according to the long-legged Mac-Daddy on PA Ave.
Stocks Pare Losses but VIX Still Up 25%
Major U.S. Indexes.DJIA10180.09-264.28-2.53%0.NCOMP2231.22-67.15-2.92%747,424,527.SPX1084.94-30.11-2.7%0
The Dow Jones Industrial Average was down more than 200 points, or over 2 percent, in afternoon trading.
The Dow was briefly down more than 350, which Dave Lutz, managing director at Stifel Nicolaus Capital Markets, attributed to the yield on the 10-year Treasury bond dropping as low as 3.2 percent.
"It was a little bit of a vacuum after the 10-year touched 3.2 percent," Lutz said. "This has everyone a little nervous."
The CBOE volatility index, widely considered the best gauge of fear in the market, spiked more than 30 percent to above 45, its highest level in over a year.
Industrials were the hardest hit: All 30 Dow components were lower, led by Caterpillar [CAT 59.67 -1.77 (-2.88%) ], Alcoa [AA 11.25 -0.53 (-4.5%) ] and GE [GE 16.4401 -0.8199 (-4.75%) ].
The Nasdaq was the hardest hit of the three today as most of the tech giants took a beating, with Apple, Google and Intel all down more than 2 percent.
Initial claims for unemployment benefits shot up by 25,000 to 471,000 last week, which rattled an already jittery market as economists had expected claims to drop to 440,000. Meanwhile, the Philadelphia Fed reported its gauge of regional manufacturing activity dropped to 21.4 in April, slightly more than expected, from 20.2 in March. And leading indicators fell 0.1 percent in April, the first decline in a year.
European stocks lost more than 2 percent amid worries that Germany's unilateral move on banning naked short selling indicates an inability for the nations to agree and solve their problems. Plus, there were worries that the bank would extended to the entire euro zone — and even the U.S.
Financials took a hit, with Bank of America [BAC 15.69 -0.62 (-3.8%) ] and Citigroup [C 3.675 -0.135 (-3.54%) ] both down more than 3 percent, after the financial regulatory reform bill failed to pass in the Senate on Wednesday amid resistance from both parties. But Democrats will attempt to seal the deal on Thursday with a fresh vote at 2:30 pm Washington time.
Rochdale analyst Dick Bove said banks are still attractive.
Banks "may fall another 10% to 12% reflecting market fears but they are still very attractive investments," Bove wrote in a note to clients. "Longer term, I still expect that these stocks will grow in multiples, not percentages."
Lutz said there are a "tremendous number of indicators" that suggest the whole market is oversold and "a sharp rally is at hand."
He said it "could be a bit of a sloppy afternoon" but the rally could come tomorrow when Germany votes on the $1 trillion EU bailout — depending on the outcome.
Art Cashin, head of floor operations at UBS, said there's also buzz on the floor that Germany and other markets may be closed Monday for a religious holiday, which could be good for the market as it increases the chances of the EU pulling off some unified measures. Cashin pointed out that what really rattled the market was Germany acting alone.
However, options expiration is tomorrow, which could add some volatility to the market.
The dollar fell against the euro, after being down on the debt and financial regulation worries earlier.
But commodity prices remained lower, with crude oil dropping below $67 a barrel and gold falling below $1,190 an ounce.
Treasurys jumped on the stock-market turmoil, particularly the longer-dated securities.
In earnings, office retailer Staples [SPLS 21.68 0.14 (+0.65%) ] reported a 32 percent rise in profit to 26 cents a share.
Sears [SHLD 90.15 -9.41 (-9.45%) ] shares fell more than 5 percent after the retailer reported a 38 percent drop in profit as higher costs and more markdowns weighed on margins.
Williams-Sonoma [WSM 29.51 1.07 (+3.76%) ] shares climbed after the home-goods chain reported a better-than-expected profit and boosted its outlook for the year as consumers started to show signs of a comeback.
GameStop [GME 21.15 -0.12 (-0.56%) ] also jumped to become one of the S&P leaders after the videogame retailer posted stronger net income, boosted by strong sales of popular games like "Battlefield Bad Company 2" and "God of War III." But the company's outlook for the current quarter fell shy of expectations.
Luxury jeweler Tiffany & Co [TIF 42.29 -1.14 (-2.62%) ] raised its dividend for the second time in 2010, and said it will now pay shareholders 25 cents per quarter for each share they hold, up from 20 cents. Clorox [CLX 63.37 -0.54 (-0.84%) ], Safeway [SWY 22.88 -0.81 (-3.42%) ] and Dr. Pepper Snapple [DPS 36.72 -1.35 (-3.55%) ] also raised their dividends.
After the closing bell, earnings are due from Dell [DELL 14.4601 -0.5199 (-3.47%) ], Gap [GAP 5.74 -0.19 (-3.2%) ], and Intuit [INTU 34.12 -1.45 (-4.08%) ].
Still to Come:
THURSDAY: Earnings from Dell & Gap after the bell
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