Despite a strong rally this week in the equities market, it turned out that traders weren't quite feeling confident enough to leave their money in stocks over the weekend. The Street's cautious optimism was quickly replaced this morning by outright skepticism, thanks in part to an earnings warning from Accenture (ACN). The day's economic data didn't provide much to cheer about, either; the Commerce Department reported that consumer spending slipped 0.2% in February, as after-tax incomes tumbled 0.4%. These reports, along with fresh job cuts from Google (GOOG), Johnson Controls (JCI), and Tyson Foods (TSN), triggered a tidal wave of profit taking that put a minor dent in the week's major gains.
The Dow Jones Industrial Average (DJIA 7,776.18) ended the day on a drop of 148 points, or 1.9%, as 26 of its 30 components declined. Citigroup (C) swallowed the day's heaviest losses, followed closely by its sector peer JPMorgan Chase (JPM). Among the 4 advancing equities, General Motors (GM) galloped to a 6.2% gain as investors anticipated additional automaker aid from the government. Despite today's drop, the blue-chip barometer managed to close above its 10-week moving average for the first time since early January. For the week, the Dow added 6.8%.
The S&P 500 Index (SPX 815.94) gave up nearly 17 points, or 2.0%, by the close, as the index retreated from resistance at its 20-week trendline. However, the SPX wrapped up the week on a gain of 6.2%. Finally, the Nasdaq Composite (COMP 1,545.20) swallowed the biggest daily loss, shedding almost 42 points. The tech-rich COMP nevertheless finished the week on the same upbeat note as its fellow indices, adding 6.0% from last Friday's close.
Turning to equities in focus, MGM Mirage (MGM) pared the worst of its early plunge after securing funding for its City Center project ... Call volume accelerated on JA Solar (JASO) as investors eyed solar subsidies from China ... Immucor, Inc. (BLUD) attracted pessimistic option activity ahead of its upcoming date in the earnings spotlight ... Arch Coal (ACI) continued to frustrate short sellers with its range-bound price action ... Monsanto Company (MON) retreated from technical resistance, defying option traders' bullish expectations ... and today's Quote of the Day comes from Brazilian President Luiz Inacio Lula da Silva, who had no problem fingering the culprit behind the global economic crisis. Sky News reports that visiting British Prime Minister Gordon Brown grew a little uncomfortable when da Silva asserted at a press conference:
"This is a crisis that was caused by white people with blue eyes."
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, Jocelynn Drake explained how to interpret open interest and volume data in this week's edition of Options Spotlight. Click here to watch the video.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
After closing near a 4-month high on Thursday, crude futures turned south today. The day's downbeat economic data led some traders to believe that black gold's recent advance was overdone. Investors also considered a report from Goldman Sachs, with the brokerage firm warning that oil was "vulnerable to a near-term pullback" in the wake of its recent run higher. Against this bearish backdrop, crude oil for May delivery shed $1.96, or 3.6%, to finish the session at $52.38 per barrel. On a weekly basis, oil futures edged 0.6% higher.
The profit-taking trend in the equities market also took a toll on gold futures today, with strength in the U.S. dollar multiplying the metal's woes. Comments from German Finance Minister Peer Steinbrueck propelled the greenback higher versus the euro, with the official warning that the euro will struggle if member countries continue to disregard the European Union's stability and growth pact. By the close, gold for April delivery gave up $16.70, or 1.8% to end at $923.20 per ounce. For the week, the contract shed 3.5%.
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