Equities Shrivel as Day Wears On

Equity market prices died after the opening hour and on shriveled volume slid lower for the rest of the day on Monday.

From about 10:30am through 4:00pm, traders hit the bids across the board. At the close, the DJIA (-79.89 -1.21% to 6547.05), S&P 500 (-6.85 -1.00% to 676.53), and NASDAQ (-25.21 -1.95% to 1268.04) were disappointing.

The Toronto Composite dropped -24.53 -0.32% to 7566.94, while the Venture Board sank -14.93 -1.80% to 814.19.

By the end of the session in NY, the sector winners and losers were: Financials (XLF +1.3%) due to the Banks ($BKX +5.3%) and REITs ($DJR +2.1%); and Technology (XLK -3.2%) with Semi-conductors ($SOX -2.3%) weak. Biotech ($BTK -3.9%) and Goldminers ($XAU -3.4%) were the other industry groups that fared badly on the day.

On the corporate front, Merck (MRK) agreed to acquire Schering-Plough (SGP) for $41.1 billion in cash and stock. McDonalds (MCD) reported positive same-store-sales as consumers turn to fast food as a low cost alternative during this recession. Capital One (COF $8.73, down from a 52-week high of $63.50) announced it would cut its dividend to save cash, which continues the recent trend of banks cutting their dividend pay-outs.

Roche appears ready to pay 95 to buy the remaining shares they do not already own in Genentech (DNA). Amgen (AMGN) and Gilead Sciences (GILD) will now become trader favorites in this space.

Also Dow Chemical (DOW) is nearing its goal of acquiring Rohm and Haas for $78/share. Shareholders don’t like the debt being taken on.

On significantly lower volume there were 22 of the Cara 100 stocks that lifted, led by Suncor (SU +8.7%). The losers were led by Dow Chemical (-11.1%), Votorantim Celulose (VCP -9.1%) and Silver Wheaton (SLW -6.9%).

The US long bond ($USB -0.83% to 127.50) was extremely weak as yields lifted. Yields on the 30-, 10-, and 5-year Treasuries closed at 3.593, 2.886, and 1.891 percent, respectively. The T-Bill yield lifted to 0.200 percent.

As OPEC appears ready to announce cutbacks in output at the upcoming meeting, Crude Oil prices lifted +$1.55/bbl to 47.07.

$GOLD futures (-$24.70/oz to 918.00) were bearish on profit-taking on the stronger $USD (+0.58% to 89.17). The Euro dropped -0.32% to 126.12, the Yen dropped -0.69% to 101.10, the Pound was hammered -2.37% to 137.70, and the Cdn Loonie swooned -1.11% to 76.89.

Earlier in the day Tuesday, Asia-Pacific equity markets were stronger except for Japan (-0.44% to 7055.0). The others lifted: Australia (+0.69% to 3143.2), Shanghai China (+1.88% to 2158.6), and Hong Kong (+3.08% to 11694.1). India (8160.4) was closed.

At 6:15am ET today, the French CAC (+0.80%), the German DAX (+1.48%), and the UK FTSE 100 (+0.55%) were stronger, and the DJIA futures were +153 to 6653.

The $USD futures were down to 88.46, and the Euro futures up to 127.18. Crude Oil futures were up a bit overnight to 47.29.

The spot prices at 6:30am ET Tuesday for gold, palladium, platinum and silver were: 910.09, 194, 1044 and 12.75, a bit soft but nothing much going on as yet.