After The Close - The stock market headed lower from the opening bell, and continued to lose ground over the course of the trading session. Unfortunately for the bulls, the bargain hunters who had moved into prop up stocks in the past were nowhere to be found. At the end of the day, the Dow Jones Industrial Average was off 266 points (-1.8%); the S&P 500 Index was lower by 36 points (-2.3%); and the tech-laden NASDAQ ,the weakest of the major averages, surrendered 78 points (-2.4%). Market breadth demonstrated broad-based selling of equities, as declining stocks swamped advancers by more than 5 to 1 on the NYSE, and by almost 8 to 1 on the NASDAQ.  Notably, we have not seen a reading this decisively negative in quite some time. Moreover, the Russell 2000 was off over 3.5%, and the S&P Mid-Cap Index was down 3.2%, indicating that there was little interest in the smaller names.

There was nowhere to hide today, as all of the market sectors traded deep into negative territory. The basic materials sector was the biggest loser. The weakness in these equities was likely related to lower commodity prices. There were notable losses in the precious metals, as gold (GLD) was off about 9%, and silver (SLV) lost over 12%. This did little for the metal and mining stocks. Meanwhile, energy issues were badly bruised, too, as the price of oil fell about 3% to $88.48 a barrel, and natural gas (UNG) which had done well over the past few weeks, lost about 2%. The best performing sector today was healthcare, which was down less than the market. 

Technically, today’s selloff comes after the S&P 500 Index had staged a dramatic four-day run-up, and was overbought.  Today’s performance erases most of the gains established over the  past week, and puts the Index back at 1,552, within the trading range that it had been trapped in for much of March. Ultimately, much will depend on tomorrow’s showing. If the market heads lower, it may suggest a change in sentiment. Traders were much more apprehensive today, as the VIX soared almost 40%, nearing 17.

The selloff likely got its start overseas. The Asian markets were lower overnight, as China announced that GDP expanded at a slower-than-expected pace for the first quarter. On our shores, the economic news released this morning was also disappointing, as we received a weak reading on the Empire State Manufacturing Index. Also, the NAHB Housing Market Index came in below expectations. Tomorrow, there are quite a few reports coming out, so maybe that will help provide a catalyst for a rebound in equities.

In corporate news, shares of LIFE Technologies (LIFE) were higher, as that company will be acquired. Also Sprint (S) was up sharply on acquisition news. On the earnings front, Citigroup (C) shares were higher after the banking giant put out a decent release.  - Adam Rosner

At the time of this article’s writing the author did not have positions in any of the companies mentioned.


2:30 PM EDT - First, it was Europe, and more particularly Cyprus, that gave the bulls some uneasiness; now, it is China, and most specifically data showing that the world's second-largest economy is slowing down again, which is rattling the bulls today.

Of note, China's government earlier today reported that the nation's gross domestic product had grown by a disappointing 7.7% in the first quarter. That was below the 7.9% rate recorded in the fourth quarter of 2012, and 0.3% below the generally forecast 8.0% gain for the most recent three months.

Add to that somewhat disconcerting report, news that gold was plunging anew, losing, at its worst levels of the day, about $150 an ounce, to well below $1,400 an ounce, and we have the makings of a rout on Wall Street.

And that is just what is going on now. All told, as we proceed through mid-afternoon, the Dow Jones Industrial Average is off by nearly 200 points; the Standard and Poor's 500 Index is in the red by 26 points; and the tech-heavy NASDAQ is lower by 61 points. Even worse, the small-and-mid- cap indexes are really getting hit, with the S&P Mid-Cap 400 now down 32 points, or 2.7%, and the small-cap Russell 2000 Index lower by 29 points, or 3.0%.

Losing stocks are, not surprisingly, well ahead of gaining issues, being swamped by a ratio of six to one on the Big Board and by a almost seven-to-one on the NASDAQ. Also, the VIX volatility index, which had fallen to as low as 11.05 recently, is up by more than three points, or some 25% today, as investors are fleeing perceived risk. All groups are lower, with particular weakness continuing to be shown by the basic materials stocks, a group that is heavily dependent on the vagaries of the international economic cycle.   - Harvey S. Katz

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


12:00 PM EDT - The first day of the new trading week has the bears flexing their muscles, emboldened by disappointing economic news both on these shores and from the international community (more below). Thus, as we reach the midday hour on the East Coast, the Dow Jones Industrial Average, the NASDAQ, and the broader S&P 500 Index are well into negative territory. It is also worth noting that the losses so far have been even more severe in the small and mid-cap markets, which could be a sign that investors are beginning to shy away from the more risky issues. Overall, declining issues are far outnumbering advancers on both the New York Stock Exchange and the NASDAQ.

As noted, the selloff was prompted by a few disquieting economic reports this morning. Prior to the commencement of trading on these shores, the international markets were notably lower after reports surfaced overnight that China’s economy grew by a slower-than-expected 7.7% in the first quarter. That report, along with a few disappointing metrics on the U.S. economy over the last fortnight, is raising concerns about the possibility of a global economic slowdown. Several euro-zone nations are already dealing with recessions. Meantime, the investment community over here was disappointed to learn this morning from the National Association of Home Builders that homebuilder sentiment fell for the third consecutive month in April, with builders citing increasing materials costs and supply chain concerns. It was an unexpected setback for an industry that has shown renewed strength over the last year. Shares of all of the major homebuilders are sharply lower today. Still... 

The sector that is being hit hardest today is the basic materials group. The metals and mining, precious metals, aluminum, and steel issues are getting pummeled. The aforementioned global economic concerns and a drop of nearly $150 an ounce in the price of gold today is behind the sector’s troubles. But the basic materials have some company in negative territory, as nearly all of the 10 major sectors are in the red. Only the defensive-minded healthcare stocks are currently in the plus column. The energy stocks are also getting hammered, feeling the effects of a sharp retreat in crude oil prices. Oil futures fell below $90 a barrel this morning on the New York Mercantile Exchange.

Looking ahead, this week has the makings of a volatile one for those invested in both the equity and commodities markets. The S&P 500 Volatility Index (VIX), which is often referred to as the fear index or the fear gauge, spiked this morning, likely owing to the economic concerns. A plethora of earnings and economic news will give investors a lot to think about over the remainder of this week. The earnings beat got off to a good start this morning with encouraging reports from banking giants Citigroup (C) and M&T Bank (MTB). Shares of Citigroup are higher, while the stock of M&T Bank is little changed. This week, we will get the latest quarterly results from 11 Dow-30 companies. And a few prominent technology names, including industry heavyweight Google (GOOG) also are on the earnings docket.   - William G. Ferguson

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


Stocks to Watch from The Survey There was some M&A activity over the weekend. Telecommunications company Sprint Nextel (S) has received a $25.5 billion buyout offer from cable television provider Dish Network (DISH), which is looking to scuttle the planned takeover of Sprint by Japan-based SoftBank. Dish’s offer equates to about $7 a share in cash and stock, almost 13% higher than Sprint’s closing price on Friday. Consequently, Sprint Nextel shares are surging in the premarket, while DISH stock is down slightly. Elsewhere, medical supplies company Life Technologies (LIFE) has agreed to be acquired by Thermo Fisher Scientific (TMO), a developer of instruments and equipment for the healthcare industry, for $76 a share in cash. Both equities are up nicely in pre-market trading as a result.

On the earnings front, shares of Citigroup (C) and M&T Bank Corp. (MTB) are indicating modestly higher openings this morning, after the banks reported solid first-quarter financials. – Matthew E. Spencer

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


Before The Bell - The stock market fell back moderately to end the week on Friday, although equities did manage to pare their worst losses of the day by the close. In fact, after a mid-session loss of some 75 points, the Dow Jones Industrial Average managed to come all the way back and close the trading day essentially flat. The other key indexes fell back, though, in a generally lower session.

Behind the weaker performance that saw the NASDAQ and the Standard and Poor's 500 Index each lose five points and declining stocks lead gaining issues by ratios of some three-to-two were weak reports on retail spending in March and consumer sentiment over the first part of April. Those disconcerting metrics again raised concerns that the first quarter ended on a soft note for the U.S. economy and that the current quarter will see a notable deceleration in GDP growth, as well.

Overall, even with the presumed weaker close, the first quarter might have produced economic growth of close to 3%. Increasingly, however, the second three months of this year seem as though they will generate growth of less than 2%, and perhaps a good deal less.

To add weight to these concerns, gold continues to plummet, and is off by about $100 an ounce this morning, and is now passing hands at below $1,400 an ounce, amid signs that the 12-year bull run for this precious commodity may be at an end. Oil futures, too, are plunging, with crude selling for below $89 a barrel in New York this morning.

The latest worry, which is taking down both oil and gold, and which is pressuring the shares of several beleaguered basic materials stocks in the pre-market this morning, is a report issued earlier today, showing that economic growth in China is now slowing again. To wit, the world's second-largest economy noted that its GDP growth in the first quarter had eased to an annualized rate of 7.7%. Now, in a world that often sees growth of less than half that magnitude, such a gain should not spark much alarm. However, that figure was still down from the fourth-quarter growth rate of 7.9% and from expectations of an 8.0% rise. This weaker showing has put the trio of Alcoa (AAFree Alcoa Stock Report), Cliff Natural Resources (CLF), and U.S. Steel (X) under additional pressure in the pre-market.

In addition to these worries, the week ahead will see a succession of business reports that could well have an influence on trading on our shores, starting tomorrow with reports on consumer prices, housing starts, industrial production, and factory utilization. Then, later in the week, we will get data on jobless claims, the leading indicators, and manufacturing in the greater Philadelphia area. In between, the Federal Reserve will issue its Beige Book economic summation on Wednesday afternoon.

Finally, there will be a major parade of earnings reports this week, including data on close to a dozen companies whose stocks are domiciled in the Dow Jones Industrial Average.

As to the stock market, the equity futures are now moderately lower on those concerns about growth in China and the United States, and about what the earnings releases will contain, setting up a likely weaker start when bulls and the bears get down to business in a bit less than a half hour from now. – Harvey S. Katz

At the time of this article's writing, the author did not have positions in any of the companies mentioned.