Bulls Head for the Exits
Updated from 4:06 p.m. EDT
Stocks fell sharply Tuesday as investors digested two stronger-than-expected pieces of economic news and remained defensive ahead of this week's Federal Reserve rate meeting.
The Dow Jones Industrial Average dropped 120.54 points, or 1.09%, to 10,924.74, with 26 of its 30 components finishing in negative territory. The S&P 500 lost 11.37 points, or 0.91%, to 1239.19, and the Nasdaq Composite plunged 33.42 points, or 1.57%, to 2100.25, reflecting a 3.8% hammering in the Philadelphia Semiconductor Sector index.
The 10-year Treasury bond was up 7/32 in price to yield 5.21%, and the dollar fell against the yen and euro."This market is exhibiting few positive aspects," said Barry Hyman, equity market strategist with EKN Financial. "We can't string more than one strong day together. The bulls have a tough argument, as there's indiscriminate selling going on." General Motors (GM) was the main drag on the Dow. Investors shrugged off its announcement Monday that 35,000 hourly workers have agreed to early retirement or contract buyouts. The stock, which is up 46% since the start of the year partially because of optimism about the buyout plan, dropped $1.83, or 6.6%, to close at $25.92. Dow component DuPont (DD) fell 2.7% after French telecom company Vivendi (V) said it has sold a 1.8% stake in the company. DuPont lost $1.13 to $40.91. The Nasdaq, meanwhile, was pressured by chipmaker Marvell Technology (MRVL), which tumbled 15.9%. Marvell said it will purchase Intel's (INTC) communications and application processor arm for $600 million, plus the assumption of liabilities. About 1.56 billion shares changed hands on the New York Stock Exchange, with decliners outpacing advancers by an 8-to-3 margin. Volume on the Nasdaq was 1.83 billion shares, and losers beat winners 3 to 1. "We're seeing movements on really light volume," said Paul Nolte, director of investments with Hinsdale Associates. "We're still waiting for the Fed to move before anything. There wasn't much in the economic numbers so far that were market-moving, so we're still biding time." August crude added 12 cents to close at $71.92 a barrel. Gold was off $3.30, finishing at $584.40 an ounce. Silver fell 5 cents to $10.19 an ounce, and copper eased 14 cents to $3.18 a pound. To view Gregg Greenberg's video take on today's market,
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV