YAHOO [BRIEFING.COM]: Aggressive
selling dropped the Dow more than 300 points before it began to fight back in
afternoon action. Efforts to sell were largely debt driven.
Many market participants were
put into a negative mindset with the technical breakdown last week. Their move
to dump stocks came as Europe's bourses rolled over to resume their descent.
Europe continues to wrestle with precarious financial conditions in both its
periphery and its core -- Moody's even issued cautious comments about the
outlook on France's debt rating. Traders were also agitated over the lack of
progress made by U.S. officials in a recent attempt to arrange plans for
shoring up fiscal conditions. The major equity averages were all down well in
excess of 2% before stocks got any relief.
The market squeezed higher an
afternoon trade right around the time that headlines indicated officials are
moving forward on a plan to handle the U.S. deficit. Around the same time,
Atlanta Fed President Lockhart was quoted for saying that he does not see risk
of an outright recession, and that the risk of a recession stands at about 30%.
Market participants may get more insight into the thinking of Fed members with
the release of minutes from the most recent FOMC meeting tomorrow afternoon.
Although stocks were able to
work their way up from session lows, the market never generated a great deal of
momentum. That left stocks to still log sizable losses -- all 10 major sectors
ended the day down 1% or more -- and give the S&P 500 its lowest close in
more than a month.
Concerns about conditions in
Europe and an aversion to risk prompted some to rotate into the dollar. As a
result, the greenback gained ground against a basket of major foreign
currencies. This morning the Dollar Index set a one-month high, but by
session's end it was up a tame 0.3%.
Treasuries saw only limited
interest amid the carnage, even after the latest auction of 2-year Notes saw
very strong demand. The auction drew a bid-to-cover of 4.07, dollar demand of
$142.5 billion, and an indirect bidder participation rate of 42.2%. Dollar
demand was actually its strongest in more than 20 months.
Concerns about debt problems
in Europe and the US pressured crude oil prices today. Futures settled lower by
0.8% at $96.92 per barrel. Crude put in lows at $95.24 in late morning trade
but managed to bounce off those lows throughout the remainder of trade to
recoup some losses. Natural gas closed higher by 2.7% at $3.41 per MMBtu.
Futures rallied sharply into positive territory, notching highs at $3.44, in
late morning trade. They did pull back from those highs in the afternoon
session.
Margin selling, caused by the
sharp pullback in equities, pressured gold and silver today. Gold price shed
2.7% to settle at $1678.60 per ounce, while silver prices dropped 4.1% to end
at $31.07 per ounce. Today's lows, at $1670.50 and $30.65, are the metals worst
in around 1 month.
Advancing Sectors: (None)
Declining Sectors: Telecom -1.1%, Utilities -1.2%, Consumer
Staples -1.5%, Consumer Discretionary -1.5%, Materials -1.6%, Energy -1.7%,
Health Care -1.9%, Tech -1.9%, Industrials -2.3%, Financials -2.5%DJ30 -248.85
NASDAQ -49.36 NQ100 -1.9% R2K -2.4% SP400 -2.0% SP500 -22.67 NASDAQ Adv/Vol/Dec
436/2.05 bln/2132 NYSE Adv/Vol/Dec 447/932 mln/2607