YAHOO [BRIEFING.COM]: A late
bout of buying helped stocks settle above session lows, but the broad market
still booked a sizable loss as participants focused on the formidable
challenges facing eurozone officials and a disappointing forecast from Intel.
Concerns about the macro
picture were revived early this morning. Market participants digested data that
indicated China experienced during November a slowdown in export growth, which
many regarded as a sign of deceleration in the country that has helped prop up
the global economy.
Sentiment in Europe soured as
traders shifted their focus from the agreements struck during the eurozone
summit to the difficult task of efficiently implementing plans and reaching a
consensus on those topics that eluded officials last week. Responding to
worries that such processes will continue to slog along without real results,
yields on the debt of countries in the eurozone periphery were sent higher. The
region's major bourses were also punished by sellers, such that the EuroStoxx
50 fell about 1.6%.
Weakness was exacerbated ahead
of the open by a disappointing outlook from Dow component and semiconductor
bellwether Intel (INTC 24.00, -1.01). The stock's 4% loss was
its worst single-session slide in about 4% and dragged down the rest of the
semiconductor space so that the Philadelphia Semiconductor Index shed nearly
3%.
In the face of widespread
weakness telecom stocks were able to limit their losses to a collective decline
of only 0.3%, which is about one-fifth of what the broad market suffered. In
times of volatility, many analysts favor the sector for its stable businesses,
strong balance sheets, and hefty dividends. That said, consumer discretionary
plays also limited their losses to a collective decline of 0.3%.
Trading volume was paltry this
session, coming in below 800 million on the NYSE. That makes for a more muddled
picture when trying to assess sentiment since low share volume suggests less
participation.
Favor for safety also
compelled traders to rotate into the dollar, which gained about 1.2% against a
basket of competing currencies by session's end.
Treasuries also traded higher,
but the yield on the benchmark 10-year Note had difficulty breaking below
2.00%. Treasuries even had trouble adding to gains after results from an
auction of 3-year Notes proved exceptionally strong. The auction drew a
bid-to-cover of 3.62, dollar demand of $115.8 billion, and an indirect bidder
participation rate of 39.1%. For comparison, an average of the past six
auctions results in a bid-to-cover of 3.28, dollar demand of $104.8 billion,
and an indirect bidder rate of 38.4%.
Strength in the dollar, caused
by concerns about the euro zone and poor Chinese econ data, pressured
commodities throughout the session. Gold ended lower by 2.8% at $1667.60 per
ounce, while silver finished off 3.4% at $31.14. Both metals spent the afternoon
session trading around near their respective lows, at $1660.30 and $30.92.
Crude oil finished lower by
1.7% at $97.77 per barrel. Futures spent the session trading around the $98
mark, unable to recoup any losses from the overnight sell-off. Natural gas closed
down 1.9% at $3.26 per MMBtu
Advancing Sectors: (None)
Declining Sectors: Telecom -0.3%, Consumer Discretionary
-0.3%, Consumer Staples -0.8%, Utilities -1.0%, Health Care -1.2%, Tech -1.5%,
Industrials -1.8%, Materials -2.2%, Energy -2.4%, Financials -2.6%DJ30 -162.87
NASDAQ -34.59 NQ100 -1.1% R2K -1.9% SP400 -1.7% SP500 -18.72 NASDAQ Adv/Vol/Dec
635/1.54 bln/1922 NYSE Adv/Vol/Dec 616/775 mln/2418