The U.S. stock market traded lower on Monday morning as
investors took profits following the World Bank's move to cut its
growth forecasts for East Asia. Earnings season is approaching
and concerns over Chinese growth are causing investors to show
caution to start the week.
The tech heavy PowerShares QQQ Trust ETF (NASDAQ:
), which tracks the performance of the Nasdaq 100, had shed 0.90
percent to $68.38. The heavily traded ETF has notched a gain of
more than 22 percent in 2012 as risk appetite continues to be
strong in U.S. equities approaching the upcoming Presidential
The concerns over Asian growth can be seen most notably in
copper prices on Monday, as futures were trading down around 1.4
percent to $3.7245. Silver futures were last down 1.63 percent to
$34.01. Gold had lost around 0.28 percent to $1,775.80. Both gold
and silver traded down sharply on Sunday evening, before bouncing
back overnight. The weakness in risk assets can also be seen in
crude oil, which was trading down 0.80 percent to just above
As the stock market falls, money has been moving into U.S.
Treasury bonds, with the iShares Barclays 20+ Year Treasury Bond
) as it climbed about 0.50 percent to near $121.85. Caution is
also lending some support to the U.S. dollar, as dollar Index
futures have registered a gain of 0.27 percent. The closely
watched EUR/USD pair was last trading down 0.52 percent to
$1.2964. Traders will want to watch this currency pair closely
this week, as a break of $1.30 to the upside should be supportive
of risk assets.
Notable stocks on Monday include Netflix (NASDAQ:
) and CarMax (NYSE:
). CarMax shares are around 9 percent higher to $31.90 after ITG
Investment Research said that revenue growth is accelerating at
the used-car superstore. Netflix has climbed better than 10
percent to $73.28 after the stock was upgraded to Overweight at
Morgan Stanley (NYSE:
The analyst Scott Devitt said that the company is not under
direct pressure from Amazon.com's (NASDAQ:
) Prime streaming video service. "Previously, we were very
concerned about Amazon.com's Prime Instant Video offering,"
Devitt said. "Prime Instant Video is all about value investing --
finding good content at low prices and offering more incentive
for consumers to buy a Kindle Fire."
He added that Netflix's domestic business alone is "enough to
support the stock at current levels." The rally in NFLX on Monday
adds to previous gains in the stock which was one of the biggest
market winners last week. Over the last 5 days, shares have risen
around 31 percent.
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