YAHOO [BRIEFING.COM]: Participants
put an end to a three session streak of gains by sending stocks 2% lower
Tuesday. The downward push came as financial stocks fell out of favor and
disappointing retail sales data led some to second guess the prospects of
retailers.
Financial stocks weighed on
the broader market for the entire session and finished with a 7.7% loss. The
sector's weakness was widespread, but investment banks and brokerages (-10.7%)
suffered some of the steepest declines after Goldman Sachs (GS 115.92, -14.23) announced a $5
billion common equity offering that was discounted from the prior session's
closing price. The offering will also prove dilutive to existing shareholders, but
is intended to help repay TARP funds.
Goldman did manage to generate
strong trading results, which helped it overcome weakness in its investment
banking and consulting arm. That helped the company post better-than-expected
earnings results.
A better-than-expected
earnings announcement and a reaffirmed outlook from Johnson & Johnson (JNJ 51.37, +0.22) helped health care
stocks fend off most of the session's selling effort, though shares of JNJ
inevitably closed near their session low. Health care closed 0.3% lower, but
was still the best performing sector this session.
Due to widespread weakness,
nearly 80% of the companies in the S&P 500 finished lower. Sellers were
particularly unkind to small- and mid-cap stocks as the Russell 2000 fell 3.2%
and the S&P 400 dropped 2.6%. Both indices posted declines in each of the
past two sessions, but are still up 15.3% and 14.3%, respectively, in the past
month.
Shares of retailers fell 2.5%
this session after data showed retail sales for March declined 1.1%, which is
worse than the 0.3% increase that was expected. That caused a number of
investors to second guess the recent run seen in retail stocks; retailers
climbed more than 4% last week and almost 6% the week before.
In other economic news,
producer prices for March declined 1.2% month-over-month. Economists had
expected the index to remain flat after a monthly increase of 0.1% in
February. Core producer prices were flat month-over-month, which was
relatively in-line with the 0.1% increase that was widely expected. February
core PPI had increased 0.2% month-over-month.
Meanwhile, February business
inventories decreased 1.3%, which is generally in-line with the 1.2% decline
that was expected. Inventories also decreased 1.3% in the prior month.DJ30
-137.63 NASDAQ -27.59 NQ100 -1.1% R2K -3.2% SP400 -2.6% SP500 -17.23 NASDAQ
Adv/Vol/Dec 867/1.43 bln/1850 NYSE Adv/Vol/Dec 932/1.21 bln/2111