The Street was hit with a mixed bag of economic data today. ADP reported that the private sector shed a whopping 522,000 jobs last month, setting the stage for an equally grim nonfarm payrolls report from the Labor Department this Friday. Elsewhere, the Institute for Supply Management reported that its non-manufacturing index unexpectedly improved to 42.9% in January from December's reading of 40.1%. This better-than-expected news propelled the Dow to early, hesitant gains, but the blue chips collapsed in afternoon trading as selling pressure pummeled the shares of Bank of America (BAC) and its fellow financial stocks. The drop was prompted by uncertainty surrounding the government's on-the-rocks rescue plan, and -- although analysts dismissed the chatter as unfounded speculation -- some investors are now fearful that B of A will be nationalized, wiping out shareholders' value in the process.
The Dow Jones Industrial Average (DJIA 7,956.66) sacrificed its tenuous foothold atop the 8,000 level, settling on a drop of 121.7 points, or 1.5%. Only 6 of the Dow's 30 components closed higher, led by Intel (INTC) and Caterpillar (CAT). Bank of America paced the declining issues with an 11.3% plunge, but Kraft Foods (KFT) didn't fare much better in the wake of its earnings report -- the company tumbled 9.2% today.
The S&P 500 Index (SPX 832.23) suffered only modest losses, finishing the session on a deficit of 6.3 points, or 0.8%. The index remains stifled by its 10-day and 20-day moving averages. Finally, the Nasdaq Composite (COMP 1,515.1) retreated from an early rally, and eventually succumbed to a negative close -- despite valiant late-day efforts to stay in the black. The tech-rich COMP ended on a decline of just 1.3 points, or 0.1%.
Turning to equities in focus, Costco Wholesale (COST) plummeted to a new annual low after issuing a dire second-quarter warning ... Wynn Resorts (WYNN) announced drastic belt-tightening measures to combat the challenging economic environment ... Harley-Davidson (HOG) attracted heavy call volume Tuesday after an investment from Warren Buffett, but was hit today with a Moody's downgrade ... The Clorox Company (CLX) joined the ever-growing roster of U.S. firms to announce job cuts ... Coal concern Massey Energy (MEE) tumbled sharply after slashing its pricing and production estimates for 2009 ... and today's Quote of the Day comes from Congressman Barney Frank, that pillar of U.S. politics, who expressed his displeasure with greedy CEOs in a manner more befitting of a junior-high student than the chairman of the House Financial Services Committee. Frank recently chided the heads of the bailed-out banks by noting:
"People really hate you. And they're starting to hate us just for hanging out with you."
But these weren't the only headlines hitting the Street today. Click on the links below for our Daily Market Blog coverage of:
And, in case you missed it, Joseph Hargett assessed the prospects for Oracle (ORCL) in this week's edition of The Casual Contrarian. Click here to watch.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
The Energy Information Administration (EIA) reported today that U.S. crude inventories swelled again last week, jumping by 7.2 million barrels to an 18-month peak of 346.1 million barrels. Additionally, inventories at the Cushing, Oklahoma delivery point for Nymex futures tapped a record high of 34.3 million barrels. The unexpectedly sizable surge in oil supplies applied pressure to black gold today, and the commodity also came under fire from the day's weak employment data. By the close, crude oil for March delivery shed 46 cents, or 1.1%, to end the day at $40.32 per barrel.
Meanwhile, gold futures caught a lift from downbeat economic data, as well as the palpable anxiety regarding the bailout bill currently wending its way through Capitol Hill. These twin catalysts sparked a wave of demand for the safe-haven metal, and propelled the contract back atop the $900 level. February-dated gold futures settled today on a gain of $9.60, or 1.1%, at $901.60 per ounce.
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