Tags: US | Wall | Street

Stocks Falter in Last Hour; Trader Anxiety Sets in

Monday, 14 Jun 2010 07:10 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Stocks faltered in the last hour of trading Monday after investors gave in to anxiety about Europe's economy.

The Dow Jones industrial average erased an early gain of 118 points to end down 20. The Standard & Poor's 500 also fell slightly, while the Nasdaq composite rose less than a point.

Stocks began the day higher following a report that industrial production in the 16 countries that use the euro grew more than expected in April. That boosted confidence that Europe could solve its debt problems and pushed the euro above $1.22 for the first time since June 4.

Investors have been concerned that government spending cuts aimed at slashing debt would hurt Europe and slow a global recovery. However, there have been few signs so far that the budget cuts needed to contain rising debt in countries like Greece, Spain and Portugal have slowed economies around the world.

Greece is still enough of a concern that bad news about the country's well-known problems was enough to help take down the market's advance. Traders at first shrugged off news that credit rating agency Moody's lowered its rating on Greece's debt to "junk" status. But in the final hour, many traders apparently decided the safest move was to take money out of the market. They were particularly uneasy after the Dow had risen 312 points in the prior two days.

The downgrade of Greece's debt wasn't the first and analysts said the market's response signals that traders are still jittery about Europe.

"When you have ratings downgrades, it's the proverbial fire truck arriving at the barn after it has burned down," said Kent Engelke, chief economic strategist at Capitol Securities Management in Glen Allen, Va. "Ultimately, economic activity will trump these other fears facing the market."

Bank stocks fell on concerns about European debt and about a financial overhaul bill in Congress. Some traders are worried that the merged version of the House and Senate bills will be tougher on banks than analysts had anticipated. Tighter restrictions could cut into profits. JPMorgan Chase & Co. fell 2 percent, while Goldman Sachs Group Inc. lost 1.6 percent.

The early advance came on light trading volume. That left the market vulnerable because many traders want to see more investors buying in as a sign of growing confidence.

Dan Wantrobski, director of technical research at Janney Montgomery Scott in Philadelphia, expects the markets to be choppy for some time. He warned that the back-and-forth trading could push skittish investors from the market and raise the chances that the market slides again this summer.

"The longer we wait here in this kind of purgatory, the more the likelihood we can break through," he said, referring to another drop in the markets. He wouldn't be surprised to see the Standard & Poor's 500 index fall to the 950-1,000 level this summer. That's a drop of about 8 percent to 13 percent.

The Dow fell 20.18, or 0.2 percent, to 10,190.89. The Dow hasn't risen three straight days since April.

The S&P 500 index fell 1.97, or 0.2 percent, to 1,089.63, while the Nasdaq composite index rose 0.36, or less than 0.1 percent, to 2,243.96.

Winning stocks outpaced losers by 3 to 2 on the New York Stock Exchange. Consolidated volume rose to 4.5 billion shares from 4.1 billion Friday.

The market is coming off its best week since mid-February. The Dow rose 2.8 percent last week to end a three-week losing streak. The gains didn't come from a steady climb, however. Stocks routinely sold off or rallied during the final hours of trading each day.

Bond prices fell Monday but pulled off their lows after stocks began to slide and investors once again went in search of safer investments. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.26 percent from 3.24 percent Friday.

Crude oil rose $1.34 to $75.12 per barrel on the New York Mercantile Exchange. Gold fell.

JPMorgan fell 76 cents, or 2 percent, to $37.33, while Goldman fell $2.20, or 1.6 percent, to $133.44.

Shares of BP PLC and Transocean Ltd. fell because of the fallout from the Gulf of Mexico oil spill. BP dropped $3.30, or 9.7 percent, to $30.67 on concerns that the company will suspend its dividend to ease political pressure it is facing in the U.S. Transocean Ltd., owner of the rig that exploded and set off the leak, fell $2.07, or 4.4 percent, to $44.78.

The Russell 2000 index of smaller companies rose 3.27, or 0.5 percent, to 652.27.

Britain's FTSE 100 rose 0.7 percent, Germany's DAX index gained 1.3 percent, and France's CAC-40 rose 2 percent. Japan's Nikkei stock average rose 1.8 percent.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

US Targets Al Shabab Leader in Somalia Airstrikes

Tuesday, 02 Sep 2014 05:31 AM

U.S. military forces attacked the extremist al-Shabab network in Somalia Monday, the Pentagon said, and a witness descri . . .

Sen. Mark Udall: 'I Absolutely Stand By' Call for CIA's Brennan to Resign

Monday, 01 Sep 2014 21:58 PM

Central Intelligence Agency Director John Brennan may have avoided losing his job over charges that the CIA spied on Sen . . .

US Forces Carry Out Operation Against Al-Shabaab in Somalia

Monday, 01 Sep 2014 20:44 PM

U.S. military forces carried out an operation on Monday against al Shabaab militants in Somalia, a U.S. Department of De . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved