Stock Market News for February 24, 2010 - Market News
U.S. stocks fell Tuesday after a surprise drop in consumer confidence spurred concern about the strength of the economic recovery. A weak reading on a German industrial sentiment index further soured sentiments even as Home Depot came out with better-than-expected quarterly numbers and announced a dividend hike.
Investors appeared jittery as a plethora of issues, ranging from debt issues at home and abroad to disappointing economic readings, reminded them about the fragility of the global economic recovery. Investors shunned equities and turned their focus towards safe-haven US securities, sending commodity prices lower. The US dollar rose against a basket of currencies. Riding on their safe-haven appeal, treasuries gained, with the 10-year up 28/32 in price as its yield fell 11 basis points, its sharpest drop in two weeks to 3.689%.
Yesterday, the blue-chip Dow Jones industrial average dropped 101 points, or 1.0% to 10,282. Alcoa (NYSE:AA) and American Express (NYSE:AXP) led the decliners, off 2.7% and 2.6%, respectively, with Caterpillar (NYSE:CAT), JP Morgan (NYSE:JPM) and Intel (NASDAQ:INTC) also plunging at least 2%. All ten S&P 500 industry sectors ended in the red, as the index fell 1.2% to 1,095. Basic material shares led the decliners, off 2.3%; oil and gas and financials 1.6%; technology 1.5%; industrials 1.3%; health care 1.1%; telecommunications 1.0%; utilities 0.9%; consumer services and consumer goods 0.7% were the other decliners. The tech-laden NASDAQ fell 1.3% to 2,213, with 89 of its 100 components ending the day in the red. The Vix "fear factor" index showed activity, rising 7.2% during the session to 21.37. Crude prices fell 1.8%, or $1.45 to $78.85, with gold prices off $9.90 to $1103.20.
This morning, in another move to contain the flow of easy money, China banking regulators told commercial lenders to tighten credit to local governments. Yesterday saw Greece 10-year bond up 7 basis points in yield on another flare-up in rumors of a bond issue.
Bernanke’s testimony on the hill is likely to keep traders focused as talks of unwinding of stimulus measures amid a weak employment situation gain ground. Nonetheless, expectations are the Fed Chairman will brush aside last week's move to increase discount rates as a "normalization" process, not a signal that the fed funds lending rate will be increased sooner than had been anticipated.
The Department of Energy is slated to release weekly crude inventory data, with crude stockpiles estimated up 1.9 million barrels, for the longest period of gains in almost nine months. Toyota (NYSE:TM) testimony, meanwhile continues, and yesterday saw Ford (NYSE:F) shares jumping 3.5% on its rival's issues. And Treasury Secretary Geithner, the other top US policy maker in the spotlight today, takes to the Hill as well, addressing government spending into 2011.
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