YAHOO [BRIEFING.COM]: Another
broad-based wave of high-volume selling sent stocks to their worst percentage
loss in more than one year, but things could have been far worse since the Dow
was actually down nearly 1,000 points in its worst intraday drop on record.
Weakness was widespread for
the entire session as participants showed an aversion to risk. That theme
caused sovereign debt credit spreads to widen and many of the global indices to
drop so much that the Dow Jones World Index fell 2.7% in its worst
single-session percentage slide since February.
U.S. equities found little
support as the Dow, Nasdaq, and S&P 500 spent the first part of the session
with broad-based losses. Follow through selling caused a breakdown in technical
support, including a violation of the 200-day moving average. Selling soon went
from frantic to panic as the Dow dropped nearly 500 points in five minutes.
That gap down put the Dow nearly 1,000 points into the red.
Though there was talk that a
program or system error led to the cascade of selling, media reports indicated
that the major exchanges said there was no error on their part.
While stocks had looked to be
headed for something awful, computer programmed trades quickly clicked to buy
and drove the Dow back up several hundred points in a matter of minutes. The
Dow closed almost 650 points above its session low, but it still lost nearly
350 points on the session.
Few were able to stage a gain
this session. In fact, some 97% of the names in the S&P 500 logged a loss.
Such weakness culminated in the worst percentage loss for the S&P 500 this
year. What's more, the benchmark index has now lost more than 6% during the
course of the past three sessions, which makes for its worst three-session
slide in over 12 months.
Volatility surged as a result
of the midafternoon selloff. The Volatility Index was actually up more than 60%
at its session high. That put the "fear gauge" to its highest level
in more than one year.
An interest in safety drove
the dollar to a new one-year high against competing currencies. It finished
0.9% higher.
Most of the greenback's gain
came against the euro, which remained weak in the wake of the European Central
Bank's decision to keep its target interest rate unchanged at 1.00%, as
expected. News that Greece passed planned austerity measures in a nonbinding
preliminary vote failed to help the euro, too.
Despite strength in the
dollar, market participants chased gold prices to 2010 highs. The yellow metal
closed pit trade at $1197.30 per ounce, up 1.6%.
Treasuries also spiked -- so
much that the benchmark 10-year Note climbed more than one point and its yield
fell below 3.40 for the first time this year.
The CRB Commodity Index fell
another 2.0% today. The index is down nearly 6% since Monday morning.
Industrial commodities fell 4.6%, led by an 11% decline in July nickel futures.
Selling in the energy space
was relentless. June crude oil futures fell 3.6% to close at $77.11 per barrel.
Prices actually sank below the $75 level in the panicked selling before the
3:00 hour. June crude oil is currently trading around the $76 level in the
electronic trade; it has lost about 12% since Monday's highs. Meanwhile,
natural gas outperformed this session. The June contract fell 1.3% at close at
$3.94 per MMBtu.
Gold shined as the
"safe-haven" trade amid the panic. June gold closed 1.6% higher in
the pit trade to close at $1197.30 per ounce. It spiked to just under the $1210
level, though, as the selling in the market peaked. It is currently trading
just below the $1200 level in the electronic trade. Gold is up over 3.5% since
yesterday morning. Silver, on the other hand, was relatively unchanged at
$17.52 per ounce.
Trading volume was its highest
level all year as more than 2.5 billion shares exchanged hands on the NYSE
this session. The heightened participation is frequently associated with
increased conviction among market participants.
In economic news, the latest
weekly jobless claims count showed 444,000 initial claims were filed for the
week ended May 1 and 4.59 million continuing claims were recently recorded.
Both were generally on par with expectations, but the data was largely an dismissed
ahead of the government's official nonfarm payrolls report tomorrow morning.
Advancing Sectors: (None)
Declining Sectors: Financials (-4.1%), Consumer Discretionary
(-3.5%), Energy (-3.4%), Industrials (-3.3%), Tech (-3.3%), Materials (-3.1%),
Utilities (-2.7%), Health Care (-2.6%), Telecom (-2.4%), Consumer Staples
(-2.4%) DJ30 -347.80 NASDAQ -82.65 NQ100 -3.3% R2K -3.8% SP400 -3.4% SP500
-37.75 NASDAQ Adv/Vol/Dec 330/4.42 bln/2418 NYSE Adv/Vol/Dec 173/2.57 bln/26