Stock Market Update: Stocks Slide on Light Volume
Dow -78.41 at 10751.27, Nasdaq -26.23 at 2344.52, S&P -9.21 at 1137.03
[] Broad-based selling dropped stocks for sizable losses Monday. The slide found support at last week’s lows, though.
Action was a bit choppy in the early going, but with neither concerted nor clear leadership sellers were able to claim control. Materials stocks were hit with the worst – they dropped 1.4% as steel stocks sank 2.4% and shares of diversified metals and miners dropped 2.1%.
Tech stocks were among the heaviest drags, though, given that the tech is the heaviest by market weight. Its 1.1% loss was largely due to weakness in semiconductor stocks (-1.6%) and semiconductor equipment stocks (-1.9%).
Financials had shown early strength, but faltered as the broader market began to roll over. It ended the day 0.7% lower with considerable weakness in shares of American Express (AXP 39.09, -2.73), which will challenge an antitrust lawsuit by the government. Shares of AXP endured their worst single-session slide since January to settle at their lowest level in three months. Visa (V 73.24, -0.08) and MasterCard (MA 222.64, -2.14) both plan to settle, but each saw its shares settle lower.
The rest of the day’s headlines revolved around merger and acquisition activity, which included news that Sanofi-Aventis (SNY 32.87, -0.25) offered to acquire Genzyme (GENZ 71.01, +0.13) for $69 per share, Microsemi (MSCC 18.30, +1.19) will pay $20.88 for each share of Actel (ACTL 20.95, +4.93), and Dynamex (DDMX 21.05, +5.74) will be acquired by Greenbriar Equity for $21.25 per share. Sara Lee (SLE 14.40, +0.97) allegedly rejected a takeover bid from KKR.
There was only a light dose of data today. It didn’t do much for traders.
Factory orders for August fell 0.5%, which is a bit steeper than the 0.4% decline that had been expected. Orders for the prior month were revised higher to reflect a 0.5% increase.
Pending home sales increased a stronger-than-expected 4.3% month-over-month. The consensus among economists polled by had called for just a 1.0% increase. Data for the prior month was revised downward to reflect a 4.5% increase, though.
Despite weakness in the stock market, Treasuries really didn’t get much support. The benchmark 10-year Note finished up just nine ticks and the 30-year Bond edged just four ticks higher. Their yields now stand just below 2.48% and 3.71%, respectively.
Lackluster trading volume resumed as fewer than a billion shares were traded on the NYSE. The lack of participation suggests that their may not have been much belief in the stock market’s mover lower. To be fair, though, share volume was anemic all the way up to the stock market’s multi-month highs, which were set just last week.
Advancing Sectors: (None)Declining Sectors: Materials (-1.4%), Energy (-1.1%), Tech (-1.1%), Industrials (-1.1%), Health Care (-1.0%), Financials (-0.7%), Consumer Staples (-0.4%), Utilities (-0.3%), Consumer Discretionary (-0.2%)Unchanged: Telecom
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