Stocks succumb to a selloff that’s been lurking out there, and comes as little surprise to anyone who’s watched markets rise nearly uninterrupted for almost six full months now.
Heady gains since late August collide with spiking oil prices and building geopolitical unrest to create a potent catalyst for a selloff. Exxon Mobil, Chevron and Kraft the only Dow components to escape declines. Materials, financials, industrials and consumer discretionary the hardest hit sectors.
Bulls have shown a remarkably strong ability lately to rebound from setbacks like this, which will be tomorrow’s test. In addition to what’s likely to be another day of violence and protests in North Africa/Mideast, investors get a chance to react to January existing home sales, and H-P’s disappointing outlook.
DJIA falls 178.46 to 12212.79, and Nasdaq Comp slides 77.53, or 2.7% (equal to about 335 DJIA points) to 2756.42. S&P 500 ends 27.57 lower at 1315.44.
Couple factoids: S&P 500 today saw it’s biggest percent and point drop since August 11; biggest point drop for Nasdaq Comp since June 29, and biggest percent drop since Aug 11. Also the biggest percentage and point drop for Russell 2000 since last August.
We hear consumer confidence hit a three-year high in February, at 70.4, according to the Conference Board. Guess this level looks a lot better coming up out of the basement than it did the last time it was visited in February 2008.
“”There is no evidence that the recent collapse in consumer confidence is going to turn around any time soon,” said Brian Bethune, senior economist at Global Insight, as quoted by the AP back then. Stories note at the time it was the worst confidence reading since the start of the Iraq War in 2003, and excluding that one, worst since 1993. So this level hasn’t been associated with “happy days” in the past.
Look, it’s better than heading lower, but it’s a bit of a stretch to suggest it’s a sign consumers are gearing up to unleash some wave of pent-up spending. Conference Board tries to put the best spin on it, but the overall damp mood can only be spruced up so much. The outfit says “consumers’ appraisal of present-day conditions improved moderately in February.” What’s “moderately” mean? Continue reading…
Posted by Paul Vignaon February 22, 2011 Stocks /
I’ll tell you, it takes this stock market about five minutes to rationalize away any risks. Futures were down sharply this morning, with Dow futures down about 130, as crude prices spiked as the protests in Libya have morphed into what looks like the beginning of a total uprising.
But you can almost see the stock-trader’s mind work its way through this thing, going from panic selling to panic buying; hey, losing Moammar Gadhafi can’t be a bad thing for business, right?
Here’s what John wrote at 7:30 a.m.:
For the first time in a while, US stocks on track for a sharp drop at the open, influenced by selloffs overseas as unrest continues to heat up in the Middle East and North Africa, and oil prices shoot higher. Markets went through a similar drill a few weeks ago when Egyptian protests hit a fever pitch, though you might recall anxiety was quickly curbed. Bulls have maneuvered around every potential roadblock in the past several months, no reason yet to think this time is different. S&P Case/Shiller December home price index due at 9:00am ET; Conference Board’s Feb consumer confidence gauge, Richmond Fed’s Feb business index both set for 10:00am. S&P futures down 16, Dow futures off 92. Ten-year note higher, yield at 3.52%.
Currently, Dow futures are down 73, S&P futures are down about 13.
It still appears like there’s going to be a stock sell-off, the market is overdue for one regardless, but don’t be surprised if this thing looks very different by the closing bell.
The issue for us folks in the U.S. is this: what kind of a spike in crude prices would it take to derail the recovery? How big a spike, and how prolonged? It was the spike in crude prices in the summer of 2008 that gave the economy the final push over the ledge. Once gas prices hit $4 at the pump, you could see the economy grind to a halt.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
Bernie Madoff tells CNNMoney he’s having trouble sleeping. Click here to read more about that from CNN. He doesn’t know how lucky he’s got it, living behind bars in America. In China this week, a 39-year old businesswoman received the death sentence for running a $70 million Ponzi scheme – pocket change next to the […]