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Dow 10,724.79 -60.03 (-0.56%)
Nasdaq 2,204.38 -13.78 (-0.62%)
S&P 500 1,247.57 -6.85 (-0.55%)
10-Yr Bond 4.370 -0.06 (-0.14%)
NYSE Volume 555,306,000
Nasdaq Volume 528,365,000
The market's major averages have stuck within a tight trading range throughout the morning, and are not budging from session lows as they head into 2005's final trading hours. Holiday-thinned volume has characterized the week's action, and that's especially the case today as many participants jump-start the three-day New Year's weekend. The lack of catalysts due to a near silent corporate front, a blank economic calendar, and an empty economic docket help to further thwart buying efforts. Sellers dominate, and year-end portfolio adjustments may be the root of their labor.
Leadership altogether lacks: All ten economic sectors have failed to clear the flat line today. 0.8% losses levied by Telecom and Materials blaze the southbound trail, but 0.6% declines in the influential Financial and Technology sectors weigh heaviest. The Treasury market's inverted yield curve continues to be the focal point of the stock market, and, though it's come as little surprise and on light volume, it nonetheless serves as a bearish backdrop. To that end, the rate-sensitive Financial sector faces especial weakness in bank stocks. The bond market, which closes early at 1:00 ET, has shifted lower in parallel fashion today. Separately, Citigroup (C 48.39 -0.19) exerts pressure after reports indicated that the banking giant has increased its bid (to $3 billion) for the state-owned Chinese lender Guangdong Bank. Similarly dragged by wide-spread selling, Tech's position contributes to the Nasdaq's underperformance today. Semiconductors, one of the sector's best-faring industries in 2005, serve as a pocket of relative weakness as traders perhaps attempt to lock-in profits. Intel (INTC 25.01 -0.06) had provided some slight offsetting support due to its reported marketing makeover - which reflects our Overweight rating on the Technology sector because of strong end-market demand for portable and digital consumer electronics - but has also fallen victim to selling.
Again pressured by locking of its 29% year-to-date gain, Energy vacillates just under the unchanged mark. Rocky crude futures trade, which leaves the commodity bouncing around the $60 per barrel mark, has gone largely unnoticed by the sector and broader market alike. News that ConnocoPhillips (COP 57.80 +0.10), Marathon Oil (MRO 60.60 -0.10), and Amerada Hess (AHC 126.12 +0.43) have re-entered Libya after 19 years also has had little effect on trade. Back to the crude action, The Discretionary (-0.3%) sector appears unfazed and actually demonstrates some degree of relative strength. General Motors (GM) has driven the auto manufacturing industry to the top of the S&P -- possibly due to the fact that the stock tops the 2006 Dogs of the Dow list. The well-known investment strategy calls for the purchase of the average's ten highest-yielding stocks, because a high yield is the product of a low price relative to the dividend paid -- an indication that the stock may be under-priced and due to rally. GM currently sports a 10.3% dividend yield. DJ30 -58.18 NASDAQ -13.40 SP500 -6.40 NASDAQ Dec/Adv/Vol 1981/889/514.2 mln NYSE Dec/Adv/Vol 2106/998/386.9 mln
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