Stocks fall amid a euro Slump; Oil Plunges (AAPL, AGU, BAC, BRCM, DAL, FSLR, HP, JOY, MOS, NEM, SLW, XOM)

Published on Wednesday, 14 December 2011 13:32 Written by Christopher Lynn

New York, December 14^th (TradersHuddle.com) – Stocks were under pressure following overseas weakness and as the euro slump spurred demand for safe haven assets. A sharp drop in crude oil on Dollar strength, inventory data, and the result of the OPEC meeting was weighing heavily on the energy sector. Financial stocks were turning positive helping pare the overall losses.

The Dow Jones Industrial Average was falling 0.6%. The S&P 500 index was losing 0.55%, while the NASDAQ was tumbling 1.2%

The market started with modest losses amid a slump in the euro, which traded below the key $1.30 level versus the Dollar and after Italian 5-year yields surged to a new euro era high following a weak auction. Speculation over a possible downgrade to France’s credit rating made the rounds around the trading desks

In Europe, equity markets closed at 2-week lows after losses accelerated through the session amid speculation of the possible downgrade to France’s AAA credit rating and as the euro continued to weaken below key levels on concern the euro zone debt crisis will impact growth in the region and globally. Sentiment in Europe was bearish following also comments from the Fed yesterday, which failed to provide a hint of further easing, while saying that downside risks remain elevated due to the debt crisis in Europe. A weak Italian 5-year debt auction added to woes.

Most of the key S&P 500 sectors were trading in negative territory, with energy, technology, and consumer discretionary posting the biggest declines, while financials and healthcare were slightly positive in the session.

Energy stocks were being impacted by the plunge in crude prices. Oil futures were tumbling more than 4%, to $95.97 per barrel barrel, as the euro slumped to an 11-month low versus the Dollar and as the OPEC said it agreed to a supply target of 30 million barrels daily, roughly in line with current production, but without a clear mechanism to reduce production to defend prices. Inventory data didn’t help either, adding to the woes. Exxon Mobil (NYSE:XOM), the largest U.S. energy producer, was losing 1.8% to $79.07, posting one of the biggest declines in the Dow Jones Industrial Average. Exxon has calculated support at $73.90 and resistance at $81.86.

Helmerich & Payne (NYSE:HP), the contract driller of oil and gas wells in the Gulf of Mexico and South America, was one of the worst performers in the sector, tumbling 5.7% to $54.06. Last week, the stock was added to the coveted Conviction Buy List at Goldman Sachs.

Materials were also weaker on Dollar strength. Metal prices were lower, with precious metals also seeing outsize losses. Gold futures were tumbling more than 4%, trading below $1600 per ounce, while silver was plunging 6.7% to $29.17 per ounce. Copper was also under pressure falling close to 5%.

In the miner space, Silver Wheaton (NYSE:SLW), the largest metal streaming company in the world, was tumbling 5.3% to $29.23, extending its yearly decline to 25%. Newmont Mining (NYSE:NEM), the largest gold producer, was falling 1.5% to $62.18 after trading as low as $60.84 on the lower prices for the bullion.

In the AG space, Agrium (NYSE:AGU) was falling 0.9% to $64.59, in line with the broad market decline. The board of Directors approved quadrupling its semiannual cash divided to $0.225 per share. The company’s Board also approved a substantial Potash expansion to increase annual production capacity by approximately 50%, bringing total annual nameplate capacity to three million tons. Rival Mosaic (NYSE:MOS) was tumbling 3.96% to $47.53, posting one of the biggest declines in the materials sector of the S&P 500.

Technology was also weaker and weighing on the NASDAQ and the broad market due to its weighing. First Solar (NASDAQ:FSLR), the largest maker of thin film solar modules in the world, was plunging to the bottom of the S&P 500 after it lowered its sales guidance for 2011 and issued 2012 guidance below consensus. The stock tumbled close to 20% to $34.11, posting a new multiyear low of $33.08 after it said that continued delays of certain projects in First Solar’s systems business due to weather and other factors was impacting its 2011 results.

Apple (NASDAQ:AAPL) was also weak, losing 2.25% to $380.05, breaking below its 20day moving average at $386.76 and trading at new lows for the month. The stock closed below its 50day moving average in the prior week, leaving the stock open for further weakness. Recently brokerage houses have been reiterating their ratings and target prices, citing iPhone 4S strong demand and a possible launch of the iPad 3 in the first quarter next year; however concern over retail sales not being as strong as expected, coupled with worries over global growth weighed on sentiment. Earlier in the week, Bernstein reiterated Apple as its Top Pick with a target price of $575, saying the market has been overly pessimistic on the stock in the recent weeks. And Ticonderoga said that Apple had its best November on record, according to its internal sales barometer. The firm said sales in November jumped 17% month over month. The stock has calculated support at $363.32 and resistance at $396.41.

On the flip side in the sector, Broadcom (NASDAQ:BRCM) was jumping 2.5% to $28.89, posting the biggest gain in the sector, after the company said that it sees fourth quarter revenue at the high end of the prior guidance, which would be above consensus. The company sees revenues of $1.8 billion versus consensus of $1.74 billion.

Elsewhere, Joy Global (NYSE:JOY), the underground and surface mining equipment maker, was tumbling 10.95% to $75.29, posting one of the biggest declines in the broad market index. Joy disappointed with its quarterly results of EPS of $1.82 and inline revenues, while issuing cautious 2012 guidance that was inline with consensus.

Delta (NYSE:DAL), the second largest airline in the world, was climbing 1.6% to $8.12, along other airline stocks amid a plunge in crude oil prices.

And Bank of America (NYSE:BAC), the largest U.S. lender, was flat in the session after trading as low as $5.20, a new December low. The stock broke below calculated support at $5.53 earlier in the week and might be pushed by traders to test its multiyear low of $5.03 that was just logged two weeks ago.