Extreme Pessimism Sets Stage for U.S. Stock Rally: Chart of Day

Wall Street rallies on earnings optimism

Dow industrials climb 57 to break seven-day slide

Traders hunting for beaten-down stocks lift stocks; Dow gains 57 points but ends off high

NEW YORK (AP) -- The Dow Jones industrial average broke a seven-day slide after traders sifted through the market for beaten-down stocks.

Investors tried Tuesday to recover some of the big losses that piled up following disappointing economic reports. The Dow had dropped 7.3 percent in the past two weeks and on Friday closed at its lowest level since early October.

The steep drop drew traders expecting to see the market bounce.

The Dow is up 57 points at 9,744. The Standard & Poor's 500 index is up 5 at 1,028, while the Nasdaq composite index is up 2 at 2,094.

Falling stocks narrowly outpaced those that rose on the New York Stock Exchange. Volume totaled 1.3 billion shares compared with 1.1 billion Friday.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.



NEW YORK (AP) -- A big bounce in stocks faded Tuesday after investors worried that a slowdown in the economy would continue to pound the market.

The Dow Jones industrial average fell about 10 points in late afternoon trading after jumping nearly 172 the first hour of the day. Treasury prices rose as investors remained concerned about the economy.

Retail stocks logged some of the biggest drops ahead of reports later in the week on June sales. Investors are concerned that a weakening of the recovery will keep cautious consumers out of stores. Macy's Inc. fell 3.6 percent, while Nordstrom Inc. lost 1.9 percent.

Investors tried in early trading to recover some of the big losses that piled up in the past two weeks following disappointing economic reports. Traders initially shook off a midmorning report that growth in services businesses slowed last month. The Institute for Supply Management, a trade group of purchasing executives, said its services index fell to 53.8 from 55.4 in May. Economists polled by Thomson Reuters forecast 55.0. A reading above 50 indicates growth.

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Stocks End Higher After Late Rally

NB: World Cup 11 June - 11 July 2010

Stocks end rough quarter with more questions

Stocks slump for April-June quarter after investors worry they bet too soon on the economy
Tim Paradis and Bernard Condon, AP Business Writers, On Wednesday June 30, 2010, 5:56 pm EDT

NEW YORK (AP) -- The stock market closed out a painful second quarter Wednesday and left investors with heavy losses and far more doubts about the economy than they had just months ago.

Stocks had their worst quarterly performance since the financial crisis. The Standard & Poor's 500 index, considered by many professional investors to be the best measure of the market's health, lost 11.9 percent, while the Dow Jones industrial average lost 10 percent. Both indexes are at their lows for 2010.

Meanwhile, Treasury notes and bonds soared during the quarter, driving interest rates sharply lower, as investors turning away from stocks sought a place where their money would be safe. In the early days of the quarter, the yield on the Treasury's 10-year note, used as a base for setting rates on consumer loans including mortgages, was close to 4 percent. By the quarter's end, it had fallen to 2.94 percent.

On the last day of the April-June period, the Dow lost 96 points, and all the big indexes were down about 1 percent.

Using the S&P 500 as a benchmark, stocks had their worst quarterly loss since the fourth quarter of 2008, when the index plunged 22.6 percent. For the first half, the index is down 7.8 percent, its worst first-half showing since the 13.8 percent it loss at the start of 2002.

The market lost about $1.6 trillion in value during the quarter, as measured by the Dow Jones U.S. Total Stock Market Index, which tracks nearly all U.S.-based companies.

Investors spent much of the quarter repeating the same questions they had a year earlier: Can the economy continue its recovery? Analysts say the answer most likely is yes but that traders are realizing it won't be easy.

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Stocks end higher for second week

By Alexandra Twin, senior writerJune 18, 2010: 4:15 PM ET

NEW YORK (CNNMoney.com) -- Stocks ended a choppy session higher Friday, with the market managing to carve out a second consecutive week of gains as buyers dipped back in after the May sell-off.

The Dow Jones industrial average (INDU),S&P 500 index (SPX) and the Nasdaq composite (COMP) all added a few points.

The Dow and S&P gained over 2% and the Nasdaq gained over 3%. Stocks rallied last week as well.

Investors were contending Friday with the quadruple options expiration, a quarterly event in which stock index future and options and individual stock futures and options are all expiring simultaneously. The process can create increased volatility in the underlying issues, particularly in the last hour of trade.

But stocks were a bit directionless amid a lack of market-moving corporate or economic news - and the fact that it was a Friday before a summer weekend. The direction over the short term is likely to stay volatile.

"It's going to be pretty choppy until the next big monthly jobs report comes out and the second-quarter earnings start in," said Ron Kiddoo, chief investment officer at Cozad Asset Management.

He said that on the upside, the correction that took the S&P 500 down about 14% in six weeks seems to be over for now. However, any gains in the weeks ahead are likely to be tepid amid the summer doldrums and ongoing questions about both Europe and the United States economy.

Worries about the fiscal debt crisis and the fallout from the BP oil spill were among the factors that led to the market's sell-off. Both issues continue to influence markets, but less dramatically than they did a month ago.

COMEX gold for August delivery closed up $9.60 at a record high of $1258.30. Gold hit a trading record of $1,263.70 during the session.

The week ahead brings reports on housing, jobs and the latest policy meeting from the Federal Reserve.

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Stocks fall to lowest level in 7 months on fears that Europe will hurt recovery; Dow falls 115

Stephen Bernard and Tim Paradis, AP Business Writers, On Monday June 7, 2010, 4:31 pm EDT

NEW YORK (AP) -- Stocks fell to their lowest level in seven months Monday after traders couldn't shake fears that Europe's economic problems will derail a global recovery.

The Dow Jones industrial average fell 115 points, or 1.2 percent, to its lowest close since November. The Dow lost 323 Friday after the government's May jobs report fell short of expectations.

Broader indexes logged steeper percentage drops Monday. The technology-focused Nasdaq composite index fell 2 percent.

Monday's drop was a smaller-scale repeat of Friday as traders again dumped stocks in the final hour. That signals traders would rather sell than be hit by surprises, especially because Europe's business day begins before trading opens in the U.S. Some traders say the slide has been overdone but that the market isn't likely to find much stability until there is a better sense about how Europe's economies will hold up under heavy cost-cutting.

With only a sprinkling of economic and corporate news to go on, traders again tracked the moves of the euro. The 16-nation currency hit another four-year low and hurt European markets. The euro fell as low as $1.1878 before rising to $1.1915. A drop in the currency is seen as a sign of flagging confidence in Europe's ability to rein in its debt without falling back into recession.

Financial stocks fell after a panel examining the financial crisis issued a subpoena to Goldman Sachs Group Inc. fell 2.5 percent. Bank of America lost 3.4 percent after news came out that the bank would pay $108 million to settle federal charges that its Countrywide Financial Corp. division had collected onerous fees from homeowners nearing foreclosure.

Utility and gold stocks were among the few gainers, a sign that traders want investments considered safer in weak economies. Utility company FirstEnergy rose 2.7 percent, while Barrick Gold climbed 4.1 percent.

"The market is playing defense and waiting for some resolution," said Mike Shea, managing partner at Direct Access Partners LLC in New York, pointing to the rise in gold stocks.

Questions over the health of Europe's economy again dominated trading. Investors are concerned that budget cuts in Europe will stall a global recovery. The worries have pounded stocks since major indexes hit 2010 highs in late April. The Dow is down 12.4 percent since reaching 11,205 on April 26. The drop of more than 10 percent from the peak indicates a "correction." It's the first major drop since indexes bounced off 12-year lows in March last year.

Jim Thorne, chief investment officer for equities at MTB Investment Advisers in Baltimore, said traders are afraid they're seeing a repeat of the financial crisis of 2008. But Thorne said that even though the jobs report Friday was disappointing, most numbers have pointed to an economy that is rebounding.

"Right now the market is getting to the point where it's uninvestable. Fundamentals don't matter," Thorne said. "This is a period that will be looked back upon six to eight months from now as a wonderful investing opportunity."

It was the lowest close for the Dow and the Standard & Poor's 500 index since Nov. 4. According to preliminary calculations, the Dow fell 115.48, or 1.2 percent, to 9,816.49, while the S&P 500 index fell 14.41, or 1.4 percent, to 1,050.47. The Nasdaq composite index fell 45.27, or 2 percent, to 2,173.90. The Nasdaq stands at its lowest level since Feb. 10.

Disappointing jobs report sends stocks tumbling

NEW YORK (AP) -- Stocks tumbled Friday after the Labor Department said hiring remains weak and Hungary became the latest European country to report its economy is in crisis. Interest rates dropped as investors moved money into the safety of Treasury bonds and notes.

The Dow Jones industrial average dropped 323 points, its third worst slide of the year. The index closed below 10,000 for the second time in two weeks. All the major indexes were down more than 3 percent. The concerns about Hungary pounded the euro to a four-year low.

The drop pushed major stock indexes back into "correction" mode, meaning a decline of at least 10 percent from recent highs.

Retailers were among the hardest hit stocks after investors bet that a weak job market would discourage consumers from spending. Financial stocks also fell sharply on concerns that borrowers would continue having problems paying their bills. Banks were further hurt by worries about their vulnerability to Europe's increasing troubles.

The government's May jobs report was an unpleasant surprise for investors who had grown a little more upbeat about the domestic economy the past few days. The Labor Department said private employers hired just 41,000 jobs in May, down dramatically from 218,000 in April and the lowest number since January. The news made it clear that the economic recovery isn't yet picking up the momentum that investors have been looking for.

The government said 431,000 jobs overall were created last month, but most of those them, 411,000, came from the government's hiring of temporary census workers. The overall number also fell short of expectations. Economists polled by Thomson Reuters had forecast employers would add 513,000 jobs.

Huh... Up Down Up Down UP

Bulls Blow It AGAIN, As Stocks Sell Off Big In Late Trading: Here's What You Need To Know

The overnight session was terrible, but it looked for a moment as though the bulls might put a halt to the selling, as at one point stocks were sharply higher. But, no. Stocks got hammered in late trading.

Here's the scoreboard:

Dow: -112 (-1.1%)

S&P 500: -18.70 (-1.72%)

NASDAQ: -35 (-1.54%)

And the big stories:

•BP was savaged during trading, ending down about 15%, as it sunk in that no solution would be forthcoming in the Deepwater mess, and that the company could really go bust. That was a topic of discussion all day. Late in the day, fresh headlines came out suggesting that a criminal investigation was underway. Don't miss the 10 disastrous mistakes made by BP prior to the explosion >

•Key industrial commodities also had a bad day, with copper, oil, and palladium all falling notably. Gold had a very good day, ending up 9.

•The big global economic stories came out of China. A slightly weak PMI really spooked markets overnight, as it suggested that the demand growth could not be counted on ad infinitum. There was also plenty of talk that China is depleting its commodity stockpiles that it's been building up for sometime.

•Domestic economic news was fairly quiet, though the one big number, the ISM Manufacturing index was solid. All eyes are on this Friday's jobs report.

World May Charts 2007-2010

May Closes at Almost 8% Loss, Worst for the Month Since 1962

Stocks closed out their worst May since 1962 by sliding again on more unsettling news about Europe. The Dow Jones industrials were down by about 50 points Friday after Spain suffered the second downgrade of its credit rating in a month.

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The Buzz: Are stocks in a correction or a bear market?

Sell in May and go away may seem like a silly Wall Street saying. But if you actually followed those words of wisdom, you'd be breathing a lot easier right now.

Stocks fell Monday as a better-than-expected jump in existing home sales in April was not enough to outweigh fears about the debt crisis in Europe. Tthe S&P 500 is now down about 9.5% in May.

So what now? Is the May malaise merely a long-awaited correction or the start of a new bear market that could last months or years? Is it time to buy in June and sing a happy tune?

Several market experts are guardedly optimistic that things won't get significantly worse. That's the good news.

"The most immediate concerns are transitory. They are important but they will get resolved soon," said David Joy, chief market strategist with Columbia Management in Boston. "It's important to have a well diversified portfolio and be prudent. But there's no need to exit the stock market."

Bruce McCain, chief investment strategist with Key Private Bank in Cleveland, added that he thinks there is little room left for stocks to fall from here. In fact, he said it's possible the market may have already hit bottom.

"This could be a surprisingly short correction," he said.

The bad news though is that the market may remain choppy for the foreseeable future.

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CIMB Research: Technical damage from sharp corrections

Written by CIMB Equities Research Friday, 21 May 2010 08:21

KUALA LUMPUR:CIMB Equities Research says the sharp corrections in the US and regional equity markets in May have done a lot of technical damage.

In its technical outlook for the equities markets, it said on Friday, May 21 the 200-day SMAs for the Shanghai Composite, Hang Seng, STI, Kospi and MSCI Asia ex-Japan caved in recently, followed by the S&P 500 and DJIA on Thursday night.

The S&P500's wave (iii) down leg has already started given the sharp breakdown of the index from the 1,150 level. Third waves are usually powerful in nature and this was evident over the past few days.

“We do not believe the wave (iii) downleg has ended and think it may need another few days to complete. This should then be followed by wave (iv)'s strong 30-50pt rebound.

“There is still another wave (v) downleg to complete before a meaningful rebound kicks in, probably in June. Failure to see strong rebounds over the next week would indicate that wave (iii) remains very much in control,” it said.

Downtrend? Sideline?

Outlook rosy for U.S. stocks thanks to euro woes

(Reuters) - Europe's struggle to reduce its mountain of government debt is brightening the outlook for U.S. stocks as investors turn to American assets for safety.

Strong corporate balance sheets, rising profits, economic growth on an upswing and the Federal Reserve's pledge to keep interest rates low make Wall Street look like a good destination even for those who have missed the year-long stock market rally.

The recovery in U.S. equities seemed to be running out of steam recently, with the S&P 500 stock index .SPX up in 12 of the previous 14 months, stocks technically overbought, and Europe's economic recovery seen stalling.

But the 750 million euro ($1 trillion) aid package thrown at the European debt crisis, and the promise by Greece, Portugal and Spain that they would get to grips with their debt problems, helped the S&P 500 post its largest three-day run in 10 months earlier this week. The S&P 500 lost ground Thursday and Friday but still managed to close its best week in the last 10.

"I think (the European crisis) will cause investors to appreciate the U.S. much more and money will start coming into the U.S. stock market," said Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas.

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US data show solid recovery but concerns remain

Published: Saturday May 15, 2010 MYT 12:09:00 PM

WASHINGTON (AP): The U.S. economy is being boosted by higher retail sales, stronger factory output and a rise in companies' stockpiles.

That picture emerged from reports Friday pointing to an economy that's improving modestly but steadily after the worst recession in decades. Yet the recovery needs stronger job creation, and it remains under pressure from fears that Europe's debt crisis could slow the U.S. economy.

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Correction Only Lasts One Week: Stocks recover from recent slide over debt fears

NEW YORK (AP) -- A dose of good economic news sent stocks sharply higher Wednesday and erased the Dow Jones industrials' big plunge of last week.

The Dow rose 148 points to return to where it stood before Thursday's tumble that briefly took the average down nearly 1,000 points. The technology-dominated Nasdaq composite index led major indexes with a 2 percent gain. Investors moved into tech stocks ahead of earnings from network gear maker Cisco Systems Inc. and following upbeat forecasts from Intel Corp. and IBM Corp.

Analysts say the market's rebound from last week's drop reflects investors' growing confidence that Europe's debt problems are contained for now. Fears that Europe's problems would spill over to the U.S. fed the market's plunge.

Economic reports from the U.S. and Europe helped reassure investors that the global recovery is intact. The Commerce Department said exports rose in March to their highest levels since 2008. That was a welcome signal for the manufacturing industry, which has been strengthening since last year. Increased demand could eventually lead to more hiring.

Most European markets posted big gains after better economic numbers signaled that a rebound is occurring in many parts of the continent. A round of spending cuts in Spain bolstered hopes that debt-strapped countries in Europe would take steps to slash costs. Stocks surged around the world Monday after European leaders agreed to a nearly $1 trillion bailout to contain fears of a debt crisis that pounded markets last week.

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UPDATE 1-Wall St anxiety gauge falls on euro zone aid

* VIX recovers to levels seen before Thursday's plunge

* Global leaders agree to $1 trillion emergency package

* Euro zone aid makes options less attractive: traders (Adds byline, comment)

By Angela Moon and Doris Frankel
CHICAGO, May 10 (Reuters) - A key measure of U.S. stock market volatility tumbled on Monday after a $1 trillion emergency rescue package eased fears Greece's debt crisis would spread and add to losses in world financial markets.

The Chicago Board Options Exchange Volatility Index .VIX, Wall Street's favorite measure of investor anxiety, was down 31 percent to 28.17. The index closed at 40.95 on Friday, which was the highest since April 2009.

Elliot Spar, option market strategist at Stifel Nicolaus, said the so-called VIX index was back to the levels before Thursday's dramatic plunge when the Dow index .DJI briefly fell nearly 1,000 points.

"If the fear of the euro zone implosion is off the table for now, people are not paying as much for protection," he said.

"However, I don't expect the market to rally back to their recent highs as there are resistance levels created from last week's smash."

Scott Fullman, director of derivative investment strategy at broker-dealer WJB Capital Group, also said traders continue to be leery of the day's bounce.

"Although we have seen a 28 percent drop in the VIX (today), we have not seen a return to levels previous to the drop in stock prices that began more than a week ago."

Option investors went on the defensive after the big drop on Thursday, seeking to protect their portfolios against further declines in U.S. stocks amid concerns that Greece's debt crisis could escalate.

The S&P 500 index .SPX jumped more than 4 percent on Monday, racking up its strongest opening on record.

"It doesn't mean the people are not all of a sudden not fearful at all. But the rescue package, the coordinated efforts of the market are giving fewer reasons to invest in options," said Steve Claussen, chief investment strategist at online brokerage OptionsHouse.com in Chicago.

The VIX, which typically has an inverse relationship with the S&P benchmark, had been on the rise recently, suggesting players were inclined to seek options to manage stock market risk. The index is a 30-day risk forecast of stock market volatility. (Reporting by Angela Moon and Doris Frankel; Editing by Kenneth Barry)

Source

What a Drop ..... DOW fell 997 points, but rebounded to close at 10,520

NEW YORK (CNNMoney.com) -- Stocks selloff sharply Thursday, extending the recent downturn as investors continue to worry about the effects Europe's debt problems can have on the global economic recovery.

The Dow Jones industrial average (INDU) lost as much as 997.21 points in volatile trading. At 3:00 p.m. it was down 410 points, or 3.8%. The Dow's biggest one-day point selloff on a closing basis was Sept. 29, 2008, when it fell 777.68.

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NEW YORK (CNNMoney.com) -- In one of the most gut-wrenching hours in Wall Street history, the Dow plunged almost 1,000 points Thursday before recovering to close down 348, as erroneous trading in Procter & Gamble and several other stocks sparked a massive selloff.

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Extracted from Bursa Chat

Watch Greece but don't forget America

NEW YORK (CNNMoney.com) -- Investors are acting like college students eager to take that quintessential backpacking adventure before joining the real world. They are obsessed with Europe.

And while the situation in Europe is worrisome, investors may be ignoring good news right here in the U.S.

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