YAHOO: Global economic
concerns and earnings concerns sank stocks for the second straight session.
The S&P 500 spent the
entire session in negative territory, falling 6.1% to its lowest closing level
in five years. Weakness was broad-based with 478 of the S&P
500 components posting a loss, although volume was on the light side when
considering the scope of this session's move.
Similar to Tuesday, the
majority of companies (56%) reported better-than-expected earnings for the
latest quarter, but outlooks were negative. Of the companies that issued
earnings guidance with their quarterly reports, 39% were negative, 29% were
in-line, 24% were mixed and only 7% were positive.
A few of the more widely-held
names that topped earnings estimates include Apple (AAPL
96.57, +5.08), McDonald's (MCD 54.46, -0.67), Merck (MRK
28.02, -6.51) and Phillip Morris International (PM 40.94,
-1.22). Of note, Merck plans to cut 7,200 jobs, or 13% of its workforce.
Yahoo! (YHOO 12.39, +0.32) reported a profit drop
that met estimates, and said it plans to lay off 10%, or 1,500, of its
workforce.
AT&T (T 23.93, -1.80) and Boeing (BA
43.03, -3.37) are two of the bigger names that missed earnings estimates.
All ten of the economic
sectors posted a loss, ranging from -10.4% (energy) and -3.8% (consumer
staples)
A sharp drop in crude prices
in conjunction with disappointing earnings from ConocoPhillips (COP
49.06, -4.90) and Baker Hughes (BHI 30.43, -8.52) caused a
10.4%decline in energy stocks.
On related note, the material
sector fell 8.3% as copper prices plunged 9.7%.
The defensive-oriented
consumer staples sector outperformed on a relative basis with a decline of
3.8%.
The dollar rallied for the
third straight session, with today's gains fueled by weakness in overseas
markets and Bank of England Governor King saying that a U.K. recession
seems likely -- The DJ World Index excluding US dropped 6.8%.
The strength in the dollar and
global economic fears sparked a broad-based sell-off in commodities (-4.5%).
Crude oil prices plunged 7.4% to $66.84, with selling interest compounded by
the fourth straight weekly increase in inventory levels.
As stocks and commodities
faltered, the long end of the Treasury curve rallied as investors sought
safety. The benchmark 10-year note climbed more than a point to push its yield
down to 3.60%. DJ30 -514.45 NASDAQ -80.93 NQ100 -3.6% R2K -5.9% SP400 -5.4%
SP500 -58.27 NASDAQ Adv/Vol/Dec 353/2.57 bln/2391 NYSE Adv/Vol/Dec 461/1.56
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