Dow Tries to Hold Gains; Nasdaq Falls 1% as Biotechs Plunge Over 6%

© Provided by CNBC
© Provided by CNBC

U.S. stocks traded in a narrow range Tuesday, attempting to extend a sharp two-day rally, as investors awaited the official beginning of third-quarter earnings season.

The Nasdaq composite was the biggest decliner, falling over 1 percent in late-morning trading as the iShares Nasdaq Biotechnology ETF (IBB) fell more than 6 percent.

“We saw this dynamic yesterday,” said Art Hogan, chief market strategist at Wunderlich Securities. “If you look at the IBB, it hit support at $291 and saw resistance at $314.”

The Dow Jones industrial average attempted to hold slight gains after a mildly lower open, with UnitedHealth weighing the most on the index. DuPont rose more than 10 percent to contribute the most to to gains.

Materials and energy advanced more than 1 percent as the greatest advancers on the S&P 500, which briefly attempted slight gains.

After the close Monday, the chemical company’s chairman and Chief Executive Officer Ellen Kullman announced plans to retire October 16. Director Edward Breen will serve as interim chairman and CEO. DuPont also cut its outlook for the year and announced an acceleration of its plans to trim expenses.

“Obviously after two strong days of back-to-back gains a little profit taking is the order of the day,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “Any further strengthening in oil could propel stocks higher.”

Crude oil gained over 3 percent to hold above $48 a barrel, while Brent topped $51 a barrel.

“It will be a combination of preparing for earnings and what we’ll see for the next few quarters,” said Peter Boockvar, chief market analyst at The Lindsey Group.

He doesn’t think the bottom has been put into the stock market yet. “Even with the rally of substance we’re still below the major moving averages. The global growth story is weaker,” Boockvar said.

The International Monetary Fund trimmed its global growth forecast for 2015 from 3.3 percent to 3.1 percent, citing weaker growth prospects for emerging economies.

The S&P, Nasdaq and Russell 2000 are trading below their 50-day moving averages. The Dow held above its 50-day moving average but has not closed above it since July 20.

The Dow transports closed above their 50-day moving average of 8.053.46 Monday for the first time since Sept. 17 but traded below that level Tuesday morning.

Before the opening bell, PepsiCo reporting earnings that beat on both the top and bottom line. The firm also raised its full-year growth target. Shares of Pepsi gained more than 1.5 percent in morning trade.

Yum Brands is scheduled to report after the close. The unofficial start to earnings season comes Thursday with Alcoa’s earnings after the bell. The bulk of third-quarter earnings reports come in the next few weeks.

Nick Raich, CEO of The Earnings Scout, said that of the 20 S&P 500 companies that have reported so far, 85 percent have beat on earnings and 60 percent have beat on revenue.

“It’s only 20 companies but it’s an encouraging start to earnings season,” he said. It’s “a lot of consumer companies. We have yet to see a financial company or an earnings company report. … Those are going to drag down the overall earnings.”

Financials will likely see some pressure from the low interest rate environment, Raich said, while energy companies continue to face headwinds from low oil prices.

On the data front, the August trade deficit came in at $48.3 billion, the widest in five months.

Treasury yields spiked before holding lower, with the 10-year at 2.04 percent and the 2-year at 0.60 percent in late-morning trade.

The dollar held lower, with the euro at $1.12 and the yen at 120.18 yen against the greenback.

U.S. stocks closed more than 1.5 percent higher Monday, extending Friday’s surprise intraday reversal, as investors digested the implications of the jobs data on the timing of a rate hike and awaited quarterly earnings.

While some analysts said the gains were a technical bounce from correction levels, others said the weaker-than-expected jobs report led to expectations of lower rates for longer. After the monthly nonfarm payrolls report, Fed funds futures were pricing in expectations that the first rate hike will come no earlier than March 2016.

All three major averages closed Monday within 10 percent of their 52-week highs, or out of correction territory. The Russell 2000 remained in correction mode.

“There’s a good possibility as the first few earnings begin to creep in we could approach 2,000 (on the S&P 500) and cross above that,” Cardillo said.

In Europe, stocks traded slightly higher on Tuesday following Monday’s rebound, after poor industrial data out of Germany.

In Asia, the Nikkei closed 1 percent higher as investors digested news of agreement on the historic Trans-Pacific Partnership and awaited the outcome of the Bank of Japan’s policy meeting Wednesday. The Trans-Pacific Partnership trade deal among the United States, Japan and 10 other Pacific Rim countries still needs approval from the U.S. Congress.

In mid-morning trade, the Dow Jones Industrial Average fell 20 points, or 0.12 percent, at 16,756, with UnitedHealth leading deliners and DuPont leading advancers.

The S&P 500 traded down 11 points, or 0.6 percent, at 1,975, with health care leading seven sectors lower and energy leading advancers.

The Nasdaq traded down 59 points, or 1.24 percent, at 4,721.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 19.93.

Decliners and advancers were about even on the New York Stock Exchange, with an exchange volume of 373 million and a composite volume of 1.722 billion in early afternoon trade.

Crude oil futures for November delivery gained $1.91 to $48.16 a barrel on the New York Mercantile Exchange. Gold futures rose $12.70 to $1,150.30 an ounce as of 11:09 a.m.

Written by Evelyn Cheng of CNBC

(Source: CNBC)

Dow Closes Down Nearly 300 Points as Fed Shakes Markets

Provided by CNBC
Provided by CNBC

Stocks closed sharply lower Friday as investors weighed concerns over the implications of the Federal Reserve’s decision to keep short-term interest rates unchanged.

“The signaling by the Fed yesterday, (that it) doesn’t see confidence to pull the trigger to raise from zero to 25 basis points, I think is negative sentiment that’s hitting the market,” said Art Hogan, chief market strategist at Wunderlich Securities.

“I think they’ve done more harm than good,” he said.

Analysts also noted Friday trading would likely see more volatility due to quadruple witching, the expiration of three related classes of options and futures contracts, as well as individual stock futures options.

The Dow Jones industrial average and S&P 500 closed down more than 1.5 percent, mildly negative for the week. The Nasdaq composite was off about 1.4 percent on the day and eked out a 0.1 percent gain for the week.

The Dow closed in correction territory, or more than 10 percent off its 52-week high. The S&P 500 and Nasdaq composite are about 8 percent below their 52-week highs.

“You may start seeing some crazier-than-usual moves at the end of the day,” said JJ Kinahan, chief strategist at TD Ameritrade, adding that Friday’s move lower also shows an allocation shift from stocks to bonds.

Treasury yields extended Thursday’s decline, with 10-year note yields trading around 2.13 percent, while two-year yields traded around 0.68 percent.

“We opened down in concert with the rest of the world,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

The pan-European Stoxx 600 index closed down 1.8 percent lower as investors digested the Fed’s decision, while the German DAX shed 3 percent, putting it just shy of bear marker territory. About midway through the London trading session, a “fat finger” incident caused the FTSE 100 index to briefly fall 2 percent before closing down about 1 percent.

The Federal Reserve held its key federal funds rate unchanged after the conclusion of its two-day policy meeting Thursday. September was supposed to be the month the U.S. central bank finally came off its zero interest rate policy, but instead it opted to hold steady for at least one more month.

“There’s just a lot of uncertainty right now,” said Scott Brown, chief economist at Raymond James, adding that the timing of a Fed rate hike shouldn’t matter, “but it does for some reason.”

During a press conference after the announcement, Federal Reserve Chair Janet Yellen stressed the path of the Fed’s first rate hike in nearly a decade is more important than its timing.

“The only sliver of hope, post that announcement she left open the door that they could raise rates at a non-press conference meeting,” Hogan said.

Other analysts thought the Fed should not have raised rates, given the global economic environment. Fed funds futures had indicated only about 20 to 30 percent of a chance the Fed would hike in September.

“The people betting real money never expected the Fed to do anything yesterday,” said Nick Raich, CEO of The Earnings Scout. “Ultimately, the Fed did the right thing by holding.”

He noted there were some who thought “if the Fed did not hike, oh my goodness, what do they know, what’s so bad in the economy that we don’t know.”

Odds have also risen that the Fed will now not hike rates until 2016, and RBS says the markets are currently pricing the first full rate rise for March but odds for December were still above 60 percent.

The central bank added to recent Wall Street concerns about the impact of sluggish global growth. In its statement, the Fed said that “recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.”

China’s surprise devaluation of the yuan in mid-August raised concerns about further slowdown in the world’s second-largest economy and was a factor behind the recent correction in U.S. stocks.

The Fed “said that the U.S. economy is doing OK but they are concerned the global economic turmoil, weakness in China, could have a negative impact on the U.S. economy,” said Stuart Hoffman, chief economist at PNC.

“Clearly they’ve given up on any acceleration in the U.S. economy in the second half of this year compared to the first half this year,” he said.

In Asia, the Shanghai Composite index closed up 0.42 percent, while Japan’s Nikkei finished 1.96 percent lower.

As of 2:57 p.m., the iShares MSCI Emerging Markets ETF (EEM) traded about 1.5 percent lower, after a 2 percent intraday spike and plunge Thursday.

“It’s certainly this fear factor which might intensify over the next several weeks (with the continued) Fed debate over interest rates,” said Peter Cardillo, chief market economist at Rockwell Global Capital.

Gold futures settled up $20.80 at $1,137.80 an ounce.

The U.S. dollar traded a touch higher against major world currencies, with the euro below $1.14 and the yen at 119.8 yen against the greenback. The dollar traded about 0.1 percent lower against the Mexican Peso.

Crude oil futures for October delivery settled down $2.22, or 4.73 percent, at $44.68 a barrel.

No significant earnings were due Friday. On the data front, leading indicators for August rose 0.1 percent, below the expected 0.2 percent gain.

The CBOE Volatility index (VIX) considered the best gauge of fear in the market, traded above 22, up about 5.8 percent.

About two stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 818 million and a composite volume of about 2.68 billion as of 2:30 p.m.

High-frequency trading accounted for 49 percent of this month’s trading volume of about 6.9 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.

Written by Evelyn Cheng of CNBC

(Source: CNBC)

Weekly Market Commentary: September 7, 2015

Provided by geralt/Pixabay
Provided by geralt/Pixabay

Who’s the culprit?

Speculating on who or what is to blame for recent market weakness is a popular pastime right now. Last week, Barron’s said the search for someone to blame is a lot like a game of Clue. So far, the most common conclusions are “the People’s Bank of China with a devalued currency in Beijing,” and “Janet Yellen with a potential interest-rate hike in Washington.”

The article pointed out those theories might be flawed. After all, China’s slowdown wasn’t a surprise. Analysts have been factoring slower growth into their calculations for some time. U.S. rate hikes are highly anticipated and, even though some fear they could tip the American economy into recession (and argue recent stock price movement supports the claim), relatively strong economic data casts doubt on the idea. Some analysts believe the stock market can help predict where a country’s economy is headed. A significant drop in stock prices could be indicative of a future recession and a significant increase could suggest future economic growth.

So, why have markets headed south? Barron’s offered an alternative answer: Investors with volatility trading strategies (and/or a case of nerves) across the globe. The article pointed out the CBOE Volatility Index (VIX), a.k.a. the fear gauge, popped from a low of 13 to a high of 53 between August 18 and August 24:

“That’s higher than when Standard & Poor’s cut the credit rating of the United States in 2011, or at the peak of the European debt crisis in 2010, and seems extreme given the evidence. But volatility isn’t simply a measure of fear. It has been used to manage risk in portfolios that employ sophisticated trading schemes… Although each type of fund adjusts to market changes at a different speed, they all respond in the same way – by selling stocks… Don’t just blame the professionals. For months now, there have been warnings about overcrowding in the market’s best-performing stocks. And, when the market started to tumble in August, these stocks were among the hardest hit…”

So, who caused the market downturn? Take your pick.

Data as of 9/4/15 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -3.4% -6.7% -3.8% 11.0% 12.0% 4.5%
Dow Jones Global ex-U.S. -4.1 -8.8 -17.0 2.3 1.0 1.0
10-year Treasury Note (Yield Only) 2.1 NA 2.5 1.6 2.6 4.1
Gold (per ounce) -1.5 -6.8 -12.1 -13.0 -2.2 9.6
Bloomberg Commodity Index -1.0 -15.2 -29.0 -15.5 -8.2 -6.4
DJ Equity All REIT Total Return Index -4.6 -9.0 -3.0 6.5 10.6 6.0

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Dow Closes Down Nearly 600 points After Another Wild Ride on Wall Street

ToonariPost/Flickr
ToonariPost/Flickr

Stocks plunged on Monday, closing off session lows in high volume trade as fears of slowing growth in China pressured global markets.

“I think we probably rallied too fast. A lot of people that covered their shorts got their shorts covered,” said Peter Coleman, head trader at Convergex. He noted the Dow was still trading several hundred points off session lows and that a close better than 500 points lower would be a good sign.

“The market’s going to be focused on China tonight to see if they come on tonight with something that would be considered a viable (way) to stimulate growth in that economy,” said Quincy Krosby, market strategist at Prudential Financial.

The Dow Jones industrial average traded in wide range of between roughly 300 to 700 points lower in the minutes leading up to the close, ending down 588 points.

In the open, the index fell as much as 1,089 points, making Monday’s move its biggest intraday swing in history. In midday trade, the index pared losses to trade about 110 points lower.

During the first 90 minutes of trade, the index traveled more than 3,000 points in down and up moves.

The S&P 500 traded about 70 points lower as the tech sector failed to hold slight gains.

The index briefly lost 100 points in the open, initially joining the other major averages in correction territory before trading right on the edge.

“I’m hoping for some stability here but I think markets remain very, very vulnerable to bad news (out of) emerging markets,” said Dan Veru, chief investment officer at Palisade Capital Management.

He attributed some of the sharp opening losses to exchange-traded funds. “It’s so easy to move a bajillion dollars in a nanosecond.”

Trading in stocks and exchange-traded funds was paused more than 1,200 times on Monday, Dow Jones said, citing exchanges. Such pauses total single digits on a normal day, the report said. An increase or decline of five percent or more triggers a five-minute pause in trading, Dow Jones said.

The major averages came sharply off lows in midday trade, with the Nasdaq off as low as less than half a percent after earlier falling 8.8 percent. Apple traded more than 1.5 percent lower after reversing losses to briefly jump more than 2 percent.

“There was sort of a lack of follow-through after the morning’s crazy action in the overall market,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “The selling really dissipated once we got to around 10 o’clock.”

He attributed some of the late morning gains to a short squeeze and bargain hunting.

Art Hogan, chief market strategist at Wunderlich Securities, noted that the sharp opening losses were due to great uncertainty among traders and the implementation of a rare market rule.

The New York Stock Exchange invoked Rule 48 for the Monday stock market open, Dow Jones reported.

The rule allows NYSE to open stocks without indications. “It was set up for situations like this,” Hogan said. The rule was last used in the financial crisis.

Stock index futures for several major indices fell several percentage points before the open to hit limit down levels.

Circuit breakers for the S&P 500 will halt trade when the index decreases from its previous close by the following three levels: 7 percent, 13 percent, and 20 percent.

“Fear has taken over. The market topped out last week,” said Adam Sarhan, CEO of Sarhan Capital. “We saw important technical levels break last week. Huge shift in investor psychology.”

“The market is not falling on actual facets of a sub-prime situation. It’s falling on fear of the unload of China. That’s really behind this move,” said Peter Cardillo, chief market economist at Rockwell Global Capital.

The CBOE Volatility Index (VIX), considered the best gauge of fear in the market, traded near 40. Earlier in the session the index leaped above 50 for the first time since February 2009.

“When the VIX is this high it means there’s some panic out there,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab.

However, he said with stocks more than halving losses he “wouldn’t be surprised if we closed positive.” “If you could move it that far you could move it another 350 points” on the Dow,” he said.

Overseas, European stocks plunged, with the STOXX Europe 600 down more than 5 percent, while the Shanghai Composite dropped 8.5 percent, its greatest one-day drop since 2007.

Treasury yields came off session lows, with the U.S. 10-year yield at 2.01 percent and the 2-year yield at 0.58 percent.

The U.S. dollar fell more than 1.5 percent against major world currencies, with the euro near $1.16 and the yen stronger at 119 yen versus the greenback.

A U.S. Treasury Department spokesperson said in a statement that “We do not comment on day-to-day market developments. As always, the Treasury Department is monitoring ongoing market developments and is in regular communication with its regulatory partners and market participants.”

The Dow Jones industrial average traded down 369 points, or 2.2 percent, at 16,092, with UnitedHealth leading nearly all blue chips lower and Intel the only advancer.

The S&P 500 traded down 50 points, or 2.5 percent, at 1,920, with energy leading all sectors lower.

The Nasdaq Composite traded 104 points, or 2.2 percent, at 4,602.

The Dow transports traded about 2.5 percent lower to approach bear market territory.

About 10 stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 901 million and a composite volume of 4 billion as of 2:05 p.m.

Crude oil futures settled down $2.21, or 5.46 percent, at $38.24 a barrel, the lowest since February 2009. In intraday trade, crude oil futures for October delivery fell as much as $2.70 to $37.75 a barrel, a six-and-a-half-year low.

Gold futures settled down $6.10 at $1,153.60 an ounce.

No major economic data or earnings releases were due Monday.

Atlanta Fed President Dennis Lockhart said he expects a rate hike this year and did not repeat a September call.

Written by Evelyn Cheng of CNBC

(Source: MSN)

Dow Plunges on Worries About Slowing Global Growth

Provided by thetaxhaven/Flickr
Provided by thetaxhaven/Flickr

U.S. stocks closed deep in the red on Friday as global growth concerns accelerated selling pressure to push the Dow into correction territory.

The Dow Jones industrial average fell more than 500 points, into correction territory for the first time since 2011 as all blue chips declined. In the last five years, the index has only had four instances with closing losses of more than 400 points.

“For investors the momentum and the drive of the market is now lower (than) it used to be because there’s no place to hide,” said Lance Roberts, general partner at STA Wealth Management. “Every time we hit the major technical points we kept selling.”

A traders noted that investors stopped looking at technicals and were plowing through them.

“It’s an expiration day and it looks like they’re to have for sale on the close maybe as much as a billion dollars,” said Art Cashin, director of floor trading for UBS.

The Nasdaq Composite lost more than 3 percent, also closing in correction territory and joining the other major averages in negative territory for the year.

Apple lost about 6 percent, into bear market territory, and the iShares Nasdaq Biotechnology ETF (IBB) plunged 2.5 percent.

“Right now there is a feeling of fear in the marketplace and all news is interpreted negatively and it’s interpreted indiscriminately,” said Tom Digenan, head of U.S. equities as UBS Global Asset Management.

The S&P 500 fell through support levels to fall below 2,000 and 1,980, off more than 6 percent from its 52-week high. The index is off more than 2.5 percent for the year so far. All 10 sectors of the index declined.

As of Friday morning, 28 percent of the S&P 500 was in a bear market.

“It’s more of the same,” said Peter Boockvar, chief market analyst at The Lindsey Group. “From a technical perspective we broke” 2,040 on the S&P 500, the lower end of the trading range.

The Russell 2000 attempted slight gains after dipping into correction territory.

The major averages approached correction territory and on track for their worst week since 2011. Earlier, the averages briefly attempted to halve losses in mid-morning trade.

“I think uncertainty about China (and) general negativity is weighing on the market. There’s a lack of positive economic news to motivate buyers,” said David Kelly, chief global strategist at JPMorgan Funds. He noted “there’s nothing particularly negative in the U.S. economic outlook.”

Oil reversed Thursday’s late gains to briefly fall below $40 a barrel to $39.86 for the first time since March 2009.

Crude oil futures for October delivery settled down 87 cents, or 2.11 percent, at $40.45 a barrel on the New York Mercantile Exchange. Gold futures for December delivery settled up $6.40 at $1,159.60 an ounce.

“Earnings season has kind of wound down so the Chinese macro story takes on a bit more of importance than it should,” said David Lafferty, chief market strategist at Natixis Global Asset Management.

“We’ve probably had a bit of a healthy transition here,” he said, noting how bad news is mostly interpreted as bad news rather than good news that keeps the Fed at bay.

In addition to concerns over slowing global growth, analysts also noted some uncertainty over the timing of a rate hike.

“The Fed has created such a mixed message that people don’t know what to do with their money,” said JJ Kinahan, chief strategist at TD Ameritrade. “That makes (it) very difficult to figure out who are the winners and losers for the fourth quarter. People are taking money out of the market.”

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded above 26.

The index is up more than 37 percent on the day and up more than 100 percent month-to-date for August, on track for its largest monthly gain since 1990.

Earlier in the day, Kinahan said investors should start paying attention now that the VIX is above 20, and that anything over 25 indicates “true fear.”

Still, “we’re coming off such a quiet market, sometimes there’s an overreaction,” he said.

Peter Cardillo, chief market economist at Rockwell Global Capital, noted some volatility due to options expirations.

“At one point or another you’re going to see some bottom fishing,” he said. “Again, the trend for now is lower.”

CNBC’s Peter Schacknow contributed to this report

Written by Evelyn Cheng of CNBC

(Source: CNBC)

Stocks Slump Amid Oil Losses, Ahead of Key Jobs Report

Provided by KlipGame/Wikimedia
Provided by KlipGame/Wikimedia

Stocks fell nearly 1 percent or more Thursday as renewed declines in oil weighed on investor sentiment amid a slew of earnings releases and Friday’s key employment report.

“There’s nervousness among momentum investors caused by some of the outperforming names either missing or giving cautious comments in earnings reports,” said Robert Pavlik, chief market strategist at Boston Private Wealth.

“I don’t think much of it is warranted,” he said, noting some profit-taking.

The major averages came off session lows after extending losses in midday trade as the S&P 500 broke through a key level of 2,087 that many analysts were watching.

Art Cashin, director of floor operations at UBS, said the next level of support is 2,063 to 2,067.

Consumer discretionary briefly fell about 2 percent as one of the greatest decliners in the S&P 500, weighed by media stocks.

At its lows the media sector was off about 11 percent for the week, on track for its worst week since October 2008, when it lost 21.87 percent.

The Nasdaq briefly fell 2 percent as biotech losses accelerated and Apple briefly turned negative. The iShares Nasdaq biotechnology ETF (IBB) fell more than 3.5 percent.

The Dow Jones industrial average traded about 120 points lower, after falling as much as 177 points. The index is on track to close at its lowest level in 6 months and post its first six-day losing streak since October. Disney traded about 3.5 percent lower, off an earlier 5.5 percent decline, while Nike fell nearly 2 percent.

“You’ve got some nervousness ahead of the jobs report, lack of a bullish impetus, narrowing leadership,” said Adam Sarhan, CEO of Sarhan Capital. “The market continues to get weaker, not stronger.”

He is watching 2,040 on the S&P 500. “Right now there’re less and less bullish drivers and concurrently more bearish drivers,” Sarhan said. “If support breaks there’s no question on my mind (that we get a correction).”

“Market participants are really groping for a new catalyst to move stocks higher,” said Marc Luschini, chief investment strategist at Janney Montgomery Scott. “There’s still some questions on the economy, the pace of growth.”

He noted there were few indications that the market was strongly concerned about an interest rate hike, as bond yields held lower, the dollar was flat, and gold traded a touch higher.

Economists expect 223,000 nonfarm payrolls on Friday, with unemployment unchanged at 5.3 percent, according to Thomson Reuters.

“I think this (jobs) report is what everyone’s keying on. We’ve kind of got mixed messages in the data this week,” said Chris Gaffney, president of EverBank World Markets.

“I think the key is average hourly earnings and if that comes with a 2 percent increase tomorrow, absolutely September comes into play,” Gaffney said.

“I think the market is really getting anxious about nonfarm payrolls,” said Doug Cote, chief market strategist at Voya Investment Management. “If it’s a moderate number, then (liftoff) could be put off, but if it’s a really big number tomorrow—if unemployment is 5.2 percent—the market struggles a little bit, raise the prospect of a September rate increase.”

Jobs data so far this week was mixed. Initial claims came in Thursday at 270,000, slightly below expectations. The private sector report from ADP showed fewer-than-expected jobs were created.

U.S. job cuts in July exceeded 100,000 for the first time in nearly four years as the military announced plans to reduce troop and civilian workforce payrolls, according to Challenger, Gray & Christmas. A year ago, U.S. companies announced plans to cut 46,887 jobs.

However, the major jump in job cuts is not expected to significantly affect Friday’s key report.

“We think this increase in announced job cuts will have no impact on the July BLS report, and only a minimal impact on the employment data over the next few years. The jump in layoffs announced in July was basically entirely due to reductions announced by the US Army that are scheduled to begin in October and be implemented over the next two years,” JPMorgan said in a morning note.

Oil continued to decline, with WTI crude settling down 49 cents, or 1.09 percent, at $44.66 a barrel. Brent dipped below $48 a barrel.

“I know that a lot of people that are bearish,” said Phil Flynn, energy market analyst at Price Futures Group. “As weak as the market feels right now the onus is on the bears to take out $40 a barrel. Really we’re following a seasonal pattern.”

Many stocks saw outsized moves amid the slew of quarterly reports towards the end of earnings season. About 80 percent of the S&P 500 have reported.

There are “tons of stocks reporting earnings. We’ve had a tough morning because they’ve been volatile,” said Phil Quartuccio, CEO of Illustro Trading. “Earnings (are) surprising on both ends.”

Viacom fell more than 15.5 percent to a multi-year low. The firm matched earnings per share estimates but missed on revenue as advertising sales declined and lack of major movie releases from the firm during the quarter.

21st Century Fox earned an adjusted 39 cents per share for the second quarter, 2 cents above estimates, but revenue missed Street forecasts. The media company also announced a $5 billion stock buyback program.

CBS reported adjusted quarterly profit of 74 cents per share, 2 cents above estimates, with revenue essentially in line. CBS benefited from higher subscription fees and increasing revenue from affiliates.

Disney extended its post-earnings plunge from Wednesday after the firm missed on revenue and disappointed investors with subscriber losses. Year-to-date, the stock is the third-best performer in the Dow.

Art Hogan, chief market strategist at Wunderlich Securities, expects some recovery in media names.

“There’s a lot of wreckage after Disney,” he said. “I think things got overdone.”

In Europe, equities closed lower as crude weighed on sentiment and the Bank of England kept rates unchanged.

Analysts said the central bank’s position could be an indication that the U.S. Federal Reserve also holds off on raising rates.

The dollar traded flat, with the euro above $1.09 and the yen attempting gains against the greenback at 124.6 yen.

Treasury yields held lower, with the 10-year at 2.22 percent and the 2-year at 0.70 percent.

Keurig Green Mountain plunged nearly 30 percent after the firm missed significantly on revenue and sales of its coffee pods fell for the first time ever. The single-serve coffee company also lowered its sales and earnings forecasts and announced it would cut 5 percent of its workforce.

Fitbit reported that its profit margins fell during the second quarter and would likely stay at current levels for the rest of the year. That news has put the fitness tracking device maker’s shares under pressure, despite seeing revenue more than triple during the second quarter compared to a year earlier.

Herbalife reported adjusted quarterly profit of $1.24 per share, 13 cents above estimates, and revenue was slightly above forecasts. The nutritional products company raised its full-year earnings guidance, even as its sales are impacted by a stronger dollar.

Tesla lost 48 cents per share for its latest quarter, smaller than the 60 cents Wall Street was predicting. Revenue was slightly above estimates, but investors are focusing on Tesla’s second cut in its sales forecast in the past year.

Reports from Con Ed, EOG Resources, Wingstop, Lions Gate, Great Plains Energy, Noodles and Co., TrueCar, Zynga and Monster Beverage are all due after the bell.

Mondelez jumped after news that Bill Ackman took at $5.5 billion stake in the snack maker and is considering a pushing for a takeover.

The Dow Jones Industrial Average traded down 126 points, or 0.72 percent, at 17,413, with Disney leading decliners and Chevron the greatest advancer.

The Dow transports briefly fell more than 1 percent as nearly all constituents declined.

The S&P 500 traded down 17 points, or 0.82 percent, at 2,082, with health care leading nine sectors lower and energy the only advancer.

The Nasdaq traded down 83 points, or 1.62 percent, at 5,056.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped above 14.

About two stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 510 million and a composite volume of nearly 2.6 billion in afternoon trade.

Gold futures settled up $4.50 at $1,089.80 an ounce.

Written by Evelyn Cheng of CNBC

(Source: MSN)

Stocks Close Up More than 1% Amid Greece Relief

© Katrina Tuliao, Flickr, Creative Commons
© Katrina Tuliao, Flickr, Creative Commons

U.S. stocks closed more than 1 percent higher in light volume trade Monday, following gains overseas on news of a bailout agreement between Greece and its creditors.

“I think it’s just a sigh of relief that it’s over, but let’s face it, they just kicked the can,” said Maris Ogg, president of Tower Bridge Advisors. “It seems like we kicked the can on a number of fronts. Earnings probably will be front and center int he next couple of weeks.”

About 11 stocks advanced for every 4 decliners on the New York Stock Exchange, with an exchange volume of 571 million and a composite volume of 2.8 billion as of 3:59 p.m. Average volume for the entire day is 3.4 billion.

“You’ve got a relief going on, short covering going on,” said Quincy Krosby, market strategist at Prudential Financial. “What you want for confidence buying is to see a market close with buying orders on the close.”

The Dow Jones industrial average traded about 220 points higher, with Microsoft and DuPont leading most blue chips higher. The index recovered recent losses to trade about 0.80 percent higher for the year.

The Nasdaq Composite jumped 1.5 percent as Apple and the iShares Nasdaq Biotechnology ETF (IBB) rose more than 1.5 percent.

The S&P 500 held near 2,100, led by a rise in information technology stocks and consumer discretionary’s 1.3 percent gain to an all-time high.

The Dow transports also briefly advanced more than 1 percent, with airlines leading gains.

“I think the market’s technically very oversold,” said Bruce Bittles, chief investment strategist at RW Baird. “The market’s poised to go up but to break this trading range (we’ve been in) since January you need to see volume pick up… number of stocks hitting 52-week highs expand.”

He said the S&P 500 breaking past 2,100 would be an encouraging sign.

European Council President Donald Tusk said early on Monday that euro zone leaders reached an unanimous agreement with Greece after all-night talks in Brussels to move forward with a bailout loan for the cash-strapped nation, provided Athens implement tough reforms.

“The jury’s still out on whether or not this is going to be accomplished,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

To receive this third bailout, Greece’s parliament must pass the new rules in areas such as privatization, labor laws and pension reforms by Wednesday. The 86 billion euro ($95.2 billion) in funds would come over three years.

In the meantime, euro zone finance ministers were expected to discuss Monday how to keep Greece financed before the bailout deal is reached. Athens faces a 7 billion euro repayment deadline on July 20 to the European Central Bank.

The ECB announced it maintains the emergency assistance cap for Greek banks, which will remain closed for at least two more days.

The Dow Jones industrial average futures were about 140 points higher before the open.

European stocks jumped on news of the conditional Greece deal, with the German DAX up about 1.5 percent and the STOXX Europe 600 up nearly 2 percent

In Asia, stocks surged with the Nikkei up 1.57 percent and the Shanghai Composite leaping 2.4 percent as it extended a recovery from a recent plunge.

Art Hogan, chief market strategist at Wunderlich Securities, said the domestic response will likely be less exuberant since the major averages ended last week little changed. Only the Dow eked out a gain, of a mere 0.17 percent.

Stocks rose slightly past their opening levels, while bond yields held steady. The U.S. 10-year note yield was 2.44percent and the 2-year held near 0.67 percent. The German 10-year bund yield fell to 0.85 percent.

The U.S. dollar extended gains with the euro dipping below $1.10.

Also in focus is the Iranian nuclear deal, which would allow more oil exports. Talks on a deal were extended past a June 30 deadline and are expected to reach a conclusion Monday.

Crude oil futures settled down 54 cents, or 1.02 percent, at $52.20 a barrel on the New York Mercantile Exchange. Gold futures fell $1.70 to $1,156.20 an ounce in afternoon trade.

No economic data or earnings of note were expected Monday.

Second-quarter earnings season gets underway with a slew of major reports on Tuesday that include JPMorgan Chase and Wells Fargo. On the economic front, retail sales are due Tuesday morning.

“Each data point in and of itself may not be important, but collectively they’re important, especially since there’s a premium on the data,” Krosby said.

Federal Reserve Chair Janet Yellen delivers her semi-annual testimony on the economy to Congress on Wednesday and Thursday.

“If she focuses on (international news and the dollar) that will give the market a huge boost because she’s more concerned about it than she suggested in her speech Friday,” Krosby said.

In other news, the United States posted a budget surplus of $51.8 billion in June, down 27 percent from the same period last year, the U.S. Treasury Department said on Monday.

The Dow Jones Industrial Average traded up 211, or 1.19 percent, at 17,972, with Microsoft and Caterpillar leading gains and Merck and UnitedHealth the only decliners.

The S&P 500 traded up 21 points, or 1.05 percent, at 2,098, with information technology leading nine sectors higher and utilities the only decliner.

The Nasdaq traded up 72 points, or 1.45 percent, at 5,070.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 14.

Written by Evelyn Cheng of CNBC

(Source: MSN)

NYSE Trading Halted; Stocks Down 1% as China, Greece Weigh

© Provided by CNBC
© Provided by CNBC

Trading on the New York Stock Exchange in late-morning trade on Wednesday with U.S. stocks extending their losses as continued concerns about Greece and the extended selloff in the Chinese market pressured investor sentiment.

“We’ve had some technical malfunctions. Some may be related to connectivity with other exchanges. I believe we’re going to have a temporary pause certainly in a variety of stocks perhaps floor wide,” Art Cashin, director of floor operations at the NYSE, told CNBC, adding that the halt will not cause a move in a particular direction.

Other exchanges, however, continued trading normally. The NYSE later said that all open orders amid the halt will be cancelled.

“What happens with these situations is often you get a sort of residual result. You’re all clear or you get caught up to date and there’s a little bit of a backlog that pops up somewhere, and it tends to jam things up. So I don’t think any of us has quite enough information yet,” Cashin added.

The Dow Jones industrial average traded about 175 points lower when trading was halted as the major averages declined, with the Nasdaq Composite briefly off more than 1 percent as biotechs and Apple (AAPL) plunged more than 1 percent. The iPhone maker was also the worst performing stock in the Dow.

The S&P 500 struggled to hold gains for the year. The index dipped into negative territory Tuesday but recovered in afternoon trade to hold slightly higher for 2015.

“I think we’re just realigning the U.S. market with the declines elsewhere,” said Peter Boockvar, chief market analyst at The Lindsey Group.

In China, the Shanghai Composite closed nearly 6 percent lower despite supportive government measures. The index has fallen more than 30 percent from its mid-June peak amid frequent bouts of extreme volatility. Analysts say the turbulence is starting to unnerve regional investors.

“There was no real trigger until Chinese stocks became too pricey,” said Nick Raich, CEO of The Earnings Scout. “The trigger that sent this all off has been the Greece debt crisis.”

European stocks traded higher on Thursday amid hopes of a Greece deal. However, the indices are more than 2 percent lower for the week so far.

The Greek government has until Friday morning to present detailed reform proposals to allow a bailout deal by a Sunday summit.

Greek Prime Minister Alexis Tsipras addressed the European Parliament on Wednesday, lambasting Europe’s advocacy of austerity and the efficacy of Greece’s bailout programs since 2010, but promised a detailed, “concrete” deal would be presented in the next two to three days.

“Unfortunately the U.S. will remain headline-driven until earnings season which (starts) with Alcoa tonight,” Boockvar said. “Today will clearly be bullied around by headlines out of Greece.”

The Federal Open Market Committee (FOMC) minutes at 2 p.m. ET will also be in focus, with traders scanning the Federal Reserve’s June meeting report for hints on interest rate rise timing.

“I think the Fed minutes are something to watch closely,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. But “usually the market doesn’t do much around the minutes until they’re released.”

The Dow Jones Industrial Average (.DJI) traded down 194 points, or 0.99 percent, at 17,583, with Intel leading decliners and Microsoft (MSFT) the only advancer.

The S&P 500 (.SPX) traded down 23 points, or 1.14 percent, at 2,057, with telecommunications leading all 10 sectors lower.

The Nasdaq (.IXIC) traded down 64 points, or 1.31 percent, at 4,931.

The CBOE Volatility Index (VIX) (.VIX), widely considered the best gauge of fear in the market, traded near 18.

About five stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 194 million and a composite volume of 1.22 billion as of 11:30 a.m.

Crude oil futures for August delivery lost 81 cents to $51.52 a barrel on the New York Mercantile Exchange. Gold futures rose $7.50 to $1,160.20 an ounce in morning trade.

Bond yields held lower, with the 10-year yield at 2.23 percent and the 2-year at 0.57 percent. The Treasury auctions $21 billion in 10-year notes this afternoon.

The U.S. dollar fell about half a percent against major world currencies as the euro gained to above $1.10.

Earnings season unofficially begins with aluminium producer Alcoa (AA) reporting after the market close.

Written by Evelyn Cheng of CNBC

(Source: MSN)