Market Recap: DJIA Slides 113 Points as Energy Woes Fuel Late-Session Sell-Off Gold futures exploited their safe-haven status to end higher for the sixth straight session by Andrea Kramer (akramer@sir-inc.com) 6/1/2010 4:21 PM
Stocks struggled to pick a direction today, as the Street weighed tumbling commodities prices against encouraging construction and manufacturing data. More specifically, the government said construction spending rose a better-than-expected 2.7% in April, marking the largest increase in nearly 10 years. Meanwhile, the Institute for Supply Management's (ISM) manufacturing index declined to 59.7 in May, compared to economists' predictions for a steeper drop to 59.0. However, the upbeat economic data couldn't stifle the bears for long. The U.S. dollar's four-year peak versus the euro -- on top of escalating concerns about the still-unplugged oil leak in the Gulf of Mexico -- weighed on energy issues, eventually pushing the Dow Jones Industrial Average to a triple-digit deficit by the close. What's more, as Schaeffer's Senior Equity Options Trader Richard Sparks noted, "Today marks the 22nd straight session the S&P 500 Index hasn't had consecutive up days – the longest streak since October 2008, which wasn't a good time to be long the market."
The Dow Jones Industrial Average (DJIA – 10,024.02) surrendered an early 85-point lead in afternoon trading, swallowing a loss of 112.6 points, or 1.1%. Only six of the Dow's 30 blue chips bucked the trend, with Kraft Foods (KFT) pacing the advancing equities, while Alcoa (AA) and JPMorgan Chase (JPM) led the 24 laggards. Nevertheless, despite the eleventh-hour sell-off, the index maintained its foothold atop the round-number 10,000 level.
The S&P 500 Index (SPX – 1,070.71) also turned lower in the final hour of trading, ending on a deficit of 18.7 points, or 1.7%. As noted earlier, the SPX hasn't finished two consecutive sessions in the black in 23 sessions – marking the longest streak since October 2008. Finally, the Nasdaq Composite (COMP – 2,222.33) followed its broad-market brethren lower in the final minutes of trading, giving up 34.7 points, or 1.5%, by the close.
Turning to equities in focus, Nokia Corp. (NOK) was a favorite target among the call-trading crowd ... Hovnanian Enterprises (HOV) seduced skeptical option speculators ahead of earnings ... Bulls bet on a rebound for a handful of education issues, including Corinthian Colleges (COCO) and Apollo Group, Inc. (APOL) ... Option players' pessimism intensified toward Fifth Third Bancorp (FITB) ... Qualcomm Inc. (QCOM) was the center of a long-term bearish spread ... and today's Quote of the Day comes from Justin Kurtz, 21. After a towing company erroneously hauled his car from a parking lot – costing him $118 to reclaim – the college student created a Facebook page to air his grievances. However, the site could cost Kurtz a jaw-dropping chunk of change, after the company filed a defamation suit seeking $750,000 in damages. Nevertheless, the 21-year-old is countersuing the towing firm, and claims the company – which has received a failing grade from the local Better Business Bureau – is abusing the legal process to stifle his right to free speech, stating:
"There's no reason I should have to shut up because some guy doesn't want his dirty laundry out. It's the power of the Internet, man."
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