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MARKET SNAPSHOT: Stocks Resume Slide In Afternoon Trade
By Peter McKay
Stocks' recent slide resumed Tuesday as investors fretted about U.S. consumer spending and a possible clampdown on bank lending in China.
The Dow Jones Industrial Average (DJI) recently slipped 38 points, or 0.4%, to 10,412.78. The measure has fallen in three of the past four full trading sessions, including a 133-point surge in Monday's session.
As has been the case on most recent down days for the market, investors on Tuesday haveshied from risky bets while favoring safe havens. That has meant unloading stocks in the financial, technology and basic-materials sectors, which have led gains of nearly 60% in major averages since they hit bear-market lows in March.
Traders are also beginning to focus on the key holiday shopping season, a make-or-break period for many U.S. retailers. Tuesday's economic releases sent mixed signals about how the period is shaping up.
"Everything we've seen suggests that the consumer hasn't been taken entirely out of this economy," said Steve Condon, managing director at the portfolio-management firm Truepoint Capital, which has been keeping its clients' stock exposure steady for now.
Mr. Condon said that go-slow approach reflects his firm's skepticism that the market can sustain the momentum it's shown since spring. But, regarding the shopping season in particular, he added: "We're cautiously optimistic."
The Commerce Department lowered its estimates of third-quarter gross domestic product and consumer spending. But other reports were more promising.
The S&P Case-Shiller home-prices indexes showed a fifth monthly increase in U.S. home prices in September and a sequential rise in home prices in the third quarter. The Conference Board's monthly reading of consumer sentiment rose more than analysts were expecting.
Before the opening bell in New York, investors were also spooked by a warning from China's main banking regulator, which told the nation's lenders to strictly comply with capital requirements or face sanctions. The tough statement indicates Beijing is ready to more actively tighten the credit growth that has been the linchpin of China's economic recovery, fueling fears about the potential fallout on the U.S. from any slowdown in China.
"If they have capital constraints, their lending might slow, which is part of the growth engine over there, and part of ourrecovery is really dependent on the global story with growth out of Asia," said Maury Fertig, chief investment officer at Relative Value Partners. "China is where a lot of demand is coming from, so any kind of slowing there will ultimately have some kind of impact."
The Standard & Poor's 500 (SPX) was recently off 0.2%, led by a 0.7% decline in its financial sector. The Nasdaq Composite Index (RIXF) was down 0.6%. The small-stock Russell 2000 (RUT) was down 0.8%.
Crude-oil futures also declined, recently trading below $76 a barrel and hurting energy companies such as Murphy Oil Corp. (MUR), Rowan Cos. (RDC) and Cabot Oil & Gas Corp. (COG).
Among stocks in focus, Medtronic Inc. (MDT) jumped 5.3% after reporting that its fiscal second-quarter earnings soared 59%, beating analyst estimates, amid prior-year charges and as the company saw sales increase, especially in its heart-related businesses. The medical-devices maker also raised its fiscal-year earnings guidance. .
Barnes & Noble Inc. (BKS) fell 6.5% as its fiscal second-quarter loss widened and the bookseller slashed its earnings forecast for the year. It warned that due to "overwhelming" demand, it would have to ramp up production for its not-yet-released e-reader, which will mean higher costs.
Still to come Tuesday are the minutes from the last Federal Reserve interest-rate-setting meeting, due at 2 p.m. EST.
The dollar and Treasury prices were little changed. The 10-year note was up 2/32 to yield 3.347%.
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=N%2Bx7ar2RUJ5nP%2BaDNzlJwA%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
November 24, 2009 13:26 ET (18:26 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.
Stocks' recent slide resumed Tuesday as investors fretted about U.S. consumer spending and a possible clampdown on bank lending in China.
The Dow Jones Industrial Average (DJI) recently slipped 38 points, or 0.4%, to 10,412.78. The measure has fallen in three of the past four full trading sessions, including a 133-point surge in Monday's session.
As has been the case on most recent down days for the market, investors on Tuesday haveshied from risky bets while favoring safe havens. That has meant unloading stocks in the financial, technology and basic-materials sectors, which have led gains of nearly 60% in major averages since they hit bear-market lows in March.
Traders are also beginning to focus on the key holiday shopping season, a make-or-break period for many U.S. retailers. Tuesday's economic releases sent mixed signals about how the period is shaping up.
"Everything we've seen suggests that the consumer hasn't been taken entirely out of this economy," said Steve Condon, managing director at the portfolio-management firm Truepoint Capital, which has been keeping its clients' stock exposure steady for now.
Mr. Condon said that go-slow approach reflects his firm's skepticism that the market can sustain the momentum it's shown since spring. But, regarding the shopping season in particular, he added: "We're cautiously optimistic."
The Commerce Department lowered its estimates of third-quarter gross domestic product and consumer spending. But other reports were more promising.
The S&P Case-Shiller home-prices indexes showed a fifth monthly increase in U.S. home prices in September and a sequential rise in home prices in the third quarter. The Conference Board's monthly reading of consumer sentiment rose more than analysts were expecting.
Before the opening bell in New York, investors were also spooked by a warning from China's main banking regulator, which told the nation's lenders to strictly comply with capital requirements or face sanctions. The tough statement indicates Beijing is ready to more actively tighten the credit growth that has been the linchpin of China's economic recovery, fueling fears about the potential fallout on the U.S. from any slowdown in China.
"If they have capital constraints, their lending might slow, which is part of the growth engine over there, and part of ourrecovery is really dependent on the global story with growth out of Asia," said Maury Fertig, chief investment officer at Relative Value Partners. "China is where a lot of demand is coming from, so any kind of slowing there will ultimately have some kind of impact."
The Standard & Poor's 500 (SPX) was recently off 0.2%, led by a 0.7% decline in its financial sector. The Nasdaq Composite Index (RIXF) was down 0.6%. The small-stock Russell 2000 (RUT) was down 0.8%.
Crude-oil futures also declined, recently trading below $76 a barrel and hurting energy companies such as Murphy Oil Corp. (MUR), Rowan Cos. (RDC) and Cabot Oil & Gas Corp. (COG).
Among stocks in focus, Medtronic Inc. (MDT) jumped 5.3% after reporting that its fiscal second-quarter earnings soared 59%, beating analyst estimates, amid prior-year charges and as the company saw sales increase, especially in its heart-related businesses. The medical-devices maker also raised its fiscal-year earnings guidance. .
Barnes & Noble Inc. (BKS) fell 6.5% as its fiscal second-quarter loss widened and the bookseller slashed its earnings forecast for the year. It warned that due to "overwhelming" demand, it would have to ramp up production for its not-yet-released e-reader, which will mean higher costs.
Still to come Tuesday are the minutes from the last Federal Reserve interest-rate-setting meeting, due at 2 p.m. EST.
The dollar and Treasury prices were little changed. The 10-year note was up 2/32 to yield 3.347%.
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=N%2Bx7ar2RUJ5nP%2BaDNzlJwA%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
November 24, 2009 13:26 ET (18:26 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.
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