UpInArms  (1000+ posts)      | Wed Feb-06-08 09:22 PM Response to Original message |
| 107. Dow ends day at psychologically important number 12,200 even |
 |  Dow 12,200.10 65.03 (0.53%) Nasdaq 2,278.75 30.82 (1.33%) S&P 500 1,326.45 10.19 (0.76%) 10-Yr Bond 3.614% 0.027 NYSE Volume 3,799,418,500 Nasdaq Volume 2,357,679,250 how handy! |
Wed 6 Feb 2008 DU-SMW (briefing.com):
With the major indices closing near their worst levels of the day, then, Wednesday's session can indeed be labeled a disappointment by market bulls. Most media sources will attribute comments from Philadelphia Fed President Plosser as the catalyst for the downturn. The fact of the matter is that the market was already fading from its highs (the Dow +125; the Nasdaq +29; and the S&P +15) when comments from Mr. Plosser hit the wires around 13:30 ET.
In particular, Mr. Plosser expressed concerns about the potential for core inflation to remain elevated and conceded that there may be early signs the Fed's credibility is weakening. Soon after, though, he also noted that one can "never say never" about deeper rate cuts. In other words, it was a typical "on the one hand, on the other hand" type of delivery that usually characterizes Fed speeches.
The market, after Tuesday's sell-off, focused on the negative elements of his remarks, namely the inflation concerns, and continued sliding in the early afternoon. There was a brief upturn following the Plosser dip, which goes to show the market wasn't as rattled by the remarks as some contended, yet that rebound try also ran out of steam as growth concerns continued to prevail. Once again, the losses were fairly broad-based. The health care sector (+0.03%) eked out a slight gain and was the only sector to close the session with a gain. Strikingly, the utilities sector (-0.15%) and the consumer staples sector (-0.27%) exhibited relative strength, which fits with their defensive appeal in times of uncertainty and slower growth. The energy sector (-1.58%) suffered the biggest loss on Wednesday as a bearish inventory report sparked a 1.5% drop in crude futures to $87.09. Earlier in the day, the Dept. of Energy reported crude stockpiles rose 7.05 million barrels versus an expected build of 2.6 million barrels. The larger than expected build played into concerns about an economic slowdown. Many of the transportation stocks caught a bid, though, with the drop in oil prices and outperformed the market. Separately, the financial sector, which fell 1.06%, underperformed again with big losses in the exchange space taking a toll. Shares of CME Group (CME 485.25, -103.55) plummeted 17% in the wake of a report that the Dept. of Justice issued a comment letter suggesting the separation of clearing operations from the futures exchanges. Technology, down 1.4%, was another influential weak spot that weighed on the broader market. True to recent form, the big-cap technology issues were out of favor as evidenced by the 1.8% decline in the Nasdaq 100 that preceded Cisco's (CSCO 23.08, -0.18) earnings report after the close.
/... http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3170603#3171482
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