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Dry Bulk Stocks in 2011: Headlines Moving the Market

March 15: Japan Nuke Fears Hit Commodities Stocks

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Selling pressure hit commodities-linked stocks Tuesday, March 15, as Japanese markets crashed amid the burgeoning post-quake nuclear crisis.

The downward pressure was general, with the Dow Jones Industrial Average tumbling more than 200 points, but the declines among commodities names were among the most severe no matter the sector. Institutional investors that had pushed commodities prices to near record highs in recent weeks are using the ugly headlines scrolling across the tapes as an excuse to rotate out of commodities and equities, say market participants.

"We're seeing investment money just bailing out of commodities," said Darin Newsom, senior commodities analyst at DTN in Baltimore. "We had seen that trend in grains for the last two weeks or so, but now we're seeing it in metals, in energies, in everything."

The worst hit sector of commodities-linked stocks was probably dry-bulk shipping, where fears percolated that the closing of so many Japanese ports because of the tsunami will impair demand for oceangoing freight services in the near term.

That reduction in demand couldn't come at a worse time for dry-bulk ship owners, who have faced a collapse in rates since the beginning of the year as a glut of new ships weighs on the market.

Among stocks in the sector, DryShips (DRYS - Get Report) shares declined 3.4%, Diana Shipping (DSX - Get Report) 4.5%, Genco Shipping & Trading (GNK - Get Report) 5% and Excel Maritime (EXM) 6.3%.
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EXM $0.00 0.00%
EGLE $5.71 0.00%
DRYS $0.21 0.00%
DSX $6.41 0.00%
GNK $3.53 0.00%


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