By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Middle East tensions drive up oil, gold prices
NEW YORK (MarketWatch) -- After failed attempts at a rebound,
U.S. stocks ended Thursday's choppy session lower, declining for
the fourth consecutive session.
The benchmark S&P 500 turned negative for the year and
recorded its longest losing streak since January.
Investors remain nervous amid concerns over poor earnings
prospects and worries that the Federal Reserve is moving closer to
a rate hike.
Military strikes in Yemen
(http://www.marketwatch.com/story/iran-warns-saudi-airstrikes-in-yemen-will-escalate-tension-in-region-2015-03-26)
had also 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) ended 4.90 points, or 0.2% lower at
2,056.15 with eight of its 10 sectors closing in the red.
Technology stocks which took a beating on Wednesday rebounded, but
modest gains weren't enough to lift the markets.
The Dow Jones Industrial Average (DJI) in early trade declined
more than 100 points, but closed 40.31 points, or 0.2%, lower at
17,678.23.
The Nasdaq Composite (RIXF) ended the session down 13.16 points,
or 0.3%, to 4,863.36.
Bruce McCain, chief investment strategist at Key Private Bank,
said that investors certainly have room to worry given that
earnings estimates declined markedly, while the economy has
softened.
"We've lost the support of the Fed's QE program, while there is
anxiety about the impending interest rate increases. With multiples
this high, there are more chances of corrections," McCain said.
McCain stressed that this is still not a time to capitulate on
stocks in the long term.
Michael O'Rourke, chief market strategist at JonesTrading, says
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 wrote in a
note.
The downturn in U.S. stocks was a part of a broader global
slide.
The Stoxx Europe 600 index slid 0.9% in 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 added to overall jitters with investors
bidding up gold and oil prices. Gold prices
(http://www.marketwatch.com/story/gold-silver-surge-as-investors-grow-risk-averse-2015-03-26)(GCM5),
climbed $7.80, or 0.7%, to settle at $1,204.80 an ounce. Oil prices
(http://www.marketwatch.com/story/oil-futures-settle-45-higher-up-a-fifth-straight-session-2015-03-26)(CLM5)
settled at $51.43 a barrel, up $2.22, or 4.5%, 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, but
gave back some gains.
(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 made first-time claims for
weekly unemployment benefits
(http://www.marketwatch.com/story/jobless-claims-drop-9000-to-five-week-low-of-282000-2015-03-26)fell
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 more than
18% after the company cut its sales outlook
(http://www.marketwatch.com/story/sandisk-shares-sink-after-revenue-outlook-cut-2015-03-26).
Red Hat Inc.(RHT) shares climbed 10% 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.
Accenture PLC(ACN) shares jumped 6.8% after the management
consulting firm beat Wall Street profit expectations. The company
also offered an upbeat full-year sales outlook.
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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