We’re less than 10 minutes away from the opening bell and stocks are headed for a lower start.
Futures on the S&P 500 are down 14.8 points, or 0.8%, at 1,766.40 , while Dow futures are off 145 points, or 0.9%, at 15,588. Nasdaq 100 futures dropped 12.5 points, or 0.4%, at 3,489.50.
There’s the opening bell and, as advertised, it’s not a pretty start.
Dow Jones Industrials — down 167 points, or 1.1%, at 15,681
S&P 500 — down 18 points, or 1%, at 1,776
Nasdaq Composite — down 46 points, or 1.1%, at 4,078
Worries about the so-called January indicator aside, stock-market bulls will no doubt be glad to get January and its emerging-market turmoil behind them. As of Thursday’s close, the S&P 500 was on track for its biggest January percent drop since 2010, while the Dow is eyeing its worst January since 2009.
“While China and the Fed had been seen as the major catalysts throughout 2013, markets were caught out by the extent of recent emerging market difficulties and the knock on effect has been more pronounced than many investors expected. However investors will be hoping that they can isolate the current currency concerns and that the equity market juggernaut gets back on the right road,” said Rebecca O’Keeffe, head of investment at London-based stockbroker Interactive Investor.
Early losses are snowballing, with the Dow dropping more than 200 points.
Dow — down 221 points, or 1.4%, at 15,631
S&P 500 — down 21 points, or 1.2%, at 1,773
Nasdaq Composite — down 41 points, or 1%, at 4,082
The Dow Jones Industrial Average is off around 190 points after tumbling more than 200 in early action. Unsurprisingly, the index’s 30 components are a sea of red.
The biggest decliner in percent terms is Chevron Corp. /quotes/zigman/289939/delayed /quotes/nls/cvx CVX , down 3.4%, while Boeing Co. /quotes/zigman/220026/delayed /quotes/nls/ba BA is off 1.9% and Exxon Mobil /quotes/zigman/203975/delayed /quotes/nls/xom XOM has lost 1.7%.
Bucking the trend is Caterpillar /quotes/zigman/221644/delayed /quotes/nls/cat CAT , holding on to a 0.5% gain, while Microsoft /quotes/zigman/20493/delayed /quotes/nls/msft MSFT is up 0.3% on reports the software maker is close to naming a new CEO.
The University of Michigan’s consumer sentiment gauge fell in January to a final reading of 81.2 from 82.5 in December, accoridngot news reports. Economists were bracing for worse, having penciled in a drop to 81.
The Dow, which had fallen more than 200 points in early action, continued to trim its decline but remains down 182 points, or 1.1%, at 15,668. The S&P 500 is off 16.16 points at 1,778.03.
The world’s largest retailer didn’t help sentiment early Friday when it cut its forecast for fourth-quarter profit. Wal-Mart pegged earnings from continuing operations at between $1.50 and $1.60 a share, including a hit from the closing of 50 stores in Brazil and China, and a transaction in India. That’s below the low end of the companies previous range of $1.60 to $1.70 a share and the consensus produced by a FactSet survey for earnings of $1.65.
Wal-Mart shares are down 1.2%.
The January assault on U.S. stocks has major indexes flirting with some pretty important support levels on the charts.
MarketWatch’s Barbara Kollmeyer has a round-up of what the technicians are saying about the S&P 500. The 1,775 and 1,700 levels are both seen as levels to watch.
Right now, the S&P 500 is off 16.33 points, or 0.9%, at 1,777.88, so far holding above the January intraday low of 1,770.45 set on Wednesday. The Dow, off more than 192 points at 15,656.08, earlier hit its lowest level since Nov. 8.
As selling of stocks accelerated this week, long-dated Treasurys rallied, as investors flocked to the safety of U.S government debt market. The yield on the 10-year Treasury note is at 2.65% after dropping more than 3 basis points today. For more on that, read our regular bond report.
A sharp drop in Treasury yields is benefiting home builders today – a rare bright spot on Wall Street. The SPDR S&P Homebuilders ETF /quotes/zigman/477673/delayed /quotes/nls/xhb XHB is up 0.9%, iShares US Home Construction ETF itb /quotes/zigman/1496092/delayed /quotes/nls/itb ITB rose 1.6%.
PulteGroup Inc /quotes/zigman/129784/delayed /quotes/nls/phm PHM +3.1%
D.R. Horton Inc /quotes/zigman/224125/delayed /quotes/nls/dhi DHI +2.4%
Lennar Corp /www.marketwatch.com/investing/stock/len +2.2%
The CBOE Vix index, which is negatively correlated with the S&P 500, has jumped nearly 9% earlier, but since then eased. It is still above the 18 level.
Hey America, it’s not all about you.
Sure, earnings from Amazon and Mattel didn’t help matters and that Wal-Mart forecast was a downer, too. But the ball really got rolling in Europe with those low, low inflation numbers.
They’ve only served to stoke fears that the euro zone, after managing last year to post a long-delayed but meager recovery, is now threatened by the specter of deflation. That’s only going to make next week’s ECB meeting, and Mario Draghi’s monthly news conference, all the more the focus of attention.
So what’s a European investor to do. MarketWatch’s Sara Sjolin takes a look at how disinflation and the threat of deflation are affecting how people approach European markets.
It’s the food stamps, stupid! At least, that’s one explanation why Wal-Mart’s sales are going to be worse than expected. And the cold weather, of course.
A cut in government food subsidies and harsh winter affected many other companies, writes Steve Goldstein.
While we’re on the subject of Europe, a lot of investors piled into the Continent in the latter half of last year on ideas the U.S. rally was getting frothy.
While U.S. stocks actually kept moving from record to record, Europe solidly outperformed in a pretty impressive game of catch-up. But now, with valuations on both sides of the Atlantic looking pretty full, further outperformance is far from a sure thing, strategists say, which might make for more of a stock-picker friendly environment.
Here’s our story on how investing in European stocks is going to be more work in 2014.
Selling on Wall Street eased somewhat, with the main indexes off their session lows, but still firmly in red.
S&P 500 /quotes/zigman/3870025/realtime SPX -0.5%
Dow /quotes/zigman/627449/realtime DJIA -0.7%
Nasdaq /quotes/zigman/12633936/realtime COMP -0.5%
A fierce battle is being waged over the 1,770 level for the S&P 500.
Forex.com’s Fawad Razaqzada offers the above chart — a cash-for-difference index derived from the front-month S&P 500 futures contract.
Here’s what he sees happening:
As a reminder, this 1770 level marks the convergence of the previous support-and-resistance zone with the 100-day moving average, a long-term bullish trend line and the 38.2% Fibonacci retracement level of the upswing from the October low.
At the time of this, the index is displaying a bullish hammer candle on the daily chart. If it closes the day around these levels, or better still higher, then we could well see a sharp rally next week. The first obvious level of resistance comes in around 1805, followed by 1820. However if and when the index closes below 1770 then we could easily see another sharp sell-off towards, and possibly beyond, the 200-day moving average, at around 1710.
Chipotle Mexican Grill /quotes/zigman/395806/delayed /quotes/nls/cmg CMG is the best performer on the S&P 500, after earnings came well above analysts’ forecasts. Shares are up nearly 14% at last check.
Chipotle said that it could afford a minimum-wage hike as it signals possible price rise of 3%-5% this year. More on the story, read Steve Goldstein’s Behind the Storefront post.
It appears that not enough girls (or boys) wanted Barbie dolls for Christmas. To be fair, the boys and girls in North America just did not covet other Mattel’s toys that much either, as sales fell 10%.
The toy-maker is punished pretty badly today, with shares down nearly 10%.
Read more in the Behind the Storefront post by Jim Jelter.
Amazon.com /quotes/zigman/63011/delayed /quotes/nls/amzn AMZN is down 9.5%, making it the second-biggest percentage loser in the S&P 500 after missing analysts’ forecasts.
But potentially bad news for Amazon customers’ wallets could be really good news for shareholders, writes MarketWatch’s Rex Crum, weighing in on Thursday’s revelation that the online retailer is weighing a potentially big hike in the annual price of Prime, it’s two-day “free” shipping program.
A near 4% jump in Google shares sent the prices to their all time high. Google’s market cap is about $50 billion shy of reaching that of Apple.
Sharp drops in Amazon’s shares triggered a short sale circuit breaker on Nasdaq OMX at 12:37 p.m. EST.
You may be asking, who the heck is Satya Nadella? But Microsoft investors seem to be happy with speculation that the executive vice president of cloud and enterprise is the top candidate to replace the retiring Steve Ballmer as CEO of the software giant.
Micrsoft shares /quotes/zigman/20493/delayed /quotes/nls/msft MSFT are up 2.3%, making them the blue-chip index’s top gainer as it continues to nurse triple-digit losses and as tech stocks generally take a turn lower.
Bernstein Research’s Mark Moerdler offers up one reason why investors seem to be taking to heart the possibility of Nadella at the helm after endless rounds of speculation that focused on corporate superstars such as Ford’s Alan Mulally.
It’s because Nadella is “an enterprise guy,” Moerdler said. “The real opportunity for Microsoft is in that they are moving to more cloud and subscription services. And here’s a guy who does that.”
“We can blame the recent pullback on the emerging markets or capital flows, but at the end of the day, it was going to happen anyway because markets rallied a bit too much at the end of last year,” says Jim Russell, senior equity strategist for U.S. Bank Wealth Management.
We would consider this as a buying opportunity. The jury is out on whether stocks will have a bigger correction, but for longer-term our outlook is positive.
One of the reasons for such outlook is that inflation in developed countries and many large emerging markets remains low, allowing central banks to retain accomodative policies.
MarketWatch’s A week in charts, gives a roundup of this week’s economic reports.
In one line: Consumer spending ramps up, housing falters.
It’s no secret emerging-market politicians and policy makers feel whipsawed by Fed’s aggressive monetary policy easing and, now, the start of its inevitable unwind.
Though they have problems of their own, countries such as India, Turkey and South Africa have hiked rates in an effort to ease pressure on their currencies — pressure attributed in part to concerns over the Fed’s tapering of its bond purchases, which may now be drawing money away from developing countries.
Critics found a sympathetic ear in Kansas City Federal Reserve Bank President Esther George, who told an audience in South Africa that she feared the costs of the Fed’s bond-buying plan “can influence other countries by distorting their exchange rates and balance of payment positions, capital flows and rates of credit expansion.”
Swings by the stock market won’t dictate the Fed’s policy moves, San Francisco Federal Reserve President John Williams said in an interview with Fox Business News.
While global market moves can have an impact on the U.S. economy, recent gyrations haven’t fundamentally altered an improving outlook for the U.S. economy and improvement in labor markets, he said.
U.S. stocks continue to claw their way back from a heavy, early selloff that had slammed the Dow down by more than 200 points to its lowest level since November.
In recent action:
Dow — down 72.95, or 0.5%, at 15,775.66
S&P — down 3.66, or 0.2%, at 1,790.53
Nasdaq Composite — down 4.16, or 0.1%, at 4,118.96
The S&P 500 had trimmed enough of its losses today that it is now flat on the week.
Don’t dump stocks just because January was a loss, says Mark Hulbert, MarketWatch columnist.
One of the reasons is the lack of any plausible explanation for why the January indicator should work.
It appears late afternoon buying has pulled the Nasdaq Composite out of the negative territory. The tech-heavy index is up a point at 4,124.12.
The S&P 500 is less than a points away from being in positive territory and is now slightly higher on the week.
Gold futures settled lower on Friday and lost 1.9% for the week, but gained 3% over the past month, as investors turned to the shiny metal amid weakness in stocks.
Stocks attempted to erase losses in mid-afternoon, with the Nasdaq Composite briefly turning positive and the S&P 500 coming within a whisker of unchanged. Then the rebound ran out of steam.
We’ll see if we get another push to the upside before the closing bell or whether that was a last-gasp effort at a rebound. All major indexes, including the Nasdaq, are in negative territory. The Dow is again sporting a triple-digit loss but indexes remain well off those early lows.
Dow — down 106,or 0.7%, at 15,742
S&P — down 7, or 0.4%, at 1,787
Nasdaq Composite — down 14, or 0.3%, at 4,110
U.S. Treasurys were a hot ticket as stocks pulled back and emerging-market turmoil in January, fostering the biggest monthly drop in the 10-year yield since August 2011.
The yield on the 10-year Treasury note /quotes/zigman/4868283/delayed 10_YEAR fell 0.36 percentage point to 2.669%. Yields fall as bond prices rise.
The closing bell rings out January. There’s plenty of carnage to be seen, with the S&P 500 and the Dow posting their biggest monthly percentage decline since May 2012 and marking the first January decline since 2010.
An afternoon rebound ran out of steam, leaving stocks to end the day with steep losses, though off of early lows. The drop added to a dismal January for stocks, with the latest weakness inspired by disappointing earnings from Amazon and Mattell, fears of euro-zone deflation and continued concerns about emerging markets.
The Dow ends the day down 149.76 points, or 0.9%, at 15,698.85. For the month, the blue-chip index lost 5.3%.
The S&P 500 fell 11.60 points, or 0.6%, to 1,782.59, contributing to a 3.56% monthly drop.
The Nasdaq Composite ends 19.25 points lower, a loss of 0.5%, at 4,103.88. The index fell 1.7% for the month.