BRIEFING.COM]: Stocks
rolled over in the final hour of trade to logg sizable losses. The move lower
coincided with a retreat by the euro.
The major equity averages
opened trade today with marked losses, but stocks gradually worked their way up
to the neutral line. The lack of leadership left stocks to lose momentum and
drift back into negative territory.
Selling accelerated in the
final hour, right around the time that the euro began its pullback from
positive territory. The euro, generally a barometer of confidence in the
eurozone, had been down against the greenback in morning trade, but eventually
mustered a modest gain. That move proved unsustainable, though, as it forfeited
its gain to trade with a 0.3% loss against the dollar by session's end.
Although it wasn't a
revelation, analysts at Fitch reminded market participants about the risk of
contagion by suggesting that domestic banks could be hurt if the fiscal and
financial problems of Europe worsen. For now, though, the analysts have a
stable outlook on the U.S. banking industry. In contrast, analysts at Moody's
downgraded credit ratings on 10 banks in Germany, which is Europe's strongest,
most diversified economy.
Financials had been relatively
weak all session and, perhaps appropriately, suffered some of the steepest
losses. The sector's 2.5% drop was driven by shares of large-cap diversified
financial services players like Bank of America (BAC 5.90,
-0.23), which set a new monthly low.
Even energy stocks were imbued
by broad market weakness, despite a rally by oil prices to a multi-month high
above $100 per barrel. The energy component closed pit trade more than 3%
higher at almost $102.60 per barrel, but energy stocks, as a group, logged a
1.5% loss.
Tech stocks tried to offer
support on a few occassions, but efforts were repeatedly checked by sellers,
culminating in a 1.5% loss for the largest sector by market weight. Dell
(DELL 15.25, -0.38) was a steady drag after its tepid guidance cast a pall over
an upside earnings surprise.
For the second straight
session data did little for traders. The economic calendar featured an October
Consumer Price Index that slipped by 0.1%, which is not too different than the
consensus call for no change. Core prices made a 0.1% increase, just as had
been generally expected. Separately, industrial production increased in October
by 0.7%. That exceeded the 0.4% increase that had been broadly expected.
Trade in crude oil was focused
around news that Enbridge and Enterprise plan to change the direction of crude
oil flows on the Seaway pipeline, pending regulatory approval, to enable it to
transport oil from Cushing, Oklahoma to the U.S. Gulf Coast. While the reversal
may not happen until the back half of 2012, the Dec contract rallied sharply
today. Futures, which closed the WTI-Brent spread, put in highs at $102.46,
their best levels since June 10. This morning’s inventory data was more-or-less
a non-event as futures saw a very modest pullback before resuming their rally.
Crude posted gains of 3.2% to close at $102.59 per barrel. Natural gas futures
extended their recent sell-off after shedding 1.7% to close at $3.34 per MMBtu.
Futures put in fresh +1 year lows at $3.33 and closed just above those lows.
Precious metals quietly
bounced off of their respective lows, at $1753.90 and $33.57, in mid-morning
trade. Gold, which posted losses of 0.4% at $1774.30, closed at levels seen in
overnight trade. Silver, which settled lower by 1.8% to close at $33.82, gave
back most of its bounce heading into afternoon trade.
Advancing Sectors: (None)
Declining Sectors: Consumer Staples -0.8%, Utilities -1.3%,
Tech -1.5%, Energy -1.5%, Industrials -1.5%, Telecom -1.6%, Health Care -1.8%,
Consumer Discretionary -1.9%, Materials -2.4%, Financials -2.5%DJ30 -190.57
NASDAQ -46.59 NQ100 -1.8% R2K -1.8% SP400 -1.4% SP500 -20.90 NASDAQ Adv/Vol/Dec
682/1.95 bln/1880 NYSE Adv/Vol/Dec 720/918 mln/2309