Closing Update: Stocks, Commodities All Slide in Market Retreat; Fed Minutes Show Rising Dischord
Stocks fell Wednesday, with losses accelerating after minutes from the latest Federal Open Market Committee rate-setting meeting suggested the central bank may have to slow or stop buying assets before seeing a pickup in hiring.
The Nasdaq Composite Index slid more than 1%, with smaller losses for the Dow Industrial Average and the S&P 500. All 10 industry sectors in the S&P 500 lost ground, with the steepest declines for mining and energy stocks following reports a commodity-oriented hedge fund was forced to sell today, resulting in sharp price drops.
Minutes of the FOMC last month showed policy makers were divided about the strategy behind Chairman Ben S. Bernanke's program of buying bonds until there is "substantial" improvement in a U.S. labor market. Some members on the panel said an earlier end to purchases might be needed while others warned against a premature withdrawal of stimulus. Several policy makers said the central bank should be ready to vary the pace of their $85 billion in monthly bond purchases.
Today's market again saw a new batch of mergers and acquisitions, with Office Max ( OMX ) and Office Depot ( ODP ) agreed to combine in $1.2 bln stock swap. But trader response to the deal was somewhat muted, with shares of both companies ending lower - in part, due to a botched official announcement of the deal. OMX shares also were pressured from its Q4 results trailing year-ago comparisons despite matching analyst forecasts for the period.
Commodities slumped amid talk a large hedge fund was forced to liquidate its holdings ahead of the expiration of the March futures contracts today. Media outlets could not identify the firm but the talk was enough to take a 2% bite out of gold futures and shave more than 3% from silver futures. Crude oil fell over $2, settling at $94.63 a barrel, the first time crude has closed under $95 since mid-January.
Nanex, which supplies real-time data services, reported that the April crude-oil futures contract was hit with over 2,500 contracts within two seconds Wednesday morning, sending oil prices sharply lower. The weekly oil-inventory numbers from the American Petroleum Institute are due out later this afternoon with the more closely watched U.S. Energy Information Administration report coming out tomorrow. Both reports were delayed due to Monday's holiday and are expected to show a build in crude inventories.
There was a pair of economic reports this morning although neither appeared to have a significant impact on market direction. U.S. housing starts fell more than expected in January to an 890,000 pace, compared to consensus expectations anticipating 920,000 housing starts. Also, the Producer Price Index for finished goods rose 0.2% in January following a 0.3% decline in December and 0.4% in November. The index for finished goods less foods and energy rose 0.2% in January.
Here's where the U.S. markets stood at end of day:
Dow Jones Industrial Average Down 0.77% to 13,927.54
S&P 500 Down 1.24% to 1,511.95
Nasdaq Composite Index Down 1.53% to 3,164.41
Hang Seng Index up 0.70%
Shanghai China Composite Index up 0.59%
FTSE 100 Index up 0.09%
(+) NVGN, Extends big advance from Tuesday's session, which followed a study showing its experimental cancer drug CS-6 was highly active against ovarian cancer stem cells.
(+) NTSP, Receives $16-a-share buyout offer last night from Total System Services ( TSS ). The $1.4 bln all-cash deal also pushed Green Dot ( GDOT ) shares higher, rekindling hopes the prepaid-debit-card provider also may be a takeover candidate.
(+) CRTX, Majority shareholder offers to buy the 40% of shares it doesn't already own for between $6.40 to $6.70 each and taking the drug-maker private.
(+) LZB, Posts 18% jump in Q3 earnings to $0.32 per share, beating analyst expectations by $0.09 as its retail segment swung back to profitability. Net sales rose 10.3% to $349.1 mln, also above estimates.
(+) MDRX, Non-GAAP Q4 revenue falls 5.4% from year-ago levels to $368 mln but still beats analyst projections by $1 mln. Adjusted EPS of $0.16 trails the Street view by $0.05 per share.
(-) HNR, Pulls plug on proposed $725-mln sale of its hydrocarbon assets in Venezuela to PT Pertamina after the Indonesian government - the sole shareholder of PT Pertamina - voted against the deal.
(-) MM, Q4 revenue of $58 mln trails analyst consensus by $4.8 mln. Guides Q1 sales below Street view. Also, acquires privately held mobile media buying and targeting platform for undisclosed sum. Morgan Stanley downgrade to Equal Weight.
(-) ANID, Adjusted Q4 net loss widens to $0.20 per share, missing the Street consensus by a penny. Withholds future guidance. Analysts are expecting another $0.20 loss in Q1 and a $0.56 a share loss for FY13.
(-) ONCY, Prices 7 mln-share offering at $4 apiece.
(-) PVR, Q4 GAAP loss of $0.30 per share trails analyst forecasts looking for $0.14 profit. Revenue declines 6.3% to $269.6 mln, also lagging the Street consensus by about $10.59 mln.