Not only did Friday mark the stock market's third straight loss, but it also marked its worst single-session percentage drop in more than two months. The recent string of losses has been underscored by a sell-the-news mentality among investors. Dow dropped more than 200 points for the 2nd straight session!
Tech stocks were dropped for a 3.9% loss by participants who have argued that the heady gains seen by the sector in previous months meant that positive news had already priced into stocks.
As a result, better-than-expected earnings from Google (GOOG 550.01, -32.97) and Advanced Micro Devices (AMD 7.88, -1.11) were met with stiff selling pressure (also IBM ). Google's weakness imbued fellow large-caps in the Nasdaq 100, which fell 3.0% this session, while AMD dragged down the Philadelphia Semiconductor Index to a 5.3% loss.
Consumer finance stocks fell 9.3% as participants took a closer look into (again, in spite of)better-than-expected earnings from Capital One Financial (COF 37.53, -5.17) and American Express (AXP 38.59, -3.57). Remember, Goldman Sach had a blow-out earnings reported earlier in the week.
Though they were able to string together gains in the face of broader market pressure during the previous two sessions, regional banks were sent to a 2.3% loss amid a batch of mixed earnings reports. Overall weakness among financial issues sent the sector to a 3.3% loss.
Both General Electric (GE 16.11, +0.09) and McDonald's (MCD 63.39, +0.19) exceeded earnings expectations for the latest quarter (again!)and showed early strength, but their gains faded into the close. They were part of a handful of blue chips to book gains. More on GE from Bloomberg
Broad-based weakness during the past few sessions resulted in the stock market's worst weekly performance since late October and caused stocks to close the week below their 50-day moving average for the first time since early November.
Volatility surged for the second straight session. A 25% spike on top of the previous session's 19.2% run up resulted in the worst two-session rise for the Volatility Index, or VIX, in more than one year. It also caused the VIX to close above both its 50-day moving average and its 200-day moving average for the first time since March 2008.
Trading volume was strong once again as roughly 1.5 billion shares exchanged hands on the NYSE. That put trading volume on the big board above its 50-day moving average and its 200-day moving average for the second session in a row.
U.S. dollar has retreated to a loss of 0.3% against a basket of foreign currencies.
Financial issues have come to seek direction as analysts assess the possible repercussions of President Obama's proposal to limit risk-taking by banks (including a massive 1,000 points correction?)
Many overseas banks are lower in sympathy to the losses incurred by domestic banks after President Obama announced plans to curb certain hedge fund-related activities at U.S. banks.
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