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United States News Title: Home / Markets Monday, May 24, 2010 Uptick Sell at the Bell: Dow Loses 127 as Banks Slide [Lowest Level in More Than Three Months ] U.S. stocks suffered a late-day selloff on Monday as a rush of selling in the financial sector initially driven by concerns about Spanish banks spooked the markets, wiped out solid gains in the technology sector and left the Dow at its lowest level in more than three months. Today’s Markets The Dow Jones Industrial Average fell 126.82 points, or 1.24%, to 10066.57, the Standard & Poor's 500 sank 14.04 points, or 1.29%, to 1073.65 and the Nasdaq Composite lost 15.49 points, or 0.69%, to 2213.55. The FOX 50 dropped 8.82 points, or 1.11%, to 789.29. There was no clear catalyst for the last-minute drop but it's clear the financial sector took the brunt of the selling. Wall Street closed near its worst level of the day as the tumbling banks and a sharply weaker euro overshadowed a stronger-than-expected housing report and enthusiasm for technology stocks. Banking stocks "have been the lightning rod for the last 24 months and they continue to be the lightning rod, whether you like it or not. As the financials go, so go the rest of the market,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business. The afternoon slide was almost an exact reversal of the late-day burst of buying on Friday that lifted the markets sharply. Neither move had a clear catalyst, but reflected the volatility returning to the markets. "Unfortunately that’s part of the new reality we’ve returned to,” said Michael James, senior equities trader at Wedbush Morgan Securities. Monday's selloff drove the Dow closer to the psychologically-important 10000 threshold and to its lowest settle since Feb. 10. The benchmark index is now off 10.2% from its 2010 closing high of 11205. All but one of the 30 stocks that make up the Dow were stuck in reverse, led by financial giants JPMorgan Chase (JPM: 38.578, -1.482, -3.7%) and Bank of America (BAC: 15.41, -0.57, -3.57%). The index's best performers were Home Depot (HD: 33.21, 0.19, 0.58%) and Coca-Cola (KO: 51.46, -0.13, -0.25%). While the markets did see more volatility, the extreme turbulence experienced last week eased somewhat as the Dow traded in a range of 144 points. That compares to wild swings of 280 and 375 points during the previous two sessions. The VIX, or the markets' so-called "fear gauge," closed 4% lower. “I don’t think investors feel confident in this market yet. We’ve seen a lot of volatility and that’s just showing us that the markets aren’t stabilized,” Jonathan Corpina, senior managing partner at Meridian Equity Partners, told FOX Business. “Investors are still a little confused about what to do.” Financial stocks were the biggest drags on Wall Street, giving back a chunk of their big rally on Friday that came after the U.S. Senate approved a financial reform bill. The sector was hurt by Spain having to seize control of savings bank CajaSur. Even though CajaSur accounts for just 0.6% of the country’s financial assets, the bank failure comes on the heels of widespread worries about European sovereign debt and the banks’ exposure to those bonds. At the same time, Bloomberg News reported four more Spanish savings banks plan to merge as regulators push weak lenders to merge with stronger partners. Underscoring the worries about Spanish banks, Banco Santander (STD: 10.44, -0.53, -4.83%) closed over 5% lower. Also, shares of Wells Fargo (WFC: 28.67, -1.49, -4.94%) tumbled 4.6% as Goldman Sachs downgraded the stock from "buy" to "neutral." Goldman also lowered its rating on Comerica (CMA: 37.3, -1.35, -3.49%). Spooked by the Spanish bank seizure, the euro took another big hit, giving back most of last week's gains. The euro, which continues to play an outsized role in moving U.S. markets, slid 1.3% to $1.2381. Technology stocks had propped up the Nasdaq Composite earlier in the day as the sector was boosted by several bullish analyst notes and more M&A news. Apple (AAPL: 246.76, 4.44, 1.83%) jumped 2% after JPMorgan Chase upped its price target on the stock from $275 to $310 and added it to its Best Ideas list. Google (GOOG: 477.16, 4.49, 0.95%) also outperformed as Citi added the stock to its Top Picks Live list and kept its buy rating on the stock. Also, IBM (IBM: 124.354, -0.946, -0.75%) scooped up business software maker Sterling Commerce from AT&T (T: 24.42, -0.44, -1.77%) for $1.4 billion and Gentiva Health Services (GTIV: 29.17, 3.38, 13.11%) agreed to buy Odyssey HealthCare (ODSY: 26.7, 7.41, 38.41%) for almost $1 billion. The bulls were unable to post a sustainable rally after the National Association of Realtors said existing home sales rose 7.6% in April, exceeding expectations for a rise of 5.6% and topping the previous month's 6.8% rise. The report also showed the inventory of homes for sale rose 11.5% to 4.04 million units, or 8.4 months' worth of supply. Shares of home builders such as Toll Brothers (TOL: 20.5, -0.18, -0.87%) and KB Home (KBH: 14.7, -0.28, -1.87%) closed in the red, giving up their initial gains in the wake of the report. Also on the economic front, the Chicago Fed index rose to 0.29% in April, up from 0.13 in March. It was the first time the index was positive for two-straight months since 2006. The commodity markets posted gains despite the stronger U.S. dollar. Crude settled at $70.25 a barrel, up 17 cents, or 0.24%. Snapping a four-day losing streak, gold gained $18.10 a troy ounce, or 1.54%, to $1193.80. Corporate Movers Campbell Soup (CPB: 35.4, -0.1, -0.28%) beat the Street with a non-GAAP profit of 54 cents a share. Sales were up 6.9% to $1.8 billion, matching consensus calls from analysts. Campbell Soup said it sees 2010 sales rising 2.5% to 3.5% and it expects non-GAAP EPS growth at the high end of its earlier range of 9% to 11%. DreamWorks Animation (DWA: 31.05, -3.82, -10.95%) tumbled 11% as the movie studio’s debut of “Shrek Forever After” failed to meet expectations. The disappointing opening weekend, which brought in $71.3 million, led Thomas Weisel to cut its price target on the stock from $38 to $34. Citigroup (C: 3.77, 0.03, 0.8%) was upgraded by Goldman Sachs from “neutral” to “buy.” Goldman predicted Citi, Bank of America and JPMorgan Chase will benefit from stronger capital market activity in the near term. Sprint (S: 4.79, 0.38, 8.62%) soared more than 8% after the wireless carrier was upgraded by Goldman Sachs to “buy,” according to Reuters. Goldman sees a 36% upside to the stock over the next year, raising its price target from $3.50 to $6. Goldman predicted Sprint’s market share will increase and customer cancellations will ease. Yahoo! (YHOO: 15.54, 0.065, 0.42%) reached a deal to become the exclusive provider of Nokia (NOK: 10.01, -0.06, -0.6%) mail and chat services. In return, Nokia said it will power navigation and map services for Yahoo! Global Markets The U.K.'s FTSE 100 rose 0.13% to 5069.61, France's CAC 40 closed up 0.01% to 3430.93 and Germany's DAX slid 0.40% to 5805.68. In Asia, Japan's Nikkei 225 closed lower by 0.27% to 9758.40, Hong Kong's Hang Seng added 0.62% to 19667.76 and China's Shanghai Composite soared 3.48% to 2673.42.
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