Wall St slumps on Japan worries Published 10:22 PM, 14 Mar 2011 Last update 7:43 AM, 15 Mar 2011
Reuters
NEW YORK - US stocks fell in the aftermath of Japan's devastating earthquake on Monday, but other than specific industries such as nuclear power, the broad impact on equities was expected to be short-lived.
Trading volume was unusually low when compared to other selloffs, coming in at 7.54 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, lower than last year's daily average of 8.47 billion. The recent pullback in stocks had been accompanied by high volume.
"I'm encouraged that we're seeing lighter volume on a down day since that could suggest less enthusiasm for selling," chief executive of Waddell & Reed Financial Inc in Overland Park, Kansas, which manages $US90 billion in assets Hank Herrmann said.
Nuclear power stocks fell after explosions at a Japanese plant. The Market Vectors uranium and nuclear energy exchange traded fund slumped 12 per cent while the Global X Uranium ETF sank 17 per cent.
But the Market Vectors Solar Energy ETF of alternative energy shares climbed 7.2 per cent.
General Electric Co , which has combined nuclear ventures with Hitachi Ltd, dropped 2.2 per cent to $US19.92 and was the top percentage decliner on the Dow.
"This is a knee-jerk reaction, but it could put a lid on building new nuclear plants," chief investment officer at PNC Wealth Management in Philadelphia, which oversees $US105 billion, James Dunigan said.
Japanese ports handling about seven per cent of the country's industrial output sustained major damage, disrupting the flow of goods globally.
US-listed shares of Japanese companies declined and the BNY Mellon index of leading Japanese American Depositary Receipts lost 5.3 per cent.
Toyota Motor Co , which said it would suspend production at all its Japanese car plants, fell 4.6 per cent to $US81.73. The iShares MSCI Japan index exchange traded fund sank seven per cent.
The US benchmark Standard & Poor's 500 index came off the session's bottom after falling to a six-week low. The CBOE volatility index, which measures anticipated volatility, jumped 5.6 per cent.
Shares of luxury goods companies worldwide were hit since Japan accounts for 11 per cent of global luxury sales.
Tiffany dropped 5.3 per cent to $US59.86 while Coach Inc was off 5.3 per cent to $US53.11.
Aflac Inc , the largest foreign insurer in Japan, fell three per cent to $US53.90 as experts estimated that the devastating earthquake in Japan could cost the insurance industry nearly $US35 billion.
Options activity showed some investors are expecting the stock to plunge more than eight percent from the current price to about $US49 by April expiration, according to Caitlin Duffy, options strategist at Interactive Brokers Group.
Apple Inc rose 0.5 per cent to $US353.56 after analysts estimated the company sold close to one million units of iPad 2, its next-generation tablet computer, during the product's debut weekend.
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XJO - This chart really does look ordinary now but imo the the low could be in here (keeping in mind that yesterday's low of 4564 was 13 points higher than the Nov 2010 low of 4551), plenty of resistance left above will make it hard to see a big recovery rally imo but a visit back to the yellow ascending trendline above is a possibility in the st imo (approx 4750 - 4800 depending on when/if it gets hit).
