Market Wrap-Up
Stocks and many exchange-traded funds dropped again Tuesday as tech and financials sagged and Germany imposed a partial ban on short-selling. That overshadowed stronger housing data that pointed to an ongoing recovery.
The Dow Jones Industrial Average closed down 115 points at 10511. The S&P 500 finished down 16 points at 1120 and the Nasdaq ended 37 points lower at 2317.
Late in the session, Germany’s financial markets regulator said it will ban naked short-selling of certain euro-zone debt and credit default swaps as well as some financial stocks. That means those securities can’t be sold short if they are not borrowed in advance. The ban will remain in effect until March 31, 2011. The move, which was seen as largely symbolic, was viewed as a trade-off for Germany’s support for the nearly $1 trillion bailout of weaker euro-zone economies. The dollar strengthened against the euro, which dropped to $1.2204 from $1.2392 on Monday. The U.S. Dollar Index rose 1.08%.
The Commerce Department said housing starts climbed 5.8% to a seasonally-adjusted 672,000 annual rate compared with March, beating economists’ expectations. But building permits — a sign of future construction — decreased 11.5% to an annual rate of 606,000. Economists had expected permits to drop only 0.4%.
Meanwhile, U.S. wholesale prices edged lower in April as energy prices dropped. Overseas, U.K. CPI ran a faster-than-forecast 3.7% in April, while euro-zone inflation rose 1.5%. Core CPI was 0.8% in the 16-nation euro bloc. Data last week showing that core inflation turned negative in Spain rattled the market.
Hewlett-Packard (HPQ) reported fiscal second-quarter earnings of $1.09 a share, up 27% from 86 cents a year ago. Advance pessimism pushed the technology sector down in late trading.
Google (GOOG) announced it’s buying Norwegian Internet voice and video communication company Global IP Solutions Holding AB for $68 million.
European markets bounced back, though they closed off their highs. London’s FTSE was up 0.9%, the German DAX was up 1.5% and the CAC 40 in Paris was up 2.1%. The Shanghai Composite bounced back after Monday’s hammering, rising 2%.
For a detailed rundown of Tuesday’s trading session see our market story.
Winners
The iShares Barclays 20+ Year Treasury Bond fund (TLT) picked up 1.5% as investors backed off equities. The PowerShares DB U.S. Dollar Index Bullish fund (UUP) rose 1.1%.
Losers
The SPDR KBW Bank fund (KBE) dropped 3.9% as investors reacted to increased German financial regulation. The iShares MSCI Brazil Index fund (EWZ) dropped 3.1% as Brazilian investors echoed concerns about the euro.
Tuesday’s Industry Headlines
Launching Pad
Grail Advisors sought permission from the Securities and Exchange Commission to launch an active ETF focused on short-term fixed-income securities. Grail said it wanted to launch the fund in August, and would charge an annual management fee of 0.30%. It plans to invest in investment-grade, money-market and short-term debt securities of a year or less in duration. That will include obligations issued by the U.S. Treasury and agencies, corporations and banks.
Similar Posts:
- European Moves Sink Stocks Again (Market Update)
- Big Drop Crushes ETFs and Indexes (Daily ETF Wrap-Up)
- Wild Stock Swing Ends Upward (Daily ETF Wrap-Up)
- Stock Losses Moderate at Close (Market Update)
- Dow Hits 11000, First Time Since 2008 (Market Update)
