YAHOO [BRIEFING.COM]: The
stock market's six-session streak of gains ended in dramatic fashion as the
S&P 500 suffered its worst percentage loss in two months following news
that the Securities Exchange Commission (SEC) has levied a charge against
Goldman Sachs.
Moderate weakness in the early
going became something much worse with midmorning news that the SEC has charged
Goldman Sachs (GS 160.70, -23.57) and one of the company's
vice presidents with fraud related to subprime securities. Goldman Sachs saw
some $12 billion, or 13%, of its market cap evaporate. Concern that other
investment banks and brokerages may be implicated led the group to a 9.4% loss.
That undercut the broader financial sector, which fell 3.8% in its worst slide
since February.
While selling was the worst among
financials, more than 90% of the stocks in the S&P 500 retreated into the
red. Most market participants wanted to lock in profits after they had watched
the S&P 500 climb nearly 4% over the course of the previous 10
sessions, 7 of which marked improved 52-week highs.
Not even better-than-expected
earnings from blue chips Google (GOOG 550.15, -45.15), Bank
of America (BAC 18.41, -1.07), and General Electric (GE
18.97, -0.53) could keep sellers at bay this session. Participants initially
responded to reports from the trio with mixed interest as many believed plenty
good news had already been built in to the share prices. Some wanted more in
the way of improved outlooks.
Economic data was split
between positive and negative. Housing starts for March hit an annualized rate
of 626,000, which was more than the rate of 610,000 that had been expected and
the highest rate in more than one year. Building permits for March came in at
an annualized rate of 685,000, which was above the rate of 625,000 that had been
expected and was also the highest rate in more than one year.
On the other side of things,
the preliminary Consumer Sentiment Survey for April from the University of
Michigan came in at 69.5, which was not only below the 75.0 that had been
widely expected, but it was also the worst reading since November.
The drastically soured tone
turned some to Treasuries. In turn, the benchmark 10-year Note saw its yield
slip to 3.76%, which is roughly 25 basis points below where it sat about two
weeks ago.
Market weakness and a stronger
dollar pressured a broad range of commodities this session. The effort
culminated in a 1.2% loss for the CRB Commodity Index.
News that the SEC has brought
fraud charges against Goldman Sachs (GS 160.15, -24.12) led to
a wave of selling in the broader market. Ensuing volatility helped the dollar
secure its gain, such that the Dollar Index remains 0.4% higher.
Precious metals were under
some of the stiffest pressure. Gold prices dropped 2.0% to $1137 per ounce,
while silver slumped 4.1% to settle at $17.68 per ounce.
Oil prices were pushed 2.7%
lower to $83.24 per barrel. It had been as low as $82.52 per barrel.
Natural gas was independent of
the other primary commodities. Contract prices managed to make their way 1.6%
higher to $4.05 per MMBtu.
Volatility also spiked in
response to this session's selling. The Volatility Index, often
euphemistically dubbed the Fear Index, spiked approximately 15%. Amid such
action, many have come to question whether the stage has been set for a larger
correction or if money will start to move in from the sidelines.
Trading volume surged to its
highest level in nearly one month, but it is unclear how much of that is owed
to this session's negative headlines since this was an options expiration
session.
Advancing Sectors: (None)
Declining Sectors: Financials (-3.8%), Materials (-1.8%),
Industrials (-1.6%), Energy (-1.5%), Consumer Discretionary (-1.4%), Tech
(-1.4%), Utilities (-1.1%), Telecom (-0.8%), Health Care (-0.6%), Consumer
Staples (-0.3%) DJ30 -125.91 NASDAQ -34.43 NQ100 -1.3% R2K -1.3% SP400 -1.2%
SP500 -19.54 NASDAQ Adv/Vol/Dec 726/2.85 bln/1962 NYSE Adv/Vol/Dec 571/1.75
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