By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Middle East tensions drive up oil, gold prices
NEW YORK (MarketWatch) -- U.S. stocks moved lower on Thursday,
with main indexes on track to record their fourth straight session
of losses.
Concerns about slowing growth in the global economy and military
strikes in Yemen
(http://www.marketwatch.com/story/iran-warns-saudi-airstrikes-in-yemen-will-escalate-tension-in-region-2015-03-26)
sent investors scrambling for cover, pushing up prices of perceived
havens such as gold and the yen. Oil prices also jumped on fears of
a potential supply disruption from the Middle East.
Ahead of the opening bell, a better-than-expected report on
jobless claims did little to alleviate concerns of a marked
slowdown in the economy during the first quarter.
The S&P 500 (SPX) was down 0.57% at 2,049.2, with nine of
its 10 sectors trading in the red. Energy was benefiting from a
jump in oil prices.
The Dow Jones Industrial Average (DJI) declined more than 100
points, down 0.62% to 17,608, with only Apple Inc. (AAPL) and
International Business Machines (IBM) maintaining modest gains amid
the slide.
The Nasdaq Composite (RIXF) was off by 42 points, or down 0.86%
to 4,833, but losses were far smaller than a drop during the
previous session, when the tech-heavy index dropped 2.4%.
Implied volatility on the S&P 500, CBOE Vix rose 7% to above
16, suggesting investors are increasingly worried that markets are
facing a pullback.
Michael O'Rourke, chief market strategist at JonesTrading,
believes what's happening is the market is reassessing data and
starting to view previous tailwinds as headwinds.
"When one considers the trends behind the major top-down
elements that investors watch -- 1. fundamentals in the form of
earnings, 2. policy in the form of the Fed, and 3. economic data --
all three were previous tailwinds that appear to be transforming to
headwinds as of late," O'Rourke said in a note.
The Stoxx Europe 600 index slid 1.6% ion Thursday trade. The
Nikkei 225 index posted the biggest losses in two months, with a
1.4% decline.
Read: Stocks are overpriced, overleveraged, headed for trouble
(http://www.marketwatch.com/story/stocks-are-overpriced-overleveraged-headed-for-trouble-2015-03-25)
Middle East tension also added to the mix. Investors drove up
gold prices (GCM5), which pushed through the psychologically
important level of $1,200 an ounce, while oil prices (CLM5) surged
more than 2% as news of a coordinated strikes in Yemen by five Gulf
states and Egypt triggered worries about crude supply. The yen
(USDJPY), another perceived-safe-haven asset, also surged against
the dollar.
Read: Oil prices surge as Saudi strikes in Yemen trigger supply
worries
(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)
(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)
(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)
(http://www.marketwatch.com/story/oil-prices-surge-as-saudi-strikes-in-yemen-trigger-supply-worries-2015-03-26)In
economic news, the number of people who applied for weekly
unemployment benefits
(http://www.marketwatch.com/story/jobless-claims-drop-9000-to-five-week-low-of-282000-2015-03-26)fell
by more than expected, in a sign that companies are keeping their
workers despite what appears to be a marked slowdown in
first-quarter growth.
Stocks to watch: Shares of SanDisk Corp.(SNDK) plunged 17% after
the company cut its sales outlook
(http://www.marketwatch.com/story/sandisk-shares-sink-after-revenue-outlook-cut-2015-03-26).
Accenture PLC(ACN) shares jumped 5.4% after the management
consulting firm beat Wall Street profit expectations. The company
also offered an upbeat full-year sales outlook.
Red Hat Inc.(RHT) shares jumped 7.5% on the heels of
better-than-expected results
(http://www.marketwatch.com/story/red-hat-apollo-education-pvh-earnings-in-focus-2015-03-24)
released on Wednesday.
For more on notable movers, read Movers & Shakers column
(http://www.marketwatch.com/story/gamestop-lululemon-restoration-hardware-earnings-in-focus-2015-03-26).
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