YAHOO[BRIEFING.COM]:
Sellers took control of the stock market early on, driving losses for the third
time in four sessions. The decline was deep and broad as 95% of the companies
in the S&P 500 finished lower, while all 30 Dow components logged a
loss in their worst performance since Dec. 1.
The lack of buying in the broader market reflects waning confidence
in corporate profits. Revived profit concerns have been particularly strong in
the financial sector (-5.7%), which has fallen nearly 13% during over the last
five sessions.
The concerns appear justified as Deutsche Bank (DB 28.98, -2.92) announced it expects to
post a fourth quarter loss of 4.8 billion euros, or
$6.3 billion. The bank also slashed its dividend to 0.5 euros
from 4.50 euros.
Word that Citigroup
(C 4.53, -1.37) and Morgan Stanley
(MS 17.19, -1.67) are joining their brokerage businesses did little to relieve
the sector. Morgan Stanley will pay Citi $2.7 billion
for a 51% stake in the venture, but many believe Citi
will use the funds to stem ongoing losses. Citi is
expected to post a loss when it reports its quarterly results Friday. Shares of
C fell to their lowest level since their November low.
Disappointing economic data also weighed on sentiment this session.
Advance December retail sales dropped 2.7% month-over-month. Excluding autos,
sales were down 3.1%. Though the consensus estimate called for a drop, actual
results were much worse than expected. The consensus called for a 1.2% decline
in retail sales, and a 1.4% decline when excluding autos.
Softer consumer spending has caused such companies as Under Armour
(UA 19.40, -3.25) and Tiffany
(TIF 21.95, -0.05) to guide their earnings estimates below analysts' consensus
forecast. The two were among the latest companies to cut their outlooks.
Energy companies also fell under stiff selling pressure this
session. The sector dropped 4.3% amid weakness in oil and gas refiners (-6.8%)
and oil and gas equipment companies (-6.3%). Integrated oil companies fell
3.6%.
In addition to the broad wave of selling, energy stocks were also
hurt by falling crude prices. Crude closed roughly 1% lower at $37.40 per
barrel. It had been down more than 4.0%, which was reached shortly after the
latest inventory data revealed a build of 1.14 million barrels. Though a build
of 2.5 million barrels was expected, rising inventory levels continue pointing
toward softer demand amid stiff economic headwinds.
More than 1.4 billion shares traded hands on the NYSE this session.
That was the most since Dec. 19. All three major indices closed at their lowest
level in more than one month.DJ30 -248.42 NASDAQ -26.82 SP500 -29.17 NASDAQ Adv/Vol/Dec 477/1.95
bln/2263 NYSE Adv/Vol/Dec 318/1.42 bln/2793