NEW YORK: U.S. stocks fell on Thursday, Sept 23 after a weak reading on the labor market dropped stocks through a key technical level, validating the worries of those who thought the recent rally was flimsy.
Major indexes were little changed for most of the day before the S&P 500 broke below 1,130, the high end of the summer's trading range. Investors had hoped that the level would hold despite low trading volume, which raised questions about the rally's stamina. Thursday's volume was very light, with 7.21 billion shares traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, far below last year's estimated daily average of 9.65 billion shares.
"Market technicians had been very positive on our breaking out of that range, so falling back under it added to the decline we saw and accelerated our losses," said John Stoltzfus, senior market strategist at Ticonderoga Securities in New York. "I think there's a good chance we'll regain that level, but right now the glass appears half-empty."
Jobless claims unexpectedly rose in the latest week, a sign that headwinds still face the labor market. Existing-home sales rose in August, but from still-depressed levels.
"Weakness in housing and the labor market continues to create overhead for stocks and suggests that the size of the rally we've seen this month was probably unwarranted," said Len Blum, managing partner at Westwood Capital LLC in New York.
The S&P 500, coming into Thursday, had gained 8.1 percent for the month, and some traders noted potential profit-taking as the quarter-end approached.
The day's biggest losses came in the financial sector, with the S&P financial index off 2 percent. Insurance companies were the top two percentage decliners among the index's components, with MetLife Inc down 3.9 percent at $37.86 and Principal Financial Group Inc off 3.7 percent to $24.80.
Big TECHNOLOGY [] companies offset some of the losses on the Nasdaq, with Nvidia Corp up 2 percent to $11.62 and U.S.-listed shares of Baidu Inc up 3.5 percent to $95.03.
The Dow Jones industrial average was down 76.89 points, or 0.72 percent, at 10,662.42. The Standard & Poor's 500 Index was down 9.45 points, or 0.83 percent, at 1,124.83. The Nasdaq Composite Index was down 7.47 points, or 0.32 percent, at 2,327.08.
Adding to investor concerns, European data showed the pace of growth in the euro zone's services and manufacturing sector slowing more than expected. Existing-home sales rose in August by 7.6 percent from a 13-year low recorded in July.
Software maker Red Hat Inc jumped 9 percent to $40.07 after posting earnings that beat Wall Street's estimates, while Bed Bath & Beyond rose 3.2 percent to $43.40 a day after its earnings also topped forecasts.
McDonald's Corp fell 0.7 percent to $74.64 after it raised its quarterly cash dividend by 11 percent to 61 cents. The move comes a day after fellow Dow component Microsoft Corp raised its dividend but sold off as investors had been looking for a higher yield.
Bionovo Inc soared 57 percent to $1.91 after the U.S. health regulators accepted the chemistry, manufacturing and controls plan for its lead drug candidate, Menerba, an experimental treatment for hot flashes related to menopause.
Bespoke Investment Group wrote that the top-performing stocks of the quarter should continue to outperform in the final week because of window dressing.
The theory is that "fund managers want to have these names on their books for clients to see," the firm wrote to clients. - Reuters
Major indexes were little changed for most of the day before the S&P 500 broke below 1,130, the high end of the summer's trading range. Investors had hoped that the level would hold despite low trading volume, which raised questions about the rally's stamina. Thursday's volume was very light, with 7.21 billion shares traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, far below last year's estimated daily average of 9.65 billion shares.
"Market technicians had been very positive on our breaking out of that range, so falling back under it added to the decline we saw and accelerated our losses," said John Stoltzfus, senior market strategist at Ticonderoga Securities in New York. "I think there's a good chance we'll regain that level, but right now the glass appears half-empty."
Jobless claims unexpectedly rose in the latest week, a sign that headwinds still face the labor market. Existing-home sales rose in August, but from still-depressed levels.
"Weakness in housing and the labor market continues to create overhead for stocks and suggests that the size of the rally we've seen this month was probably unwarranted," said Len Blum, managing partner at Westwood Capital LLC in New York.
The S&P 500, coming into Thursday, had gained 8.1 percent for the month, and some traders noted potential profit-taking as the quarter-end approached.
The day's biggest losses came in the financial sector, with the S&P financial index off 2 percent. Insurance companies were the top two percentage decliners among the index's components, with MetLife Inc down 3.9 percent at $37.86 and Principal Financial Group Inc off 3.7 percent to $24.80.
Big TECHNOLOGY [] companies offset some of the losses on the Nasdaq, with Nvidia Corp up 2 percent to $11.62 and U.S.-listed shares of Baidu Inc up 3.5 percent to $95.03.
The Dow Jones industrial average was down 76.89 points, or 0.72 percent, at 10,662.42. The Standard & Poor's 500 Index was down 9.45 points, or 0.83 percent, at 1,124.83. The Nasdaq Composite Index was down 7.47 points, or 0.32 percent, at 2,327.08.
Adding to investor concerns, European data showed the pace of growth in the euro zone's services and manufacturing sector slowing more than expected. Existing-home sales rose in August by 7.6 percent from a 13-year low recorded in July.
Software maker Red Hat Inc jumped 9 percent to $40.07 after posting earnings that beat Wall Street's estimates, while Bed Bath & Beyond rose 3.2 percent to $43.40 a day after its earnings also topped forecasts.
McDonald's Corp fell 0.7 percent to $74.64 after it raised its quarterly cash dividend by 11 percent to 61 cents. The move comes a day after fellow Dow component Microsoft Corp raised its dividend but sold off as investors had been looking for a higher yield.
Bionovo Inc soared 57 percent to $1.91 after the U.S. health regulators accepted the chemistry, manufacturing and controls plan for its lead drug candidate, Menerba, an experimental treatment for hot flashes related to menopause.
Bespoke Investment Group wrote that the top-performing stocks of the quarter should continue to outperform in the final week because of window dressing.
The theory is that "fund managers want to have these names on their books for clients to see," the firm wrote to clients. - Reuters
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