June 11th 2014 – Stocks Overcast As The Dow Skids 100 Points

 

Market View:

The inevitable profit taking started today after the World Bank lowered it’s growth estimates.  After such a spike the market was vunerable to any economic negative news.   That compounded with news that Emerates cancelled an order with Airbus for a new fleet of planes.

I expect a couple more days of sideways to slightly down markets before we see another up leg to this continuing rally.

Market News:

U.S. stocks declined on Wednesday, with benchmark indexes retreating from all-time highs, after the World Bank lowered its outlook for global growth.

House Majority Leader Eric Cantor’s surprising loss to a tea party activist in Tuesday night’s Virginia primary also rattled investors, with some wondering if it heralded the return of gridlock on Capitol Hill.

The CBOE Volatility Index, a measure of investor uncertainty, jumped 5.7 percent.

In its report, the World Bank projected the global economy would expand 2.8 percent in 2014, down from a 3.2 percent forecast delivered in January. Its estimate for world growth in 2015 held at 3.4 percent.

After a 124-point fall, the Dow Jones Industrial Average lost 102.04 points, or 0.6 percent, to 16,843.88, with Boeing leading blue-chip declines that reached to 26 of 30 components.

The plane maker declined after RBC Capital downgraded the stock to sector perform from outperform. And, Bloomberg cited a Guggenheim Securities analyst as saying Boeing was the “biggest loser” besides Cantor in the Virginia primary, because the Republican’s defeat jeopardizes congressional reauthorization of low-cost lending that helps foreign carriers purchase jets.

 The S&P 500 declined 6.9 points, or 0.4 percent, to 1,943.89, with utilities the leading laggard and energy the sole sector in the green of the index’s 10 major industry groups.

The Nasdaq shed 6.07 points, or 0.1 percent, to 4,331.93.

Mortgage applications jumped 10.3 percent last week, according to the Mortgage Bankers Association, with the increased activity coming just as rates were starting to climb again.

International stock market action: European markets finished lower. Asian markets ended with mixed results.

Thursday: Weekly jobless claims, 8:30 a.m. Eastern; retail sales, 8:30 a.m. Eastern; import and export prices, 8:30 a.m. Eastern; business inventories, 10 a.m. Eastern; 30-year Treasury bond auction, 1 p.m. Eastern.

News Sources:  CNBC and CNN Money