YAHOO [BRIEFING.COM]: There
weren't any major headlines to digest Tuesday, leaving market participants to
prepare for earnings season, which unofficially starts this evening when Dow
component Alcoa (AA 7.79, -0.12) reports its latest quarterly
results.
With what is expected to be
another downbeat earnings season on the horizon, participants moved to take
profits for the second straight session. The decision to hedge against further
disappointment has led participants to send stocks 3.2% lower during the course
of the past two sessions. The selling effort has also helped lock in gains
registered in recent weeks; stocks are still up 22% from their March lows.
This session's losses were
broad-based as more than 90% of the companies in the S&P 500 closed lower.
Losses ranged from telecom's 3.7% drop to health care's 0.8% decline.
Health care's relative
resilience was largely owed to strength in shares of managed health care
providers (+4.3%). The group was able to rebound from weakness in prior
sessions after 2010 Medicare Advantage rates turned out to be better than
initially feared.
Financial stocks performed
in-line with much of the broader market for almost the entire session, but a
late selling effort forced the sector to close at its session low with a 3.2%
loss. REITs were some of the worst performing holdings in the financial sector.
Industrial REITs lost 13.2%, diversified REITs fell 11.5%, and residential
REITs sank 10.5%.
The influence of financials
caused the broader market to close in weak fashion.
Banks and financial services
companies were at the center of weakness in Europe, where Britain's FTSE fell
1.6%, Germany's DAX declined 0.6%, and France's CAC closed 0.9% lower.
Royal Bank of Scotland (RBS 7.72, -1.16) announced the United
Kingdom government will take a 70% stake in RBS. The bank is also cutting 9,000
jobs during the next couple of years, according to reports.
Financial giants Mitsubishi
UFJ (MTU 4.94, -0.12) and Mizuho Financial (MFG 3.86,
-0.08) undercut Japan's Nikkei, which closed 0.3% lower. Hong Kong's Hang Seng
slipped 0.5%.
Commodities trading was mixed
as crude oil futures contracts faced selling pressure throughout the session
and closed at $49.28 per barrel, down 3.5%. In contrast, June gold futures
contracts closed 1.2% higher to close at $883.30 per ounce, just below its
session high.DJ30 -186.29 NASDAQ -45.10 NQ100 -2.9% R2K -3.5% SP400 -3.3% SP500
-19.93 NASDAQ Adv/Vol/Dec 649/1.88 bln/2033 NYSE Adv/Vol/Dec 647/1.26 bln/2368