Stocks Suffer Worst Drop in More than Eight Months

|
Includes: CSCO, DIA, ERO, MA, QQQ, SPY, V
by: Midnight Trader

4:24 PM, Feb 4, 2010 --

  • NYSE down 254.8 (3.6%) to 6,787.86.
  • DJIA down 268.4 (2.6%) to 10,002.
  • S&P 500 down 34.2 (3.1%) to 1,063.
  • Nasdaq down 65.5 (3%) to 2,125.


GLOBAL SENTIMENT

  • Hang Seng down 1.84%
  • Nikkei down 0.46%
  • FTSE down 2.17%


UPSIDE MOVERS

(+) CSCO continues evening gain that followed earnings beat, sales forecast.

(+) V continues evening gain after earnings beat.

(+) VOD beats with sales, lifts forecast.

(+) GPS guides for Q4 beat after positive Jan. sales.

(+) ANF gains after Jan. same-store sales figures.

(+) KLIC beats with Q1, guides above.

DOWNSIDE MOVERS

(-) EK previews earnings.

(-) MA ex-items EPS below estimates.

(-) ARO raises Q4 EPS view after sales, but shy of Street view.

MARKET DIRECTION

Stocks end sharply lower, shedding up to 3% in some cases, and pushing the Dow Jones Industrial Average below 10,000 for the first time since November, though at final settle it stood at 10,002. The 270-point Dow drop is its worst showing in some nine months. Investors were reacting to European debt worries and concern the global recovery may suffer as a result. Commodities fell as the dollar gained against the euro.

Global markets tumbled on concerns about debt levels in Greece, Spain and Portugal. The euro hit a seven-month low against the dollar.

Domestically, the Labor Department triggered selling when it said unemployment claims rose 8,000 to a seasonally adjusted 480,000 last week. Economists had predicted claims would drop to 460,000. It was the fourth increase in the past five weeks, boosting claims to their highest level in two months.

The figures also raised questions about Friday's government report on jobs. It is expected to show employers added a small number of jobs but that the unemployment rate edged up to 10.1% from 10%, according to reports.

On the plus side, the Labor Department recorded a continuing increase in productivity, up by a seasonally adjusted 6.2% in Q4. Analysts had expected a 6% increase, as firms try to do more with fewer workers.

Mining and materials shares tumbled. Worries over the debt struggles of euro-zone countries Greece, Portugal and Spain fueled a flight from stocks to the safe-haven dollar, which hurt commodity prices denominated in the greenback, Reuters said.

Cisco (NASDAQ:CSCO) was modestly firmer after its earnings beat and encouraging sales guidance but failed to give much lift to the broader market.

Weighing on the financial sector, MasterCard (NYSE:MA) shed some 10% at one point after it posted quarterly earnings that fell short of Wall Street's estimates. That contradicted stronger-than-expected earnings from Visa (NYSE:V) in Wednesday's after-hours.

Commodities finished lower Thursday amid a bouquet of worries ranging from economic growth to debt woes in Europe.

Crude for March delivery dropped to $3.93, or 5.11%, to $73.05 a barrel. Meanwhile, gold futures fell $49, or 4.41%, to $1,063 an ounce.

About this article:

Expand
Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here