US stocks tumble in a harried session, driven by fear over the continuing crisis at Japan’s Fukushima Daiichi nuclear power plant, as a small band of engineers races to avoid a catastrophe. The situation in Japan is still chaotic, and it’s clearly having an effect on investors.
Indexes went into a tailspin late in the morning after the EU’s energy commissioner suggested the situation at Fukushima Daiichi was out of control; the rebounded somewhat after Tokyo Electric, which runs the plant, appeared close to hooking up a new power supply that could run the pumps that provide water to cool the nuclear fuel.
Nikkei futures were down sharply, but also recovered some ground.
At the close, DJIA loses 242 (2%) to 11613, falling as much as 300 points intraday, S&P 500 slides 25 (2%) to 1257, Nasdaq Comp tumbles 51 (1.9%) to 2617. NYSE volume is heavy. Nasdaq, S&P now down for the year; Dow is close. Dow’s now down bit more than 6% from February highs.
For the Dow, it was the biggest drop since Aug. 11; the index has lost 431 points, or 3.6%, the last three sessions, and is down seven of the last nine sessions. All 30 of the index’s components fell today.
All ten of the S&P 500′s sectors fall, with tech and industrials falling the most. Materials and financials are close by. Tech’s fall was amplified by Apple, which got a rare downgrade, from JMP Securities, albeit to only neutral. Still, it was the first downgrade on the stock since October.
A lot of focus was on the Japanese yen, which hit a record high against the dollar as money continues to flow into the currency. Whether that money is for repatriation, or just speculators, isn’t completely known.
To say the stock market is jittery is an understatement. We watched the Dow drop about 100 points in a matter of minutes after those headlines from the EU’s energy commissioner. But keep in mind that, technically speaking, despite all the fear, this is still a minor moderate correction. The only problem for the bulls is that it still plenty of room to run, and a stream of dire news feeding it.
Dow Jones Newswires’ columnist Tomi Kilgore penned the following two missives this morning:
While there’s still nothing technical to suggest the current weakness is anything more than a short-term pullback, there’s also no indication that it is about to end. Bottoms are usually characterized by higher intraday lows rather than positive closes, and today’s low in the S&P 500 (1260.79) was below yesterday’s (1261.12). The lowest intraday lows at the market bottoms in March 2009 (667) and July 2010 (1011) were hit the day before the lowest closes (677 and 1023, respectively). Basically, as long as bears can make downside progress on an intraday basis, they have no reason to turn bullish.
And consider this…
The DJIA’s recent ability to bounce sharply off its intraday lows may seem encouraging for bulls, but it’s not really paying off even for those lucky enough to buy at those lows. In the previous three trading sessions, the DJIA has closed more than 100 points above the respective intraday lows. Today, the DJIA is down 109 at 11746, or 85 points above the low (11661). Despite the intraday resilience, the DJIA has lost a total of 239 points in four sessions, and is now 151 points below Monday’s low (11897). Basically, the “buy on dips” strategy isn’t working for anyone but day traders.
Posted by Paul Vignaon March 16, 2011 Markets /
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As if to illustrate our post this morning, and to illustrate just how jittery the market is, and to painfully illustrate just how dangerous the situation in Japan is still, the news late this morning out of Europe, regarding the nuclear crisis in Japan, drove every asset into an immediate nosedive (or in the case of the safe havens, a sharp spike higher.)
The latest news roiling the markets is about Japan, but it isn’t actually coming from Japan. Rather, the EU’s commissioner for energy, Guenther Oettinger, told a European Parliament committee “the site is effectively out of control.” This reiterated the same comments reported in two UK papers, the Telegraph and Daily Mail.
Look at the pictures in the Mail’s story; I have a more comprehensive grasp of just how bad the damage is after seeing them. They are sobering. There have been reports that those 50 people who’ve been — heroically — trying to save the plant had to be evacuated temporarily, and you wonder how long they can stay there.
The Dow dropped as much as 190 points in a matter of minutes. It bounced back to about down just 100, and is currently down around 170. All this underscores the fact that the market is a rough place to be right now, especially if you’ve been hooked by the Street’s usual sunny pronouncements.
Posted by Paul Vignaon March 16, 2011 Markets /
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We taped this before the headlines hit the wire from the EU’s energy commissioner, reporting on his comments that Japan’s nuclear crisis is out of control. Keep in mind that this is a man who’s half a world away from Japan making the comment, but still it sparked a mad dash across the markets.
On today’s Markets Hub, though, we focused on this morning’s housing and prices data, which weren’t exactly anything to write home about, mind you.
Well, it looks like Barton Biggs was right, for right now.
Biggs got a lot of publicity after declaring that the sell-off in Japanese stocks was overdone, and he’d be buying. Not sure if he meant he’d be buying right now –you’d think a savvy guy like him would’ve squared his positions before opening his mouth — but the Nikkei shot back up overnight, gaining almost 6%. This is being treated in most quarters as a near-revelation, and given the dire state of the news coming out of Japan, it can be forgiven if people seize upon some scrap of good news.
Food and gas supplies are rapidly running out in parts of Japan, leaving people not only in the earthquake-stricken northeast but also in Tokyo scrambling to grab what’s left on the emptying shelves at groceries and convenience stores.
Chief Cabinet Secretary Yukio Edano reported that supplies are being depleted not only in the evacuation zone around the Fukushima Daiichi nuclear-power complex but also in neighboring areas including Iwaki, a city on the northeastern coast.
There is going to be a lot of confusion in the days and weeks ahead, even months, and while guys like Biggs can afford to ride out almost anything, but mere mortals need to tread more carefully. The volatility, the swings in the market, have been head-spinning lately. The Dow appeared on the verge of collapse yesterday, then rebounded, posting only a moderate fall.
Posted by Kevin Kingsburyon March 16, 2011 Markets /
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Some normalization could be at hand after the broad-based sell-off Tuesday in many assets amid ongoing worries about the Japan disaster’s impacts.
The Nikkei recouped half of Tuesday’s 11% dive overnight, gaining about 6%, while other Asian markets also rose. Europe lower, and S&P 500 futures are down 1.4 points. Dow futures are just 10; they were up earlier, then down about 30, so not much conviction there either way.
Oil and agricultural commodities are pointed higher after receiving heavy losses yesterday; Nymex crude is up $1.92 to $99.11. The currency markets are quieter as well, with the euro again backing away from $1.40 amid another downgrade–this time Moody’s on Portugal–while the yen continued to climb versus the dollar, sitting below Y81.
Ten-year yield edges down to 3.30% with PPI due at 8:30 a.m. EDT.
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 […]
The bridge that collapsed on Interstate 5 bridge over the Skagit River in Washington was listed as “functionally obsolete” and “fracture critical,” which means the whole sha-bang could come tumbling down if one major part fails. Click here to read the details from USAToday. This sort of thing shouldn’t be happening in a modern, developed nation. Barry LePatn […]
