US stocks close down; Dow below 18,000

30.12.2014 23:54
Market Movers

US stocks close down; Dow below 18,000

Evelyn Cheng |

U.S. stocks closed down in low volume trade on Tuesday, pressured by weakness abroad and a sharp decline in the utilities sector.

“I wouldn’t read too much into (utilities’ decline) at this point given the slow day today, so some of the moves are bound to be exaggerated,” Bespoke Investment Group co-founder Paul Hickey said in an email.

Composite volume held near 2 billion on the New York Stock Exchange, below average levels. The Dow Jones Industrial Average also fell below the 18,000 level in the close.

“A lot of people are not at their desks. Any sentiment gets blown out of proportion these days,” said Kim Forrest, senior equity analyst at Fort Pitt Capital. During the last two days of trading before the new year, her firm is “tidying up and taking some losses,” she said.

Other analysts did not see any apparent reason for the slide of as much as 2.2 percent in the traditionally high-yielding sector, especially since bond yields were also on the decline.

Read MoreThis market trend could be ‘very negative’

“There’s no specific reason for it,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “The only thing I can think of is low volume, last minute switching of sectors.”

“Next year, the market is expecting a change in interest rates,” he added. “Some window dressing is going on here by institutions.”

Adrian Day of Adrian Day Asset Management also noted that “many of the stocks that people buy for income—including utilities—are down significantly.”

The Dow Jones Utilities Average also traded lower, off Monday’s closing high.

Read MoreNasdaq may finally recover from tech bubble burst

On Monday, the utilities sector led the S&P 500 to its 53rd record close for the year. The sector is still up nearly 27 percent for the year.

“Utilities have basically gone parabolic here, which is dangerous, especially when it’s utilities,” said Peter Boockvar, chief market analyst at The Lindsey Group. “It’s not the most encouraging thing.”

Stocks held to a narrow trading range in light volume trade on Monday, closing the day with the S&P and Russell 2000 at records and the Dow Jones Industrial Average ending its 8-day win streak.

Concerns about Greece’s failure to elect a new president on Monday continued to weigh on global markets on Tuesday, with Asian and European stocks closing down 1 percent.

“Most of the world is down today,” Boockvar said. “I think there’s concerns about Greece and how that might affect Draghi (and QE).”

Other than a slight worry about Greece’s long-term participation in the Euro, Mark Luschini of Janney Montgomery Scott said there’s “not much news that would undermine markets.”

Read MoreGreece exit from EU ‘not impossible’: Pro

The December reading of the Conference Board’s consumer confidence index came in slightly lower-than-expected at 92.6.

Earlier, the Case-Shiller house price index for October showed that U.S. single-family home prices’ rate of increase continued to decelerate in October since the stronger-than-expected rise seen in the previous month.

 

Symbol
Name
Price
 
Change
%Change
DJIA Dow Jones Industrial Average 17983.07
 
-55.16 -0.31%
S&P 500 S&P 500 Index 2080.35
 
-10.22 -0.49%
NASDAQ Nasdaq Composite Index 4777.44
 
-29.47 -0.61%

 

The S&P 500 closed down 10.2 points, or 0.49 percent, at 2,080.35, with utilities the greatest laggard as all 10 sectors declined.

The Dow Jones Industrial Average closed down 55.1 points, or 0.31 percent, at 17,983.07, with Caterpillar leading declines and UnitedHealth the greatest of four blue-chip advancers.

The Nasdaq closed down 29.4 points, or 0.61 percent, at 4,777.44.

The Russell 2000 closed below its record set on Monday.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 16.

Read MoreStill bearish? Stocks head for 8 quarters of gains

The 10-year note yield pared losses to 2.19 percent, after holding near 2.21 percent on Monday. The U.S. Dollar regained its losses to trade slightly higher against major world currencies.

Crude oil futures for February gained 51 cents to settle at $54.12 a barrel on the New York Mercantile Exchange. Brent oil recovered from an earlier 5-½-year low below $57 per barrel that was touched despite ongoing output disruptions in Libya.

Gold futures recovered all of Monday’s losses to settle up $18.50, or 1.57 percent, to $1,200.40 an ounce.

Read MoreGold rallying, but new lows seen in 2015

Related gold stocks benefited from the rally, with Newmont Mining and Barrick Gold closing up more than 3.6 percent.Gold Fields gained 2.6 percent.

Multi-utilities SCANA, Wisconsin Energy, and CMS Energy, along with power producer AES all closed down about 1 percent or more.

American Realty surged to close up more than 7 percent on activist investor Corvex’s disclosure of a 7.1 percent stake in the real estate investment consulting group.

Fast casual chain Chipotle closed down 1.12 percent while maintaining a near 30 percent gain for the year.

Head of UBS floor operations Art Cashin rang the opening bell at the New York Stock Exchange to celebrate 50 years to the day of working on the trading floor.

Read MoreHappy 50th anniversary to Art Cashin

U.S. stock index futures pointed to a lower open on Tuesday, as oil prices continued to weaken and Greek news remained a focal point.

“While European markets continue to react to yesterday’s Greek news, I think the biggest market risk going forward for the rest of us is not what happens politically or economically in Greece…but if the goings on there instead impacts what the (European Central Bank) wants to do going forward,” Boockvar said in a note.

The Greek parliament, for a third time, failed to elect a new president on Monday, meaning a general election has been called for January 25. There are worries that far-left anti-austerity party Syriza could win, with polls showing that the party has a narrow lead, according to Reuters.

Athens’ main stock exchange, which ended almost 4 percent lower on Monday, pared losses to close about 0.45 percent lower.

Read MoreWhy Greece could cause a shiver, not a chill





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