Tuesday, June 8, 2010

Wall St tumbles, S&P's lowest close in 7 months

NEW YORK: US stocks fell on Monday, June 7, taking the S&P 500 to its lowest close in seven months, as industrials and TECHNOLOGY [] shares fell and investors stayed on their heels after last week's payrolls figure discouraged buyers.

The Nasdaq fared the worst as investors unloaded positions in the most liquid large-cap technology shares. Research in Motion Ltd fell 5.2% to $56.56 on worries about the BlackBerry's sales and after the introduction of Apple's latest iPhone. Apple Inc lost 1.9%.

The S&P 500 is down 13.7% from its April 23 closing high for the year, firmly in correction territory. The benchmark index breached a key technical support level around 1,060 late in the afternoon.

"You have to break this downside momentum before you can feel comfortable wading into this market," said Bruce Bittles, chief investment strategist of Robert W Baird & Co in Nashville.

On Friday, the major US stock indexes slid more than 3% after the weaker-than-expected May non-farm payrolls report and as worries increased over the sovereign debt crisis in some European countries, the latest being Hungary.

The Dow Jones industrial average fell 115.48 points, or 1.16%, to 9,816.49. The Standard & Poor's 500 Index slid 14.41 points, or 1.35%, to 1,050.47. The Nasdaq Composite Index tumbled 45.27 points, or 2.04%, to 2,173.90.

The stock market has been sensitive to recent news flow, particularly out of Europe, and that has prompted some abrupt intraday swings in the the S&P 500. The CBOE Volatility Index, also known as the VIX, remains at an elevated level, though it has eased back since May.

The VIX shot up 3.1% to close at 36.57, while the S&P 500 fell to its lowest closing level since early November.

"I don't think we can underestimate the disappointment from that payroll report on Friday," said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors in St. Louis.

"It was a kick in the stomach. It took the wind out of things."

Cat tumbles, Google drops
Large manufacturers' shares ranked as the biggest drags on the Dow, with United Technologies Corp down 2.9% at US$63.22, and Caterpillar Inc fell 3.3% to US$55.83.

Apple finished down at US$251.03 after the company unveiled the newest iPhone model. Analysts said the expected announcement was already priced into the stock.

Google Inc lost 2.7% to US$485.52 after Connecticut's attorney general sent a letter to the dominant US search engine company asking if it had collected data from personal and business wireless networks without the owners' permission.

Bank of America Corp fell 3.4% to US$14.83 after the company's Countrywide Financial Corp unit agreed to pay US$108 million to settle US government charges of misleading and overcharging consumers.

Goldman slides
Shares of Goldman Sachs Group Inc tumbled 2.6% to US$138.68 following news that a government commission investigating the 2008 financial crisis has issued a subpoena to the company after the bank flooded the panel with billions of pages of digitized records.

Decliners outnumbered advancers on the New York Stock Exchange by a ratio of 11 to four, while on the Nasdaq, about five stocks fell for every one that rose.

About 9.70 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq ' just above last year's estimated daily average of 9.65 billion. ' Reuters

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