YAHOO: On Wednesday, stocks
tumbled 5.3%, ending at session lows in broad-based weakness. The decline
was driven by profit taking, and discouraging economic data on employment and
the services sector. Meanwhile, investors digested Barack Obama winning
the presidency and other election results.
According to the ADP national
employment report, nonfarm private employment declined by 157,000 in October,
which is the largest decline since 2002. The result was worse than the
expected drop of 100,000. September was revised to a decrease of 26,000
from a decrease of 8,000. The ADP data have had a spotty track record compared
to the government's report, which includes both public and private nonfarm
payrolls, and is set for release on Friday.
The services sector contracted
by the most since at least 1997 and the sixth time this year, according
Institute for Supply Management's national nonmanufacturing survey, which
dates back to 1997. Specifically, the October ISM Services Index
registered 44.4 in October, 2.6 worse than expected and 5.8 lower than the 50.2
reading in September. A reading below 50 is intended to imply contraction in
the services sector.
In corporate news, Google
(GOOG 342.57, -24.37) announced on its blog that it decided to end its
advertising agreement with Yahoo! (YHOO 13.93, +0.58) after it
became clear that government regulators and some advertisers continued to have
concern about the pact. Google traded down on the news, while Yahoo saw a boost
as traders speculated this may open the door to another Microsoft (MSFT
22.07, -1.46) offer.
All ten of the economic
sectors posted a loss.
Financials (-8.8%) were the
main laggard. A wider-than-expected quarterly losses from bond insurers Ambac
(ABK 2.06, -1.34) and MBIA (MBI 8.31, -2.15) along
with a disappointing earnings and outlook from REIT General Growth
Properties (GGP 2.09, -2.40) added to selling interest.
The energy sector fell 4.6% as
crude prices plunged 7.4% to $65.28 per barrel. The drop in oil prices
was fueled by economic concerns and weekly energy inventory data that showed
the sixth increase in crude stockpiles and an increase in gasoline levels.
Quarterly earnings
results were mixed, with outlooks leaning negative. Some notable companies
that reported worse-than-expected earnings include Arcelor
Mittal (MT 25.16, -6.54), Duke Energy (DUK 15.61,
-1.31), Marsh McLennan (MMC 26.07, -3.63), MBIA (MBI
8.31, -2.15), Molson Coors (TAP 41.87, +3.29) and Transocean
(RIG 80.61, -3.91).
Devon Energy (DVN 79.64, -3.36), Medco Health
Solutions (MHS 41.45, +3.45), Polo Ralph Lauren (RL
48.54, -0.97), Sara Lee (SLE 10.22, -1.64), and Time
Warner (TWX 10.15, -0.68) beat in their latest quarters.
The S&P 500 is now down
1.7% this week, but is still up 13.5% from its Oct. 10 multi-year low. It
is down 37.5% this year.DJ30 -486.01 NASDAQ -98.48 NQ100 -5.7% R2K -5.7% SP400
-5.1% SP500 -52.98 NASDAQ Adv/Vol/Dec 534/2.18 bln/2232 NYSE Adv/Vol/Dec
603/1.31 bln/2490