[BRIEFING.COM] What was shaping up to be a respectable bounce in the aftermath of yesterday's broad-based drubbing lost steam going into the close, as many of the market leaders behind this year's early stock rally succumbed to even more aggressive profit-taking.
Before the bell, a sense that Wednesday's CPI-induced sell-off was overdone renewed some enthusiasm for stocks and even helped bonds regain some noticeable upside momentum. To wit, the yield on the 10-yr note fell 8 basis points to 5.06% after Richmond Fed President Jeffrey Lacker told reporters that, "containing inflation has to be the [Fed's] primary focus." Nevertheless, the rate-sensitive Financial sector's failure to take advantage of a welcomed decline in borrowing costs merely exacerbated lingering concerns about building inflationary pressures slowing economic expansion and potentially ending 11 straight quarters of double-digit profit growth. Energy's inability to take advantage of a 1.1% rebound in the price of crude also added to the market's apprehension and growing realization that Energy sector profits are unlikely to increase at the same pace as over the past year. Adding to today's struggles to keep sellers on the sidelines for the first time in several sessions was the inability by the Dow, S&P and Nasdaq to find support above key technical levels of 11174, 1267 and 2189, respectively.
The Dow initially found some modest support from Home Depot (HD 38.41 +0.40), which expanded its stock buyback program by $2.0 bln, and Hewlett-Packard (HPQ 32.48 +0.32), which was upgraded by Morgan Stanley. However, the temptation to lock in more gains, especially from three of the biggest reasons the Dow flirted with all-time highs last week -- Boeing (BA 82.73 -1.04), Caterpillar (CAT 74.62 -1.29) and United Technologies (UTX 62.66 -1.09) -- weighed heavily on the price-weighted index.
The Nasdaq got an early boost from Dell (DELL 23.95 +0.32), ahead of its Q1 report after the bell, Sears Holdings (SHLD 155.85 +17.89), which handily topped analysts' forecasts, and the chance that an unwinding of the excess optimism that had pushed the tech-heavy index into negative territory a day earlier might be over. In the end, though, bargain hunters were outnumbered as the Composite extended its losing streak to 8 straight days. NYSE Adv/Dec 1219/2014...Nasdaq Adv/Dec 1147/1895
DOW Price at posting:
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