Market Snapshot: U.S. Stocks Mixed After Recouping Most of Intraday Losses
The U.S. stocks finished mixed to lower recovering from sharp losses in early trading. European credit crisis fears and escalating tension on the Korean peninsula weighed on stocks pushing the Dow below 10,000 in early trading. In the last trading hour stocks pared losses and the S&P 500 inched up into positive territory and the Dow finished losing 22.82 points after sliding 190 in morning trading.
In the S&P 500 the advance was led by the basic materials group (1.91%), followed by financials (0.74%), consumer services (0.54%) and telecom (0.23%), while the rest of the sectors finished in the red. Similar sectors helped lift the Dow from intraday lows. Financials gained on the strength of bank stocks after the remarks by House Financial Services Committee Chairman Barney Frank indicated that a provision to force banks to wall off their derivates business “goes too far.”
The VIX index, the so called investors’ fear gauge, fell 10% from 38.32 to 34.61 today. The past few weeks have seen big moves in the volatility index reflecting an increase of uncertainty in the market.
In Europe, worries have deepened over the sovereign debt crisis spreading into the banking sector and triggering another sharp sell-off in risky assets. European major bourses finished lower: the Italian FTSEMIB slid 3.40%, the Spanish IBEX 35 fell 3.05%, the French CAC 40 lost 2.90%, the London FTSE 100 fell 2.34% and German DAX was down 2.34%.
On the economic calendar, the S&P/Case-Shiller 20-City Composite Index fell 0.5 m/m on a seasonally unadjusted basis in March 2010, the sixth consecutive month of decline, following a 0.9% decline in February. On a year over year basis, prices rose 2.3%, the second y/y gain since December 2006. On a seasonally adjusted basis, the index fell 0.05%, the second consecutive month of decline, but was up 2.4% y/y.
The Conference Board consumer confidence index continued to improve in May 2010, rising to 63.3 from 57.7 in April, continuing the gain posted since March, after collapsing sharply in February. (The index value stood at 100 in 1985.) The Present Situation Index continued to rise, climbing to 30.2 in May from 28.2 in April, after reaching a 27-year low in February, while the expectations index jumped to 85.3 from 77.4 in April. Consumers’ optimism regarding future conditions was significantly better in May, regarding business conditions as well as job prospects.
Into close, the S& P 500 index rose 0.38 points, or 0.04%% to close a t 1,074.03.
The Dow lost 22.82 points, or 0.23% to close at 10,043.75.
The tech-heavy Nasdaq composite index was down 2.60 points, or 0.12% to close at 2,210.95.
Treasurys prices soared on a flight to safety sentiment today. The yield on the benchmark 10-year Treasury note was down yielding 3.16% from 3.23% from late on Friday.
Crude for July delivery settled down $1.46 at $68.75 a barrel on the New York Mercantile Exchange on continued worries over European sovereign debt.
In currency markets today the euro continued sliding against the yen and the dollar.
In currency, EUR/USD traded at 1.2344 late on Tuesday in New York, Cable was quoted at 1.4406. USD/JPY traded at 90.21. USD/CHF was at 1.1565, while USD/CAD was quoted at 1.0670.
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I would venture to suggest another explanation…that the so-called recoveries are epheremal and are for public consumption only. Given how much money has been poured in and the levels of indebtedness, particularly in the US, there is no real answer except a prolonged period of slight growth. Tricks like unheralded devaluations are mere mirages and… See More in the end some unprincipled governments will try to inflate their way out of the problem. Prices are already rising in the US while corporations are squeezing wages.