Stocks are retreating around the globe on lackluster economic data in Europe and disappointing corporate news here in the U.S. Another bounce in the U.S. dollar continues to fuel a sell-off in commodities. Crude oil is down for the fifth day in a row with a 1.2% drop and a move under $73.00 a barrel. Gold is also plunging again for its third decline in a row with a $21 drop to $1,143 an ounce. The Dow Industrials are flirting with a 100-point decline near 10,291 and the S&P 500 has fallen under the 1,100 mark.
Asian markets were down across the board. The Japanese NIKKEI snapped a six-day winning streak with a 0.27% decline. The Japanese government announced they would raise their new stimulus package from 7.1 trillion yen to 7.2 trillion yen (about $81 billion). The Chinese Shanghai index lost 1.0% and the Hong Kong Hang Seng fell 1.1%. European markets were harder hit by selling pressure. Banking stocks sank on renewed worries over their exposure to Dubai's debt after Nakheel, a Dubai property developer, reported billions in losses. A credit rating downgrade for Greece also weighed on the region. Germany, Europe's largest economy, said industrial output fell 1.8% in October. While in England the Confederation of British Industry said 25% of manufacturers expect "output to fall over the next three months" (-Reuters). The English FTSE index lost 1.65%. The German DAX fell 1.66%. The French CAC-40 dropped 1.43%.
Here in the U.S. investors were disappointed with corporate news. Last night after the closing bell Fedex (FDX) significantly raised their earnings guidance and the stock has hit new 52-week highs near $90.00 on the news. Unfortunately, this was overshadowed by negative earnings guidance from 3M (MMM), a Dow component, and disappointing same-store sales figures from McDonald's (MCD), another Dow component.
Investors might be a little nervous after President Obama talked about a new stimulus-like package when he spoke to the Brookings Institution this morning. If the administration thinks we need more stimulus then the recovery may not be as strong as the market hopes it is. More than a few on Wall Street are uncomfortable with Obama's opinion this morning that we need to "spend our way out of this recession".
Most of the market is in negative territory but the SOX semiconductor index is bucking the trend with its sixth gain in a row (+0.2%). The healthcare sector is showing strength with a 0.8% gain as investors bet on a weakened healthcare bill coming out of the senate. In other news the U.S. Treasury had a successful 3-year note auction.
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
I'm not seeing too much movement on the OptionInvestor.com play list. However, FDX did hit our first target at $89.95 this morning. Goldman Sachs (GS) hit a new relative low this morning. We're seeing some short covering(?) in shares of GMCR and RIMM.