U.S. Market Snapshot: Stocks Tumble Amid Intensified Worries Over Economic Growth
U.S. stocks came under intense selling pressure early in trading and remained in negative territory until close as investors focused on yesterday’s Fed message to the markets about keeping its balance sheet from shrinking and its comments on a “more modest” recovery than had been expected. Economic data on slowing economic activity in China and Japan further unnerved investors prompting them to flee from risky equities and commodities into the safe haven of the U.S. Treasurys and the U.S. dollar.
The Dow fell 2.49% with all sectors in negative territory. Basic materials fell 4.41% as Alcoa shares dropped 6%; industrials were down 3.6% with Boeing shares plunging 4.4% and the energy sector was down 2.45% leading the broader retreat.
The S&P 500 slid 2.82%, with all ten sectors in the red. The broad decline was led by industrials (down 3.65%), financials (down 3.56%) and basic materials (down 3.47%). In the sea of red a few companies stood out with rising shares: Carefusion Corporation (up 8.7%), Western Digital (up 2.8%), CF Industries Holding Inc. (up 0.8%) and Metro PCS Communications Inc. (up 0.8%). Macy’s shares also advanced 5.88% to close at US$20.52 after reporting better-than-expected Q2 earnings and upgrading the company’s business outlook for the rest of the year.
In Canada, the S&P/TSX composite index fell 2.14% with nine of the ten sectors in negative territory. Consumer goods, industrials, and energy were down for the day. On the plus side, only the technology sector rose by 1.27% for the day.
Into close, the S&P 500 index fell 31.59 points or 2.82% to end at 1,089.47.
The Dow lost 265.42 points or 2.49% to close at 10,378.83.
The tech-heavy Nasdaq composite index was down 68.54 points, or 3.01%, to close at 2,208.63.
On the economic calendar, the U.S. Bureau of Economic Analysis reported that the U.S. trade deficit widened by 18.8% to reach US$49.8 billion in June 2010, the largest deficit since October 2008, after a 4.1% widening in May and a 0.7% widening in April 2010. Imports continued to grow in June, rising 3% after a 2.8% increase in May. Meanwhile, exports fell back in June, down 1.3% after rising 2.5% in May. The goods deficit increased for the fifth consecutive month, widening by 14.2%. The services surplus also contracted by 1.7%, contributing to the widening of the trade deficit. For the third consecutive month, the widening of the deficit resulted entirely from non-petroleum trade. The non-petroleum deficit widened sharply in June by 24.2% after widening by 16% in May.
Treasury prices rose with the yield on the benchmark 10-year Treasury note down to 2.69% from 2.76% late Tuesday.
In commodity markets, light crude for September delivery settled down US$2.23, or down 2.8%, at US$78.02 per barrel on the New York Mercantile Exchange on worries about slowing global growth dampening oil demand.
In currency markets today, the dollar strengthened against a basket of majors on a flight-to-safety sentiment. EUR/USD traded at 1.2873, down from 1.3177 late on Tuesday in New York; Cable was quoted at 1.5667, down from 1.5853. USD/JPY traded at 85.39, down from 85.41. USD/CHF was at 1.0595, up from 1.0487, while USD/CAD was quoted at 1.0462, up from 1.0316.
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12 Responses to “U.S. Market Snapshot: Stocks Tumble Amid Intensified Worries Over Economic Growth”
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