Benchmarks retreated from recent highs following
weaker-than-expected factory orders and investor concerns about
the Euro-zone debt crisis. The S&P 500, which has rallying in
2013 slipped into the red following the bearish sentiment in the
market. All ten of the S&P 500 industry groups ended in the
red, among which the biggest loser was the technology sector.
The Dow Jones Industrial Average (DJI) decreased 0.9% to close
the day at 13,880.08. The S&P 500 declined 1.2% to finish
yesterday's trading session at 1,495.71. The tech-laden Nasdaq
Composite Index decreased 1.2% to end at 3,131.17. The fear-gauge
CBOE Volatility Index (VIX) surged 13.7% to settle at 14.67.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 6.3 billion shares, lower
than the daily average of 6.45 billion shares in 2012. Declining
stocks outnumbered the advancers on the NYSE. For 75% stocks that
declined, 22% advanced.
Last week the blue-chip index touched its highest level in
more than five years and closed above the 14,000 mark. The index
was pushed higher by a series of encouraging economic numbers.
Encouraging news was received from non-farm payroll, construction
spending and the US manufacturing sector. The blue-chip index
closed above the 14,000 mark for the tenth time in its history.
However, this rally ended yesterday following discouraging
international news and factory orders numbers.
Meanwhile, factory orders numbers, which was released on
Monday, was below the Street's estimates. According to the U.S.
Department of Commerce, new orders for manufacturing goods
increased 1.8% to $484.8 billion. This was below the consensus
estimate of 1.9%. Excluding transportation, growth in new orders
was 0.2%. Unfilled shipment orders rose marginally, by 0.8% to
$991.7 billion from November numbers. Meanwhile, shipments
increased 0.4% to $484.9 billion from 0.3% in November.
Fresh investor concerns arose about a revival of the European
debt crisis after the yield on Spanish and Italian bonds
increased. Yields on the Spanish and Italian bonds logged their
biggest gains since September. Further disappointing news came
from Spain where the country's Prime Minister Mario Dragi has
been asked to resign, following his alleged involvement in
Questions have been raised on the mortgage bond ratings
provided by Standard & Poor following which the shares of its
parent company The McGraw-Hill Companies, Inc.(NYSE:
) slumped by 13.8%. This is the biggest single-day decline for
the company since the market crash of 1987. The U.S. Department
of Justice is expected to file a civil lawsuit against the credit
Merck & Co., Inc. (NYSE:
) shares declined 2.3% following its fourth-quarter
earnings. The company said its earnings fell and also said
that 2013 may not be a good year. On the other hand, Humana Inc.
) jumped 4.7% after the company's earnings came above the
Street's estimates. According to fresh data from Thomson Reuters
data, S&P 500 earnings may increase by 4.4% in
fourth-quarter. This is above its initial estimates of 1.9% but
well below the October forecast of 9.9%.
All ten of the S&P 500 industry groups had a bad trading
day yesterday. The technology sector was the biggest loser among
the S&P 500 industry groups and the Technology SPDR (XLK)
lost 1.3%. Stocks such as Apple Inc. (NASDAQ:
), Hewlett-Packard Company (NYSE:
), Dell Inc. (NASDAQ:
), Microsoft Corporation (NASDAQ:
) and Avid Technology, Inc. (NASDAQ:
) decreased 2.5%, 1.7%, 2.6%, 1.8% and 3.8%, respectively.
APPLE INC (AAPL): Free Stock Analysis Report
AVID TECH INC (AVID): Free Stock Analysis
DELL INC (DELL): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
HUMANA INC NEW (HUM): Free Stock Analysis
MCGRAW-HILL COS (MHP): Free Stock Analysis
MERCK & CO INC (MRK): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
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