Market's sag is signal of more volatility ahead

The Dow sells at the open and ends down 117 as investors fret about Japan, interest rates and unrest in Turkey. Expect more ups and downs into next week at least.

By Charley Blaine Jun 11, 2013 7:24PM
Trading floor © Digital Vision Ltd./SuperStockThe good news about the lousy stock market on Tuesday was that stocks didn't end at the lows seen right after the open.

The bad news about the lousy stock market was that it was lousy.

The market slumped at the open on news the Bank of Japan wouldn't push its interest rates lower. Japanese stocks slumped again.  Interest rates jumped. A big recovery followed -- with interest rates giving up their highs -- because the reality of the Japanese stock market is it's grossly overvalued.

Stocks slumped a second time in large part because of unrest in Istanbul. Investors don't like to see television pictures of rocks being thrown around,  fires and tear gas, especially in Syria's neighbor. You don't know what will follow. This volatility is likely to dominate markets on Wednesday and at least for the next few weeks.

The Dow Jones industrials ($INDU) fell 117 points to 15,122. The blue chips had been down as many as 153 points. The Standard & Poor's 500 Index ($INX) was off 17 points to 1,626, while the Nasdaq Composite Index ($COMPX) dropped 37 points to 3,437.

The Dow suffered its third triple-digit loss this month. It's also had two triple-digit gains in June as well.

The key date ahead for the markets is June 19. That's when the Federal Reserve announces its interest-rate policy and Chairman Ben Bernanke holds a news conference to try to clarity matters.

Also that day, package-shipper FedEx (FDX) will report quarterly results and offer a snapshot of how the domestic and global economies are faring.

The major averages are down around 3% since the market peak in late May. But the averages are still sporting hefty gains for the year: 15.4% for the Dow, 14% for the S&P 500 and 13.8% for the Nasdaq.

Some sectors of the markets have been slammed pretty hard since the end of April, in large part because all the speculation about what the Fed may do has pushed interest rates higher.

The 10-year Treasury yield opened Tuesday at a 52-week high of 2.269% before slipping back to 2.195%. The yield is up a third since bottoming at 1.614% on May 1, and, as the yield has climbed, anything that's interest-rate sensitive has been falling back.

The Dow Jones Utility Average ($UTIL) is down 10.3% since its April 30 peak. That fits the popular definition of a correction. The iShares Dow Jones U.S. Home Construction (ITB) exchange-traded fund, which counts seven homebuilders among its top 10 holdings, is down 11.7%, also since April 30.

The market losses on Tuesday were broad, with financial and energy stocks the biggest losers. Staples and healthcare stocks were hurt the least.

Crude oil (-CL) in New York fell 38 cents to $95.38 a barrel. Brent crude for August delivery fell 94 cents to $102.97. Gold (-GC) fell $10.50 to $1,375.50 an ounce.

Pfizer (PFE) and Procter & Gamble (PG), two classic defensive stocks, were the only winners among the 30 Dow stocks.

Fifty-three S&P 500 stocks had gains, led by Gamestop (GME) and Dollar General (DG). First Solar (FSLR) coal producer Peabody Energy (BTU), auto dealer Autonation (AN) and investment bank Morgan Stanley were the laggards.

Citigroup (C) was down $1.98 to $49.95 after Charles Peabody, an analyst at Portales Partners, said the banking giant faces a loss of as much as $7 billion on swings in the value of the Japanese yen against the dollar.

Only 14 of the stocks in the Nasdaq-100 Index ($NDX) were higher. The index, which was down 31 points to 2,960, tracks the largest Nasdaq stocks. The leaders were medical benefits manager Catamaran (CTRX), Alexion Pharmaceuticals (ALXN) and biotech company Celgene (CELG). The laggards were Texas Instruments (TXN), whose second-quarter guidance was a disappointment, and Baidu (BIDU).

Apple (AAPL) was off $1.29 to $437.60. Google (GOOG) fell $10.41 to $879.81.

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13Comments
Jun 11, 2013 10:09PM
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Market is too high given the real state of the economy and union. Who cares about Syria, Turkey or the entire Middle East for that matter. The best thing they could do is completely destroy each other. We should get the hell out of that part of the world so we don't get blamed for what's going to ultimately happen.
Jun 11, 2013 11:34PM
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maddoff was right. wall street just another ponzi play.
Jun 12, 2013 6:28AM
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The only reason it moves so mch is because speculaters and manipulaters of the markets are in control. There is nothing the invester can do. Crooks at work only!! 
Jun 12, 2013 7:33AM
Jun 12, 2013 9:15AM
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Kudos to the poster I modified this from:

 

The Federal Reserve:

1) Is A Privately Owned Banking Cartel
2) Is A Perpetual Debt Machine
3) Has Destroyed More Than 96% Of The Value Of The U.S. Dollar
4) Can Bail Out Whoever It Wants To Without Accountability
5) Uses Member Banks To Selectively Lend To Hold Us In Suppression
6) Creates Artificial Economic Bubbles To Compromise Economies
7) Is Dominated By The Big Wall Street Banks and Corrupt Banksters
8) System & Personal Income Tax Both Came To Be In 1913 without our vote.
9) Chairman, Ben Bernanke Has A Nightmarish Track Record Of Incompetence
10) Defies Democracy By Its Very Existence.

 

The War on Terror was fought on the wrong shore. Recall the troops and redeploy them to end the suppression of Americans through Financial Tyranny, control and manipulation.

A reminder that if there was no Federal Reserve, yesterday's Dow losses would have paralyzed controllers and manipulators to some extent. I believe that's coming regardless of the fiat money pumping. The rich are an endangered species.

Jun 12, 2013 8:49AM
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It's a bit scary because not only have stocks gotten weaker, but so has the USD against the Euro.
Jun 11, 2013 11:28PM
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QE ponzy scheme is no longer working. even the chumps are no longer buying it. that's whats going on now.
Jun 12, 2013 9:14AM
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Mick....Don't all those type purchases, similar to Funds...Buy after the close ??

And not during real time pricing.

Jun 12, 2013 9:06AM
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In reality....You have a Negative article come out one day and positive articles come out the next...

Sometimes the same day, same page, different authors..

 

Then we wonder why readers or Americans are so schitzo.

Jun 12, 2013 10:00AM
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Isn't modifying a nice way of saying plagiarizing ?

 

Do you really have to go out and hunt this type of shidt down?

Jun 12, 2013 9:06AM
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Lousy market Tuesday?  The S&P 500 Index was down 17 pts - just over 1%.  That's not a great market but representative of reasonable fluctuations.  Hopefully, CBRL's DRIP waited for it buy my automatic monthly purchase.
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