Stock Market News for January 21, 2010 - Market News
Disappointing earnings reports in the U.S. and concerns that a tighter lending in China would hurt the global economic recovery led to a broad sell-off on the Street Wednesday. A stronger dollar hurt commodities, sending energy and material companies lower.
Investors also had their focus on an unexpected Republican election to the Massachusetts Senate seat. The Republican election means Democrats no longer have the filibuster-proof majority in the Senate to pass the health care reform bill.
The Dow Jones industrial average closed down 122 points, wiping off Tuesday’s gains. IBM (NYSE:IBM) led the decliners on the DJIA as investors considered its not-so-impressive outlook. The broader S&P 500 index fell 12 points, or 1% and the tech-heavy Nasdaq composite lost 29 points, or 1.3%. On the New York Stock Exchange, declining issues were ahead of advancing shares by almost three to one on volume of 1.06 billion shares. The market’s measure of volatility, the CBOE Vix, jumped 6.3% to 18.68.
Only six of the thirty DJIA components managed to end the day in the green. Those dragging the DJIA lower included Hewlett-Packard (NYSE:HPQ), Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), Boeing (NYSE:BA), United Technologies (NYSE:UTX) and Wal-Mart Stores (NYSE:WMT).
As investors shunned riskier assets, US Treasuries jumped, with the 10-year up 12/32, as its yield fell to 3.653%. The US dollar continued higher, up 0.6% to 78.24 against a basket of currencies after hitting a one-month high against the euro on Greece debt concerns.
Shares in Alcoa (NYSE:AA) continued lower, off 2.5%, after its recent earnings miss and fears that China’s move to contain liquidity would impact firms supplying goods to that country. A ratings downgrade at Fitch and a promised "no-vote" from investor Warren Buffett after Kraft (NYSE:KFT) raised its bid to buy British chocolatier Cadbury (NYSE:CBY) sent shares in the US company down 2.1%
All ten S&P 500 industry sectors ended in the red, led by declines in oil and gas (-1.7%), basic materials (-1.6%), telecommunications (-1.5%), technology (-1.4%), consumer goods (-1.3%), industrials (-1.2%), utilities (-1.0%), consumer services (-0.8%), health care (-0.5%), and financials (-0.2%). Only 70 of the S&P500 managed gains on the day.
Shares in Bank of America closed the day unchanged as investors scrutinised its numbers. The earnings miss at Bank of America (NYSE:BAC) notwithstanding, traders found the news soothing that its credit problems were starting to stabilize, as its provision for credit losses fell 14% to $10.1 billion. The firm's $5.2 billion loss of 60 cents was worse than the 52 cent loss expected. Shares in Morgan Stanley's (NYSE:MS) fell 2.7% after the company reported an earnings miss; its operating results of 14 cents a share missed estimates of 36 cents. Wells Fargo (NYSE:WFC) shares fell 1.6% even after reporting profits of 8 cents, well ahead of an expected 1 cent loss.
Housing stocks were also lower in yesterday’s trade, with Hovnanian (NYSE:HON) off 3.0%, Lennar (NYSE:LEN) down 2.9%, and Toll Brothers (NYSE:TOL) off 2.4%.
Companies reporting their numbers include American Express (NYSE:AXP), Advanced Micro Devices (NYSE:AMD), Capital One Financial (NYSE:COF), Burlington Northern (NYSE:BNI), Goldman Sachs (NYSE:GS), Google (NASDAQ:GOOG), Union Pacific (NYSE:UNP) and UnitedHealth Group (NYSE:UNH).
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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