YAHOO[BRIEFING.COM]:
A batch of negative news items provided market participants with an excuse to
sell into the stock market's recent gains. Trading volume remains low, though,
suggesting there is still little conviction behind the moves.
Heading into the open, stocks were up roughly 3.5% through the
first few sessions of 2009. Stocks finished this session a bit off their lows
with a 3.0% loss, which is the largest decline in more than one month.
Only 1.2 billion shares traded hands on the NYSE. Though that is
in-line with recent levels, it remains well below longer-term trends.
A worse-than-expected ADP employment report and a warning from Intel (INTC 14.44, -0.93) underpinned
early weakness.
The ADP report indicated 693,000 jobs were lost in December. The
consensus called for 493,000 job losses. The data support economists' opinions
that government data will show a rise in the national unemployment rate,
which is scheduled to be announced Friday.
Intel cut its fourth quarter revenue estimate for the second time
due to continued weakness in its end markets. The company now expects revenue
of $8.2 billion, though Wall Street pegged the consensus estimate at $8.7
billion. Shares of INTC traded markedly lower in response. Their weakness
weighed on the tech sector (-3.7%) and the Nasdaq.
Dow component Alcoa (AA
10.89, -1.23) also made headlines, though its story wasn't much of a surprise.
The company announced it will reduce output, capital expenditures, and its
global workforce as it contends with a softer economic environment. Such
broader headwinds have been hanging over the stock for the last several months.
Bank of
BAC and peers JPMorgan Chase (JPM 28.09, -1.79) and
Wells Fargo (WFC 25.87,
-1.67) traded as laggards in the financial sector as investors were reminded
that banks have a long way to recovery. Analysts at Oppenheimer
expect banks will have to raise capital in 2009, even though banks have already
gone on several capital raising campaigns. Such a move could dilute existing
shareholders.
Financials finished 5.1% lower, replacing energy as the session's
worst performing economic sector.
Energy shed 3.9% as crude futures fell nearly 12% to close at
roughly $42.80 per barrel.
Crude dropped as bearish inventory data put demand concerns back
into focus. Analysts expected the Department of Energy to report a weekly build
of 800,000 barrels, but a build of 6.68 million barrels was reported, instead.
The materials sector was able to limit its losses due to strength
in Monsanto (MON 86.16,
+12.94). Monsanto reported adjusted earnings of $0.90 per share, and raised its
outlook for fiscal 2009. The company now expects earnings to range from $4.40
and $4.50 per share. The outlook remains short of the consensus forecast,
though.
Still, MON gained nearly 18% to finish at its highest level in
nearly two months. That provided a bit of relief to the beaten down materials
sector, which finished 1.6% lower.DJ30 -245.40 NASDAQ -53.32 NQ100 -2.8% R2K
-3.4% SP400 -3.3% SP500 -28.05 NASDAQ Dec/Adv/Vol
2027/713/2.07 bln NYSE Dec/Adv/Vol
2490/622/1.24 bln