Dow Jones Newswire Quote: US Stocks Fall, On Pace For Second-Straight Weekly Drop

By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks tumbled Friday, putting the market on pace for its second-straight weekly drop, as investors fretted over the potential impact of oil’s climb above $100 a barrel.
The Dow Jones Industrial Average fell 139 points, or 1.1%, to 12119. All 30 of the measure’s components were in the red. DuPont led the decline with a 2.4% drop, while General Electric shed 2.3% and Hewlett-Packard lost 2.1%.
The Nasdaq Composite declined 0.8% to 2777. The Standard & Poor’s 500-stock index fell 1.1% to 1317, with all its sectors in negative territory.
The day’s declines put the market into negative territory for the week, with the Dow recently down 0.3% on the week. If the measure closes lower on the week, it would mark its second-straight weekly drop and its first time posting back-to-back weekly declines since August.
The slump came as crude-oil futures trade near $104 a barrel after Libya’s capital saw sporadic violence during antigovernment protests, as a heavy clamp-down on the city by Col. Moammar Gadhafi spread fear among residents.
Meanwhile, more than 100,000 protesters gathered in the Bahraini capital for the largest demonstration since protests erupted in the Sunni-ruled kingdom almost three weeks ago, escalating pressure on the ruling Al-Khalifa family to accept sweeping political reforms. And Yemeni soldiers fired rockets on protesters in the restive northern province of Amran, killing three people and injuring seven others, according to a Shia rebel spokesperson.
The escalating violence added to investors’ worries as they kept an eye on rising energy prices.
“The problem with higher oil prices is that it acts as an indirect tax on consumers and businesses,” said Adam Sarhan, chief executive of Sarhan Capital. He noted that the rise in oil prices comes as investors are also beginning to wonder how the economy will perform after the Federal Reserve winds down its stimulus program in June.
Sarhan added, “What we’re seeing now is a confluence of two factors: Can the economy continue growing without the Fed’s help, and how will the economy continue to grow if oil spikes higher?”
Investors were uninspired by government data showing nonfarm payrolls rose by 192,000 last month, missing expectations for a rise of 200,000.
However, the unemployment rate, which is obtained from a separate household survey, fell to 8.9% last month, the first time it has slipped below 9% since April 2009. It improved on expectations for the jobless rate rising to 9.1% from January’s 9%.
The data also showed average hourly earnings of all employees increased by a penny to $22.87.
Some said the mixed report might actually be positive for the market with regard to how the Federal Reserve might react.
“This is the best of all worlds,” Jim McDonald, chief investment strategist at Northern Trust said. “Having moderate, sustained job growth will allow the Fed to reduce the stimulus and liquidity programs at a deliberate pace,” whereas job growth in the 400,000 range at this point in the recovery would likely push the Federal Reserve off the sidelines, he said.
The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, slipped 0.1%. Treasurys rose, pushing the yield on the 10-year note down to 3.49%. Gold futures rose.
Among stocks in focus, Marvell Technology tumbled 9.8%. The chip maker’s fiscal fourth-quarter earnings rose 8.8%, but came in at the low end of the company’s projections, and it forecast disappointing first-quarter results on weakness in the mobile and wireless markets.
Citigroup slipped 3.1%, and Goldman Sachs Group shed 2.2%, after Bank of America Merrill Lynch downgraded its investment ratings on the stocks to “neutral” from “buy.” The firm cited expected weakness in first-quarter results from the two banks.

Sarhan In The Media: (Market Watch) US Stocks Tumble As Investors Flee To Safety; DJIA Off 242

June 29, 2010, 2:36 p.m. EDT
By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks tumbled Tuesday as a drop in U.S. consumer confidence added to mounting worries of how a slowdown in China and debt problems in Europe may affect global growth.
Investors fled to safety assets, sending the dollar, gold and Treasurys higher. The rise in Treasurys sent the yield on the 10-year note below 3%, to its lowest level in more than a year. Bond yields move inversely to prices.
The Dow Jones Industrial Average was below 10000, sinking 242 points, or 2.4%, to 9896 in recent trading. All of the measure’s 30 components were in the red. Among its hardest-hit, Boeing dropped 5.4%, Alcoa slid 5.1% and American Express fell 4.5%.
The Standard & Poor’s 500 index fell 2.7% to 1045, its lowest intraday level since May 25. The index was also on track to finish below its lowest close of 2010 of 1050.47 on June 7. All of the measure’s sectors were negative, led by declines in the industrials, technology and financial sectors. Consumer-staples and health-care stocks, which are considered safety sector, posted the smallest declines.
The Nasdaq Composite slid 3.2% to 2150, stung by a 4.1% drop in Apple, a 3.6% slide in Microsoft and a 5.7% decline in
The selloff came as a sharp drop in U.S. consumer confidence added to the market’s worries after the Conference Board sharply revised lower its April leading economic indicator for China, raising fears that a key driver of the global economy could slow.
This was a one-two smack for the market and you really just have a huge rush away from risk,” said Adam Sarhan, chief executive of Sarhan Capital. “It’s a concern of whether this global economic recovery will continue or if it will be derailed due to a slowdown in China or the ongoing European debt crisis.
Also weighing, investors are fretting over how European banks will fare after the end of the European Central Bank’s 12-month liquidity facility on Thursday.
The question is whether these banks in Europe can withstand these massive repayments,” Sarhan said.
The euro was recently trading at $1.2199, down from $1.2274 late Monday in New York. The U.S. Dollar Index, which tracks the U.S. currency against a basket of six others, jumped 0.5%.
Investors said there was renewed concern that China’s demand for materials and commodities could sink if its economy cools. Crude-oil prices tumbled more than 3% on Tuesday, falling below $76 a barrel.
New data on the U.S. housing market did little to encourage investors. The S&P/Case-Shiller home-prices indexes improved slightly in April over the previous month, mostly thanks to the demand for homes ahead of the expiration of the federal tax credit.
The latest readings come on the heels of disappointing data last week on home-sales activity, including both new and existing units. Traders are particularly interested in the housing market as a harbinger of possible recovery or struggle in the U.S. economy, since the sector’s meltdown was a key catalyst in causing the recent recession.
Among stocks in focus, Micron Technology lost 12%. The chip maker late Monday reported stronger-than-forecast earnings and sales but also projected flat shipments in a key segment.
American depositary shares of Baidu fell 7.1% as Google said it would change the way it operates in China as it seeks to renew a license. Google fell 2.8%.
Barnes & Noble’s fiscal fourth-quarter loss widened despite stronger-than-expected sales, as the world’s biggest brick-and-mortar bookseller gave a weak outlook. Shares skidded 15%.
Full Story:

Dow Jones Newswire Quote: US Stocks Trade Below 200-Day Averages, In Line For Correction

US Stocks Trade Below 200-Day Averages, In Line For Correction
By Donna Kardos
NEW YORK (MarketWatch) — U.S. stocks tumbled Thursday as investors’ fears over euro-zone debt grew, pushing key market measures below their 200-day moving averages and on pace for technical corrections. The broad retreat came on mounting worries over Europe’s will to address its debt woes as unions went on strike in Greece and investors fretted that new trading regulations in Germany could spread. In the U.S., stocks linked to commodities and smaller companies bore the brunt of the selling.
“Fear is elevating at this point,” said Adam Sarhan, chief executive of Sarhan Capital. “A lot of people are concerned, if the European Union stepped up and gave $1 trillion, and it wasn’t enough, how much is?”
The Dow Jones Industrial Average was down 258 points, or 2.5%, to 10184, in recent trading, while the Standard & Poor’s 500 index dropped 31 points, or 2.8%, to 1085. The selling intensified after the measures broke below their 200-day moving averages, at 10258 and 1102, respectively. “The fact that they broke below them today after finding support there two weeks ago after the ‘flash crash’ suggests the bears are getting stronger,” Sarhan said.
In addition, 1100 was a key psychological level for the S&P 500, and traders said the drop below it fueled more selling.  The S&P 500 was also on pace to post a correction of 10% from its 2010 high last month, along with the Nasdaq Composite, which was recently down 73 points, or 3.2%, at 2225. If the S&P 500 remains below 1096 through the close, and the Nasdaq is still below 2278 by the end of the session, the measures will be down more than 10% from their 52-week closing highs reached in late April.
The industrial, energy and materials sectors were getting hit the hardest Thursday, in what Sarhan described as a broad move “away from the pro-growth story.” The Dow’s leading decliners included Alcoa, which dropped 2.8%, Caterpillar, which fell 2.5%, and Boeing, which slid 4.4%. Reflecting the market’s heightened unease, the CBOE Market Volatility Index jumped to its highest point since April 2009, gaining 24% to reach an intraday high above 43.
Thursday’s U.S. economic data only added to the worries about the economy. In a troubling sign for the labor market, the Labor Department said Thursday that initial claims for jobless benefits rose by 25,000 to 471,000 in the week ended May 15. Economists had predicted claims would fall by 4,000. In addition, the Conference Board’s index of leading economic indicators fell in April for the first time since March 2009. “Now we’re starting to see a little bit of a change in the tenor of these economic figures,” Sarhan said. “If the U.S. is going to begin to slow down after such a strong rally, and Europe is slowing down, that begs the question who’s going to help us?
The euro fell to $1.2347 from $1.2391 late Wednesday and the cost of insuring European corporate bonds against default rose sharply following comments by Jean-Claude Juncker, chairman of the Eurogroup forum of euro-zone finance ministers. He played down speculation that the authorities would intervene to arrest the euro’s decline, saying he doesn’t believe there is any need for immediate action. Rumors of possible intervention had prompted the euro to bounce off four-year lows Wednesday.
The euro was also weighed down by uncertainty over whether other euro-zone countries would follow Germany’s ban on naked short sales of certain investments. The European Commission, the European Union’s executive arm, suggested Germany acted peremptorily on an issue that would be discussed by all EU finance ministers on Friday.
Markets are also awaiting a crucial vote Friday in the German parliament over its contribution to the European Union/International Monetary Fund rescue package. The U.S. Dollar Index, reflecting the U.S. currency against a basket of six others, rose 0.1%. Treasurys also advanced, pushing the yield on the 10-year note down to 3.24%. Crude-oil futures fell, as did gold futures. 
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