Continued declines in bank stocks has Dow sitting at six year low. The Dow ($INDU) closed the session with a loss of 89.68 points to a level of 7,465.95. The S&P 500 ($SPX) declined 9.48 points, finishing the session at 778.94. The Nasdaq ($COMPQ) gave up 25.15 points to 1,442.82. Volume was moderate on the session with 1.49 billion shares traded on the NYSE and 2.04 billion shares exchanging hands on the Naz. Market breadth was negative by an 8-to-22 and 9-to-18 margin on the Big Board and Naz respectively.
Bank stocks continued their slide Thursday with the Financial Select Sector SPDR (XLF) down 5.27 percent to $7.55. XLF shares have decline for the past five consecutive sessions on fears some sort of bank nationalization is in the cards. Unfortunately, the Obama administration has done little to quell these concerns, but the bulls are hoping once these fears are alleviated, bank stocks can see substantial gains. However, with the Dow breaking below another support level, gains might be difficult to come by in the near term.
The Dow broke below 8,000 on Feb. 10, but the SPX and Naz remained about support. However, the Dow has continued its decline, now passing its next support level at 7,500 with the SPX following suit, breaking below key support at 800. The Naz continues to outperform, but this tech heavy index is nearing its next support level at 1,400. Hewlett-Packard's (HPQ) earnings report today did little to convince traders that now is a good time to buy tech stocks.
Shares of HP fell 7.89 percent Thursday to close at $31.39, which is about 10 percent above its 52-week low. The fact businesses around the globe are spending less hurt HPs financial results for the quarter with the company also warning about revenues in the current quarter and full year. Other tech bellwethers followed HPs lead with Intel (INTC) shares off 5.09 percent to $12.68 and Dell (DELL) down 6.13 percent to $8.12.
In economic news, leading indicators rose 0.4 percent when a flat reading was expected. However, jobless claims remained above 600,000 and continuing claims moved to another record high. The Philly Fed Survey was the most disappointing with the index falling 17 points to -41.3 when a reading of -26.0 was expected. The employment component also remained very weak, falling nearly 7 points to -45.3. This report follows the Empire State Mfg. Survey, which was also very disappointing.
Friday is double witching expiration and this could create some heavier volume levels and possible intraday volatility. The fear indices shot above resistance this week, but have managed to keep from spiking substantially. The CBOE Market Volatility Index ($VIX) actually fell Thursday 2.85 percent to 47.08. The Nasdaq Volatility Index ($VXN) lost 3.17 percent to 45.20. These two indices have highs this year at 96.40 and 86.52 respectively.
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