The U.S. stock market recorded its biggest loss in weeks on
Tuesday after the Fed's Beige Book report showed that the economy
is expanding only at a modest to moderate rate.
A series of mediocre economic reports and slack growth in
corporate revenue also weighed on sentiment. After the big run-up
in the major averages to start 2013, the market is starting to
look vulnerable to profit-taking as uncertainty is on the
Volatility levels are also rising as traders look to buy
protection in the options market amid signs that the rally may be
coming to an end. The S&P 500 closed Tuesday's session near a
one month low and the bullish mood on Wall Street may fade in the
coming weeks if a deeper correction is on the horizon.
The Dow Jones Industrial Average fell 217 points, or 1.43
percent, to 14,961.
The S&P 500 shed more than 22 points, or 1.38 percent, to
close at 1,609.
The Nasdaq lost almost 44 points, or 1.27 percent, to
ADP Employment Change
According to the ADP Employment report, the economy added
135,000 jobs in May. This compared to 113,000 in the prior month
and consensus expectations calling for a rise of 157,000.
Factory orders rose 1.0 percent in April after declining 4.7
percent in March. This compared to consensus expectations calling
for an increase of 1.6 percent.
Although the manufacturing industry contracted in May, the
services sector continued its expansion. The ISM
Non-manufacturing Index rose to 53.7 in May compared to 53.1 in
April. This came in slightly above consensus expectations calling
for a rise to 53.5.
Crude oil prices were mixed late on Wednesday. At last check,
NYMEX crude futures were up 0.39 percent to $93.67 while Brent
crude contracts had lost 0.30 percent to $102.93. Natural gas was
last trading up 0.13 percent to $4.00.
Precious metals were slightly higher on Tuesday. At last
check, COMEX gold futures were up 0.24 percent to $1,400.60.
Silver contracts had risen 0.23 percent to $22.46. Copper futures
fell 0.15 percent on the session.
In the grains complex, both corn and wheat traded lower. At
last check, corn futures were down a little less than 2 percent
while wheat lost a little more than 1 percent. Movers in soft
commodities included cocoa, which was up a little better than 1
percent and lumber, which added more than 3 percent.
Bond prices jumped on Tuesday as investors moved cash out of
riskier assets. Near the close of equities, the iShares Barclays
20+ Year Treasury Bond ETF (NYSE:
) was up more than 1 percent to $115.05. The rise in prices
pushed yields down on the session.
The 2-Year Note was last yielding 0.29 percent while the
5-Year yield was at 1.02 percent. The 10-Year Note yield, which
has risen 35 basis points over the last month, was at 2.09
percent and the yield on the 30-Year Bond was sitting at 3.25
The U.S. dollar was slightly lower on Tuesday. At last check,
the PowerShares DB US Dollar Index Bullish ETF (NYSE:
), which tracks the performance of the greenback versus a basket
of foreign currencies, was down 0.20 percent to $22.42.
The closely watched EUR/USD pair was last up 0.04 percent to
$1.3086. Other movers included the USD/JPY, which fell 0.86
percent, and the AUD/USD, which lost 1.13 percent.
Volatility and Volume
The VIX jumped more than 7 percent late on Tuesday as the
equity market recorded sharp losses. The widely watched barometer
of market fear was last trading at 17.43.
Volume was heavier than normal as traders and investors
reacted to market losses. Around 193 million SPDR S&P 500 ETF
) shares traded hands compared to a 3-month daily average of just
under 126 million.
Mattress Firm (NASDAQ:
) jumped around 6 percent after the company's first-quarter
Juniper Networks (NASDAQ:
) climbed almost 7 percent heading into the closing bell after
the company's CEO indicated at a technology conference that
Juniper's routing performance has been above average in the
) rose better than 5 percent on Tuesday after the company
announced that it would be expanding its buyback program.
Digital Realty Trust (NYSE:
) climbed better than 5 percent on the session, although the
reason for the move was not immediately clear.
) added around 5 percent on Tuesday after the company's Q4
) fell almost 11 percent on the day as traders took profits in
the stock, which had been up sharply this week.
Shares of Chinese ADR Giant Interactive (NYSE:
) fell around 11 percent after the company announced a share
Ubiquiti Networks (NASDAQ:
) plunged for the second day in a row after a share offering
priced at a 4.4 percent discount. The stock lost almost 10
percent on the session.
Mueller Water Products (NYSE:
) lost almost 9 percent on Tuesday after the stock was downgraded
to a Strong Sell by Zacks.
Nomura Holdings (NYSE:
) lost around 7 percent on Tuesday, possibly as a result of the
strong up-move in the Japanese Yen.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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