YAHOO [BRIEFING.COM]: Choppy
trading in the early going gave way to broad-based selling, which resulted in
the stock market's fourth decline this week. As a result, stocks logged a
weekly loss of 5.0%, which is its worst in two months.
Stocks struggled to find clear
direction in the first couple of hours of trading. Participants were generally
uninspired by news that the Euro zone economy contracted for its fourth
consecutive quarter, and that the pace of that contraction has accelerated.
Despite the dour batch of data, European indices closed in mixed fashion.
U.S. economic data also
did little to motivate. The April Consumer Price Index (CPI) met expectations
by coming in flat, while Core CPI saw a stronger increase than had been expected
by coming in with a 0.3% monthly increase. Industrial production for April fell
0.5%, which wasn't quite as bad as what had been expected, and capacity
utilization came in at 69.1%, moderately better than what was expected.
Though the economic readings
were generally in-line to slightly better than expected, participants are
beginning to look for signs that economic conditions are actually tilting
toward growth.
News that life insurers will
have access to $22 billion in TARP funds initially won support for the group.
However, concern that government funds may not win higher ratings for the
companies along with the recognition that many companies continue struggling
with macro headwinds undercut the group's strength. Life and health insurers
finished 3.5% lower.
In a similar vein, rating
agency Fitch placed several regional banks on Credit Watch Negative amid
concern related to further credit deterioration. Regional banks finished the
session 3.0% lower.
Weakness in insurers and
banking issues dragged the financial sector to a 2.5% loss, which was worse
than any other sector. With abounding weakness in the financial sector, the
broader market was left without one of its primary leaders.
Sellers also hit energy stocks
with stiff pressure. The sector shed 2.2%. Its weakness was exacerbated by a
3.6% drop in crude oil prices, which settled at $56.52 per barrel.
Utilities underperformed for
the entire session, extending the prior session's weakness. Electric utilities
fell 2.7% amid news that FirstEnergy (FE 36.47, -3.87) held a disappointing
rate auction.
Retailers showed periodic
strength in the wake of better-than-expected earnings from Nordstrom (JWN 22.58, +1.63) and JC Penney (JCP 26.51, -0.11), but the group still
finished 0.7% lower.
Tech, which is the largest
sector in the S&P 500 by market weight, showed relative strength and
actually spent the majority of the session as the only sector in the green.
While several large-cap tech stocks held their gains, the broader tech sector
was unable to fight off the negative bias and finished 0.1% lower.
The broader market did find
some support late in the session, but only after it broke below its 20-day
moving average to hit 880. Stocks recovered a bit from there, but still
finished with broad-based losses as declining issues outnumbered advancers by
3-to-1 in the S&P 500.
Options for May expired this
session, but that didn't seem to lift trading volume above recent averages.
Less than 1.5 billion shares traded hands on the NYSE big board this session.
DJ30 -62.68 NASDAQ -9.07 NQ100 -0.3% R2K -1.0% SP400 -1.1% SP500 -10.19 NASDAQ
Adv/Vol/Dec 1052/2.11 bln/1626 NYSE Adv/Vol/Dec 1088/1.48 bln/1922