The stock market fell sharply on Monday as the EUR/USD pair
plunged on renewed concerns over Europe.
Spanish bond yields rose after Prime Minister Mariano Rajoy
faced calls to resign amid a corruption scandal. The uncertainty
in Spain, along with a surging Silvio Berlusconi in Italian
polls, left some investors concerned over potential political
turmoil in Europe which could destabilize the regions fiscal
All of the major averages recorded losses on the session, led
by the Nasdaq Composite. Prior to Monday's sell-off, the markets
had been moving strongly higher to start the year.
The Dow Jones Industrial Average fell around 130 points, or
0.93 percent, to close at 13,880.
The S&P 500 lost more than 17 points, or 1.15 percent, to
finish at 1,496.
The Nasdaq Composite registered a decline of 48 points, or
1.51 percent, to 3,131.
The Dow Jones Industrial Average
Factory orders for December rose 1.8 percent compared to a
decline of 0.3 percent in November. While the number was an
improvement, it came in below forecasts calling for a rise of
Most of the gains were attributable to transportation orders,
namely aircraft orders. Transportation orders were up 11.7
percent and aircraft orders rose 23.3 percent.
Crude oil was trading lower late in the day along with the
stock market. At last check, NYMEX crude futures, the U.S.
benchmark, had lost around 1.50 percent and were trading at
$96.29. Brent crude futures were last down around one percent to
$115.64. Natural gas futures had risen better than 0.60 percent
Precious metals were mixed on the session. COMEX gold futures
were last up around 0.28 percent to $1,675. Silver had lost
around 0.70 percent and was trading at $31.74. Copper was down
less than 0.50 percent on the day.
Both corn and wheat recorded slight losses on the session
while soybeans and soybean meal were both up 1 percent or better.
Most contracts were down in soft commodities, including a more
than two percent loss for coffee and a 1.50 percent loss for
Late in the day, the iShares Barclays 20+ Year Treasury Bond
) had surged over 1.30 percent to $117.06 as stocks sold off.
Yields were pushed lower as investors snapped up bonds. The
yield on the 2-Year Note fell one basis point to 0.25 percent
while the 5-Year lost four basis points to 0.84 percent.
The yields on the 10-Year Note and 30-Year Bond fell five
basis points to 1.97 percent and 3.17 percent, respectively.
Late in the day the PowerShares DB US Dollar Index Bullish ETF
), which tracks the performance of the greenback versus a basket
of foreign currencies, had climbed 0.51 percent to $21.71 on the
back of a weaker euro.
The major story on the day was a sharp fall in the EUR/USD
pair. At last check, the EUR/USD had lost more than one percent
to 1.3519. Most other currencies were relatively stable. The
USD/JPY, which has been very active lost 0.38 percent.
Volatility and Volume
The VIX got a big pop on Monday as the markets saw the first
sign of volatility in weeks. The VIX closed the day up almost 13
percent to 14.54.
With stocks falling on the session, volume was slightly higher
than it has been, but still below three-month trends. Around 118
million SPDR S&P 500 ETF (NYSE:
) shares traded hands compared to a 3-month daily average of just
under 138 million.
) shares plunged around 13 percent intra-day after the Department
of Justice said that it intends to sue the company's Standard
& Poor's division over its ratings of certain CDOs in
Rival Moody's (NYSE:
) was also down sharply on the news. Late in the day, the stock
had lost almost 11 percent and was trading at $49.44.
Shares of Viad Corp. (NYSE:
) fell more than 10 percent after the company's fiscal
fourth-quarter earnings results.
Acme Packet (NASDAQ:
) jumped almost 24 percent after the company agreed to be
acquired by Oracle (NASDAQ:
). The per-share cash price of $29.25 under the terms of the deal
was a 22 percent premium to APKT's Friday closing price.
The deal also triggered a jump in other networking names such
as BroadSoft (NASDAQ:
), which was up more than 10 percent, and Sonus Networks (NASDAQ:
), which added 20 percent.
Mercury General (NYSE:
) rose more than six percent after better than expected
Royal Caribbean Cruises (NYSE:
) fell a little more than three percent after the company swung
to a loss in the fourth-quarter.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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