NEW YORK: Stocks once again succumbed to late-day selling in light trading on Monday, June 21 as hopes China's newfound dedication to yuan flexibility turned to doubts about the speed and magnitude of Beijing's intentions, according to Reuters.
The market's overall bearish tone eroded the initial optimism around the benefits of the yuan move. Stocks pulled back as investors questioned the effectiveness of what is expected to be a gradual change.
"The announcement was considered to be constructive, but markets were unable to sustain that euphoria as they looked at the details," said John Brady, senior vice president at MF Global in Chicago.
The S&P 500 briefly broke above 1,130, the midpoint between its 2010 high and low and a key technical mark but was unable to hold the level, adding to the negative sentiment. The index had risen more than 8 percent over the past ten trading days.
While support for China's decision faded, pessimism that the plan would lead to higher costs on imports from China weighed on retailers. Dow component Wal-Mart Stores Inc (WMT.N) fell 1 percent to $51.02. The S&P retail index .RLX shed 1.7 percent.
"It seems everything in the low-cost retailers is made in China," said Brian Gendreau, market strategist affiliated with Financial Network Investment Corporation in El Segundo, California.
The Dow Jones industrial average .DJI fell 8.23 points, or 0.08 percent, at 10,442.41. The Standard & Poor's 500 Index .SPX was down 4.30 points, or 0.38 percent, at 1,113.21. The Nasdaq Composite Index .IXIC was down 20.71 points, or 0.90 percent, at 2,289.09.
Losses were extended on Nasdaq on weakness in large-cap tech stocks. Amazon.com Inc (AMZN.O) fell 2.6 percent to $122.55 after it cut the price of its Kindle e-reader product to $189 from $259. Google Inc (GOOG.O) lost 2.3 percent to $488.56 and Dow component Microsoft Corp (MSFT.O) was down 1.9 percent to $25.95.
Markets opened higher, with the Dow soaring 140 points, as investors said China's move could lift the profit outlook for multinationals. Freeport-McMoRan Copper & Gold Inc (FCX.N) jumped 3.3 percent to $68.09. Dow component Alcoa Inc (AA.N) climbed 5.5 percent to $11.72.
"This move is going to be good for global markets in the long-term and help the bottom lines of companies with Chinese exposure," said Channing Smith, vice president of Capital Advisors in Tulsa, Oklahoma. "However, markets have had a good run and investors haven't forgotten that we face headwinds with Europe and the labor market."
In deal news, Biovail Corp (BVF.N) agreed to buy Valeant Pharmaceuticals International (VRX.N) in a complex deal worth roughly $3.3 billion. Biovail gained 14 percent to $16.67 on the New York Stock Exchange while Valeant was up 2.3 percent to $46.90.
BP's (BP.L)(BP.N) U.S.-listed shares slid 4.5 percent to $30.23 after an internal BP document estimated that a worst-case scenario for the Gulf of Mexico oil spill could be about 100,000 barrels per day. - Reuters
The market's overall bearish tone eroded the initial optimism around the benefits of the yuan move. Stocks pulled back as investors questioned the effectiveness of what is expected to be a gradual change.
"The announcement was considered to be constructive, but markets were unable to sustain that euphoria as they looked at the details," said John Brady, senior vice president at MF Global in Chicago.
The S&P 500 briefly broke above 1,130, the midpoint between its 2010 high and low and a key technical mark but was unable to hold the level, adding to the negative sentiment. The index had risen more than 8 percent over the past ten trading days.
While support for China's decision faded, pessimism that the plan would lead to higher costs on imports from China weighed on retailers. Dow component Wal-Mart Stores Inc (WMT.N) fell 1 percent to $51.02. The S&P retail index .RLX shed 1.7 percent.
"It seems everything in the low-cost retailers is made in China," said Brian Gendreau, market strategist affiliated with Financial Network Investment Corporation in El Segundo, California.
The Dow Jones industrial average .DJI fell 8.23 points, or 0.08 percent, at 10,442.41. The Standard & Poor's 500 Index .SPX was down 4.30 points, or 0.38 percent, at 1,113.21. The Nasdaq Composite Index .IXIC was down 20.71 points, or 0.90 percent, at 2,289.09.
Losses were extended on Nasdaq on weakness in large-cap tech stocks. Amazon.com Inc (AMZN.O) fell 2.6 percent to $122.55 after it cut the price of its Kindle e-reader product to $189 from $259. Google Inc (GOOG.O) lost 2.3 percent to $488.56 and Dow component Microsoft Corp (MSFT.O) was down 1.9 percent to $25.95.
Markets opened higher, with the Dow soaring 140 points, as investors said China's move could lift the profit outlook for multinationals. Freeport-McMoRan Copper & Gold Inc (FCX.N) jumped 3.3 percent to $68.09. Dow component Alcoa Inc (AA.N) climbed 5.5 percent to $11.72.
"This move is going to be good for global markets in the long-term and help the bottom lines of companies with Chinese exposure," said Channing Smith, vice president of Capital Advisors in Tulsa, Oklahoma. "However, markets have had a good run and investors haven't forgotten that we face headwinds with Europe and the labor market."
In deal news, Biovail Corp (BVF.N) agreed to buy Valeant Pharmaceuticals International (VRX.N) in a complex deal worth roughly $3.3 billion. Biovail gained 14 percent to $16.67 on the New York Stock Exchange while Valeant was up 2.3 percent to $46.90.
BP's (BP.L)(BP.N) U.S.-listed shares slid 4.5 percent to $30.23 after an internal BP document estimated that a worst-case scenario for the Gulf of Mexico oil spill could be about 100,000 barrels per day. - Reuters
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