YAHOO [BRIEFING.COM]: For the
second straight session health care stocks traded with strength while the
broader market fell in range-bound trade.
Health care stocks
outperformed the broader market for the entire session. They primarily
benefited from strength in health care distributors (+4.9%), which followed
better-than-expected earnings and an increased outlook from McKesson (MCK
52.01, +4.18).
However, the health care
sector's strength was undercut by losses among managed care providers (-3.8%),
which followed a disappointing report from WellPoint (WLP
51.28, -3.10). WellPoint topped the consensus earnings estimate, but fell short
with its benefit expense ratio, decreased operational earnings guidance, and
increased cost trend forecast.
Still, the health care sector
netted a modest 0.3% gain. Telecom (+0.8%) and consumer staples stocks (+0.4%)
were the only other major sectors in the S&P 500 to log gains.
Yahoo! (YHOO 15.14, -2.08) made headlines this
morning by finally signing a deal to pair parts of its Internet search service
with Microsoft (MSFT 23.80, +0.33). Though the announcement
didn't have much impact on the broader market, shares of YHOO were among the
most actively traded names by volume this session. However, they were also one
of the sharpest decliners by percent.
Market participants were also
largely uninspired by news that durable goods orders for June made their worst
drop since January by falling 2.5%, which was worse than expected. Meanwhile,
orders less autos made a surprisingly strong increase of 1.1%. That was better
than expected and made for the first back-to-back increase since March and
April of 2008.
Stocks and Treasuries fell to
session lows following a disappointing auction of $39 billion worth of 5-year
Treasury Notes. The auction saw a high yield of almost 2.69% and a bid-to-cover
ratio of 1.9. The benchmark 10-year Note responded by surrendering its gains
and sending its yield roughly 10 basis points higher to 3.73%. It did recover,
though, to finish 5 ticks into the green with a yield of 3.67%. Stocks
were also able to recover, though they failed to make their way into positive
territory. Still, the S&P 500 more than halved its losses in the final hour
of the session.
The latest version of the
Fed's Beige Book was released this afternoon. It told of moderated economic
decline, albeit at a low level, but an underlying message is that the market is
getting ahead of itself with its recovery trade.
With that in mind, it seemed
justifiable for traders to move in concerted fashion against commodities. The
CRB Commodity Index sank 2.7% in its worst single-session performance in three
months as crude oil prices dropped 5.8% to settle at $63.35 per barrel and gold
prices fell 1.3% to $927.20 per ounce. Crude prices were hit doubly by an
unexpected inventory build and a stronger U.S. dollar -- the greenback made its
best move in more than one month as it gained 0.9% against a basket of major
foreign currencies.
Weakness in oil prices and
other commodities prices weighed heavily on energy and materials stocks. Energy
shed 2.1%, unable to benefit from a batch of better-than-expected earnings from
ConocoPhillips (COP 42.86, -1.57) and Hess (HES
51.72, -1.85).
Meanwhile, the materials
sector fell 2.1% with steel stocks showing some of the most weakness after Arcelor
Mittal (MT 34.27, -2.3) and Nippon Steel posted ugly losses for the
latest quarter.
Amid choppy trading and broad-based
declines, the Volatility Index moved 2.4% higher in its third straight advance.
It is up more than 10% week-to-date and at levels not seen for two weeks. DJ30
-26.00 NASDAQ -7.75 NQ100 -0.4% R2K -0.7% SP400 -0.7% SP500 -4.47 NASDAQ
Adv/Vol/Dec 988/2.09 bln/1617 NYSE Adv/Vol/Dec 1180/1.25 bln/1834