YAHOO [BRIEFING.COM] : A lack
of leadership prompted participants to send the stock market lower in another
thinly traded session.
Trading volume remains light
ahead of the Dec. 25 holiday. Less than 1 billion shares were exchanged on
the NYSE this session. That is the least volume in a full trading day since
August.
Stocks actually opened with
broad-based gains, advancing as much as 1.0%. Those gains quickly turned into
losses, though, as sellers entered the ring, focusing much of their effort on
the financial sector.
Financials were up as much as
1.2%, but finished the session 1.9% lower as the worst performing economic
sector. The sector's weakness was largely attributable to diversified financial
players, which will still be facing formidable obstacles in 2009. Bank
of America (BAC 12.76, -0.77) and JPMorgan Chase (JPM
29.14, -0.68) traded as laggards, and also weighed on the Dow.
Goldman Sachs (GS 75.34, -1.66) and Morgan
Stanley (MS 14.44, -0.14) also finished lower. Analysts at JPMorgan
lowered their earnings estimates for Goldman, but raised their estimates for
Morgan Stanley.
Concern continues to surround
automakers. Standard & Poor's lowered the unsecured debt rating of General
Motors (GM 3.01, -0.51) to C from CC, even though the government plans
to provide GM with financing. Meanwhile, Moody's lowered Ford's (F
2.19, -0.40) credit rating to Caa3.
Economic data did little to
entice buyers into the market. The latest batch of home sales remained weak.
November new home sales declined 2.9% to an annualized rate of 407,000 units,
which is the lowest level in 17 years. The consensus forecast called for new
home sales of 415,000.
November existing home sales
declined 8.6% to an annualized rate of 4.49 million units, which is worse than
the already-depressed levels seen in recent months. The consensus called for
4.93 million sales.
Final third quarter GDP data
came without major surprise. The economy contracted at an annualized rate
of 0.5%, which is unchanged from the prior reading. The personal consumption
component was down 3.8%, while the core personal consumption component was up
2.4%. Economists expected the consumption levels to remain unchanged from the
prior reading at -3.7% and +2.6%, respectively.
European exchanges closed with
mixed results. Britain's FTSE finished 0.2% higher as its investors overcame
news that the economy officially slipped 0.6% during the third quarter. British
banks were key in the advance. Banks and financial companies in Germany helped
limit weakness in the DAX, which fell 0.2%. France's CAC lagged, closing 0.7%
lower.
The MSCI Asia-Pacific Index closed 2.8% lower in the wake of yesterday's loss warning from Toyota Motor (TM 60.36, -0.52). The fact China cut its benchmark rate by a less-than-expected 27 basis points to 5.31% also weighed on sentiment. The Hang Seng shed 2.8% as developers and banks showed weakness. Japan's markets were closed for holiday observance. DJ30 -100.82 NASDAQ -10.81 NQ100 -0.5% R2K -1.4% SP400 -0.9% SP500 -8.48 NASDAQ Adv/Vol/Dec 984/1.31 bln/1835 NYSE Adv/Vol/Dec 1205/984 mln/1886