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Stock Market News for April 13, 2011
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ShareDisappointing earnings result from Alcoa, declining crude prices, the worsening Japanese nuclear crisis and lower forecasts for economic growth combined to take the markets significantly lower on Tuesday. The Dow lost more than 100 points, heavily dragged by a 6% slide in Alcoa’s shares, while the other benchmarks inched down by almost a percentage.
The Dow Jones Industrial Average (DJIA) lost 0.9% or 117.53 points to end at 12,263.58. This was its largest decline since March 16 this year. The Standard & Poor 500 (S&P 500) closed at 1,314.16, dropping 0.8% and the Nasdaq shed a percentage to finish the day at 2,744.79. For every three stocks that declined on the New York Stock Exchange, only one share managed to advance. Volumes remained tight and consolidated volumes on the NYSE were at 4.4 billion shares. The CBOE Volatility Index (VIX) rose above 17.
Volumes have been tight over the past several days owing to investors’ cautious stance ahead of the earnings season. Last Monday, Alcoa, Inc. (NYSE:AA - Analyst Report) unofficially kicked off the earnings season with more disappointment for investors. The company’s shares plunged 6.0% and settled at $16.70 at the closing bell, on Tuesday. Alcoa’s slide significantly affected the broader index as it led the decliners among the Dow components.
Investors’ eyes will also be fixed on the earnings results of financial companies like JPMorgan Chase & Co. (NYSE:JPM - Analyst Report), Bank of America Corporation (NYSE:BAC - Analyst Report) and Citigroup, Inc. (NYSE:C - Analyst Report). Ranked high among nation’s largest banks, JPMorgan Chase is slated to release its results on Wednesday and will be followed by Bank of America on Friday while Citigroup will report its results on the coming Monday. However, the financial sector dropped a few points ahead of the crucial earnings results and the Financial Select Sector SPDR shed 0.4%. Shares of JPMorgan Chase and Bank of America dropped 0.5% and 0.2%, respectively, while Citigroup was up 0.4%. Among other decliners in the sector were American International Group, Inc., Morgan Stanley (NYSE:MS - Analyst Report), The Goldman Sachs Group, Inc. (NYSE:GS - Analyst Report), American Express Company and they shed 0.4%, 0.4%, 0.7% and 0.8%, respectively.
The energy sector further dragged the broader markets down as crude prices slipped 3.3%, marking oil’s biggest one-day fall in almost a month. Crude-oil futures for May delivery on the New York Mercantile Exchange dropped $3.67 to settle at $106.25 per barrel, also the lowest level for the month. The decline came as Goldman Sachs projected Brent crude prices would decline by almost $20 per barrel over the next few months. The International Energy Agency echoed these concerns and said: “High prices are already starting to dent demand growth”. The energy sector was also the biggest loser in the S&P 500 and oil indexes like NYSE Arca Oil Index, NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index dropped 3.0%, 2.8% and 2.7%, respectively. Chevron Corp. (NYSE:CVX - Analyst Report) dropped 3.3% and was the second-worst performer in the Dow. Decliners also included Exxon Mobil Corporation (NYSE:XOM - Analyst Report), ConocoPhillips (NYSE:COP - Analyst Report), Marathon Oil Corporation (NYSE:MRO - Analyst Report), Chesapeake Energy Corporation (NYSE:CHK - Analyst Report), Pioneer Natural Resources Co., Nabors Industries Ltd. and National Oilwell Varco, Inc. (NYSE:NOV - Analyst Report) and they dropped 2.3%, 3.7%, 3.1%, 4.2%, 5.0%, 4.6% and 3.7%, respectively.
Markets were jolted after an earthquake and tsunami struck Japan on March 11 and the resulting nuclear crisis, thereafter, dented the markets for a few days. The nuclear crisis has once again intensified raising fresh concerns for investors’ as Japan said the nuclear crisis at the Fukushima Daiichi plant was as serious as the 1986 Chernobyl disaster in the former Soviet Union.
On the domestic front, the Commerce Department report said that the trade deficit had narrowed to $45.8 billion in February from an upwardly revised January figure of $47 million. Though the shrinkage should suggest an improvement, in reality, the data is disappointing as both exports and imports have declined significantly. According to the report, exports dropped more than expected, by 1.4% to $165.1 billion while imports of goods and services declined 1.7% to a seasonally adjusted $210.9 billion in February. The decline suggests a dent in the economic recovery as lower exports reflects slower domestic production and lower imports are indicative of reduced demand for products and services in US. Meanwhile, the Labor Department reported a 2.7% rise in import prices in March versus a rise of 1.4% in February.
The technology sector was also among the decliners. After Cisco Systems, Inc. (NASDAQ:CSCO - Analyst Report) announced it was cutting 550 jobs owing to restructuring of its consumer product business, the company’s shares fell 0.2%. Among other decliners in the sector were Google Inc. (NASDAQ:GOOG - Analyst Report), Texas Instruments Inc., Microsoft Corporation (NASDAQ:MSFT - Analyst Report) and Intel Corporation (NASDAQ:INTC - Analyst Report) and they dropped 1.2%, 2.3%, 1.3% and 1.8%, respectively.
Read the full analyst report on AA
Read the full analyst report on JPM
Read the full analyst report on BAC
Read the full analyst report on C
Read the full analyst report on MS
Read the full analyst report on GS
Read the full analyst report on CVX
Read the full analyst report on XOM
Read the full analyst report on COP
Read the full analyst report on MRO
Read the full analyst report on CHK
Read the full analyst report on NOV
Read the full analyst report on CSCO
Read the full analyst report on GOOG
Read the full analyst report on MSFT
Read the full analyst report on INTC
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