E-mini stock indexes look weak heading into Q4

Market Snapshot for October 3, 2011:

  • Closing Prices: DOW 10,655.30 (-258.08, -2.36%),S&P 500 1,099.23 (-32.19, -2.85%), NASDAQ 2,335.83 (-79.57, -3.29%), Nikkei 225 8,545.48 (-, -), DAX 5,376.70 (-125.32, -2.28%), FTSE 5,075.50 (-52.98, -1.03%)
  • OIL 76.16, GOLD 1,670.00, SILVER 30.90
  • EURO 1.3189, YEN 76.68, BRITISH POUND 1.5429, U.S. DOLLAR INDEX 79.935

Market Logs New 52-Week Closing Lows

The top headlines in recent months have focused upon several core topics: dire state of the U.S. economy (particularly housing and unemployment), the European sovereign debt crisis (focusing currently on news that Greece is expected to fall short of deficit targets for this year and next), and the potential slowdown of the Chinese economy. By the end of the quarter, the Dow Jones Industrial Average ($DJI), S&P 500 ($SPX), and Nasdaq Composite ($COMPX) all posted quarterly losses over 12%.

The third quarter of 2011 did not get off to a much better start. In fact, both the Dow and S&P 500 ended the session on Monday at new 52-week closing lows.

The Dow Jones Industrial Average ($DJI) ended the day on Monday with a loss of 258.08 points, or 2.36%, and closed at 10,655.30. Wal-Mart (WMT) (+0.12%) was the only gainer in the index. The weakest performers were Bank of America (BAC) (-9.64%), Alcoa (AA) (-7.00%), JP Morgan Chase (JPM) (-4.88%), and Caterpillar (CAT) (-4.46%).

The S&P 500 ($SPX) finished the session with a loss of 32.19 points, or 2.85%, and closed at 1,099.23 with a minor breech of the 1,100 price point. Only twelve of the components in the index posted a gain. Yahoo (YHOO) (+2.73%) and Lorillard Inc. (LO) (+2.03%) were the only ones to post a gain over 1%. Out of the S&P 500's 10 industry groups, none posted a gain. The top declining sectors were financials (-4.5%), energy (-3.3%), and health care (-3.2%). The weakest individual percentage performers in the index were Micron Technology (MU) (-14.09%), Tenet Healthcare Corp. (THC) (-12.65%), AK Steel Holding (AKS) (-11.77%), and Advanced Micro Devices (AMD) (-10.83%).

The Nasdaq Composite ($COMPX) ended the session lower by 79.57 points, or 3.29%, on Monday and it closed at 2,335.83. The strongest performers in the Nasdaq-100 ($NDX) were Yahoo (YHOO) (+2.73%) and Research In Motion (RIMM) (+0.99%). Only 4 of the 100 posted a gain. The top percentage decliners were Micron Technology (MU) (-14.09%), Vertex Pharmaceuticals (VRTX) (-8.93%), Autodesk (ADSK) (-8.42%), and First Solar (FSLR) (-8.40%).

Dow Jones Industrial Average (Figure 1)

Keep Your Eyes Open

This week is a busy one on the economic front. The European finance ministers meet Monday and Tuesday, while the European Central Bank will hold its rates meeting on Thursday. Recent speculation suggested that the bank could cut rates once again, but sentiment has once again shifted in favor of them holding steady.

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