Markets Lower, Closing News 3/5/12

Markets were under pressure all day but recovered off their lows as China decreased its growth outlook and renewed concerns over a European recession weighed on stocks today.

China reduced its 2012 GDP growth target to 7.5%, which is an 8-year low. Premier Wen Jiabao plans on focusing on boosting consumer demand.  The Eurozone Composite PMI for February was revised down to 49.3, from 49.7, and lower than the 50.4 reading in January; Italian and Spanish business results were a primary drag on the PMI results while slower growth in Germany and static change in France did little to alleviate concerns over a potential recession in the region.  Of additional concern, as Greece tries to affect a deal to halve the value of their debt holdings, the country is expected to deploy "collective action clauses", or CACs, to compel those who decline the offer to take a loss as well.

The ISM Non-Manufacturing index came in at 57.3 vs. the expected 56.0, signaling continued growth in the U.S. service-sector companies that make up the bulk of the U.S. economy.

President Obama and Israeli Prime Minister Netanyahu are having difficulty finding common ground in their stance against Iran as the country continues to develop its nuclear weapons program.  Netanyahu does not seem amenable to back away from possible military action as he believes he is doing what he needs to do to protect his country while Obama urges Netanyahu to allow sanctions and diplomacy to make some headway.

Oil first fell on the concern that slower Chinese growth would mean lower demand for fuel; however Iranian tensions enabled a recovery in oil prices.

An interesting factoid...December 28th was the last triple digit loss for the Dow.

Market Indices/Statistics:

  • Dow closed down 14.76 pts/-0.11% to 12,962.81

  • S&P closed down 5.30 pts/-0.39% to 1,364.33

  • Nasdaq closed down 25.71 pts/-0.86% to 2,950.48

  • 14 of the 30 Dow stocks closed higher

  • 3 of the 10 S&P 500 sectors closed up

  • Consumer Staples was the most positive sector (+0.47%);  Materials was the most declining sector (-1.60%)

  • The VIX was up 0.76 to 18.05

  • Oil is up $0.35 to $107.05

  • Nat Gas is down $0.129 to $2.471

  • Gold is down $2.50 to $1,707.30

  • Euro vs. Dollar is up $0.0002 to $1.3219

  • Dollar vs. Yen is down $0.04 to $81.56

Companies in the News:

International Business Machines (IBM,+$1.85/+0.9% to $200.66) reached an intraday all time high of $201.19.  Today, Citigroup announced that it has entered into an agreement with IBM whereby Citigroup will explore uses for the deep content analysis and evidence based learning capabilities offered in IBM Watson.

Leap Wireless (LEAP, -$0.79/-7.5% to $9.76) shares were under pressure after a Bernstein analyst cut his rating from outperform to market perform commenting that takeover bids for the company would be challenging.

Mollycorp (MCP, +$1.01/+4.1% to $25.56) shares closed higher after a Morgan Stanley analyst commented that a 25% reduction in rare earth prices may trigger a recovery as demand picks up due to the lower prices.

Pandora Media (P, +$0.76/+5.5% to $14.66) shares were up after Stifel raised its ratings on the company from hold to buy citing the attractiveness of the company’s smartphone and tablet applications which the analyst believes will draw ad dollars as the company expands its sales force in major markets.  Earnings are expected tomorrow.

Yahoo (YHOO, -$0.09/-0.6% to $14.62 shares were turbulent today after reports ran that the company is planning a major restructuring which would include layoffs probably in the thousands.

Coming Tuesday:

Economic Reports: None  Earnings:  Dick's Sporting Goods Inc. (est: $0.88), Kronos Worldwide Inc. (est: $0.5), Vail Resorts Inc. (est: $1.44), Pandora Media Inc. (est: $-0.02)