Posted by: Schuyler R. Thorpe | June 11, 2011

June Starts Out As A Bad Month For Wall Street

June starts ominously for teetering Wall Street

NEW YORK (Reuters) – Wall Street ended a four-day rally with its worst session since August on Wednesday and could suffer more losses in coming days as investors faced more signs the economic recovery is fading.

All 10 Standard & Poor’s sectors ended more than 1 percent lower and all 30 stocks in the Dow industrials fell. Banks were the biggest decliners as the economic reports painted a glum picture for jobs and manufacturing.

The recent four-day winning streak had some investors pointing to resilience in the market, but Wednesday’s decline took the S&P through its 50-day moving average, leaving the market vulnerable to more losses.

“I expected that the S&P would be able to hold onto 1,331 or 1,324,” said Roger Volz, director of cash equities at BGC Financial in New York. “The fact that we keep moving deeper into a corrective mode … puts us on the sidelines for Friday.”

In a sign of increased investor caution, the CBOE Volatility index (.VIX) spiked 18.5 percent while in the U.S. options market became a bit more defensive. About 16.7 million contracts changed hands, with puts outpacing calls by a factor of 1.07:1, according to Trade Alert.

The Dow Jones industrial average (.DJI) was down 279.42 points, or 2.22 percent, at 12,290.37. The Standard & Poor’s 500 Index (.SPX) was down 30.66 points, or 2.28 percent, at 1,314.54. The Nasdaq Composite Index (.IXIC) was down 66.11 points, or 2.33 percent, at 2,769.19.

The S&P financial sector (.GSPF) slumped 3.5 percent with JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) among the biggest drags. JPMorgan fell 3.4 percent to $41.75 while Bank of America lost 4.3 percent to $11.24. A number of hedge funds are selling the banking sector.

According to ADP, U.S. private employers added a scant 38,000 jobs in May, the lowest since September 2010 and far below what had been expected. Several banks cut their forecasts for Friday’s non-farm payroll report from the Labor Department.

“The ADP number suggests that we’ll see a weak payroll report on Friday, and it’s very possible that soon people will be reducing their GDP forecasts,” said Tim Speiss, head of personal wealth advisers at EisnerAmper in New York. “We could see some additional contraction.”

Goldman Sachs cut its estimate, saying employers added 100,000 jobs in May versus an original estimate of 150,000. Citigroup cuts its forecast to 100,000 from 170,000.

Wall Street had a dismal start for June, a month that is historically weak for equities. It also ended May with the poorest monthly performance since August.

Manufacturing activity declined sharply in May, according to the Institute for Supply Management’s index, which suffered its biggest fall since September 2009.

Wednesday’s data was the latest in a string of discouraging reports on home sales, consumer confidence and Midwest business activity.

Automakers tumbled after reporting slightly lower car sales in May as economic weakness and high gas prices pushed consumers to delay purchases. General Motors Co (GM.N) lost 5 percent to $30.23 and Ford Motor Co (F.N) sank 4.6 percent to $14.23.

Almost five stocks fell for every one that rose on the New York Stock Exchange while on the Nasdaq about 81 percent of stocks finished in the negative.

About 8.36 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, slightly under last year’s daily average of 8.47 billion. Recently, days of steep declines have corresponded with sharp upticks in trading volume.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


Gypsy Nerds

Gett'n our travel on!

Jen's Writers Blog

A place for the imagination!

Dreams of Dark Angels

The blog of fantasy writer Storm Constantine

Passion with a Dark and Dangerous Twist

A site for romance and thriller author, Cassandre Dayne

H.J. Bradley

The world of an aspiring indie author.

Q13 FOX News

Seattle and Western Washington's source for breaking news, weather, and sports. Home of Washington’s Most Wanted and the Seattle Seahawks.


Author Tim Baker shares his thoughts, hopes and dreams. (mostly his thoughts)

Kait Nolan

Smart, sassy, small town Southern romance that makes you feel like home

Guild Of Dreams

Build Your World and They Will Come

Trent Lewin

Fiction, and other made-up stories

Wildhorse33's Blog

freeing the creative spirit

Here's To Us

Nerdiness Encouraged

%d bloggers like this: