Stocks Modestly Lower, as Greece Concerns Weighed

Published on Monday, 06 February 2012 20:15 Written by Christopher Lynn

New York, February 6^th (TradersHuddle.com) – Stocks closed with modest losses, as participants decided to stay in the sidelines amid increased jitters over a Greek disorderly default and concern over the strength of Chinese economic growth.

The Dow Jones Industrial Average fell 17.10 points, or 0.13%. The S&P 500 index lost less than 1 point, or 0.04%, while the NASDAQ dropped 3.67 points, or 0.13%.

The market started with modest losses amid weakness in Europe and mixed trade in Asia. Concern over Greece and the IMF cutting its Chinese economic growth outlook weighed on sentiment.  

In Europe, stocks slid from a 6-month high amid increased worries over the possibility of a disorderly Greek default, as the country has not yet nailed down a deal with its private bondholders and politicians struggle to implement the necessary austerity measures in order to access new bailout funds.

Despite the slow news flow, markets were able to trim their losses in afternoon trading, as the euro reversed from earlier weakness to post a modest gain against the Dollar. Greece’s ongoing woes with austerity measures and creditors continued to keep investors on edge, despite a new round of rumors around the trading floors that a deal was near.

Energy was the clear outperformer in the session, with the Energy SPDR ETF (NYSE: XLE) gaining 1.2% to $73.64. Technology was the only other sector finishing in green territory, while healthcare, materials, and utilities posted the biggest declines.

Despite crude oil falling 1% to settle below $97 per barrel amid Greek woes and the IMF cutting its economic growth outlook for China, oil equities had a decent day, with Chevron (NYSE: CVX) jumping more than 1% and posting one of the top gains in the Dow Jones Industrial Average.

In the after-hours session, Anadarko Petroleum (NYSE: APC) was up 1.4% despite reporting a fourth-quarter loss of $358 million, or 72 cents a share. Anadarko had closed the session with a 1.7% loss.

Also in the sector, Alpha Natural Resources (NYSE: ANR), the steam and metallurgical coal producer, jumped 3.34% to $23.54 after trading as low as $22. The company announced late Friday that it was cutting coal production in central Appalachia due to the decreased demand. Alpha Natural will cut about 4 million tons of production by impacting 10 of its mining operations.

Meanwhile in the financial sector, Bank of America (NYSE: BAC) continued in its upside swing, with shares jumping to the top of the blue chip index. BofA climbed 1.7% to $7.97, as investors kept pushing the stock ever closer to the $8 per share level, as put action showed increased activity perhaps as some traders doubt the sharp gains in the bank.

Healthcare related stocks saw pressure, with Medco Solutions (NYSE: MHS) plunging the most in the broad market index, on concern over the proposed buyout by Express Scripts (NASDAQ: ESRX). Medco tumbled 8%, while Express Scripts lost more than 4%.

The news however was seen as a bullish development for Walgreen (NYSE: WAG), which jumped close to 2% on the news.

Also in the space, Humana (NYSE: HUM) tumbled 5.4% to $85.25, as the company’s quarterly results fell short of revenues expectations, while its lackluster guidance disappointed investors.

Technology socks edged higher with the Technology SPDR ETF (NYSE: XLK) trading very close to its 52-week high of $27.79. Apple (NASDAQ: AAPL) however was able to post a new all-time high of $464.98, with shares closing with a 0.93% gain in the session, settling at $463.97. Jefferies joined the speculation about the Apple TV set, which according to the firm, the tech giant will likely name iTV. Jefferies said that video content would also become the next big focus for the iPad and the iPhone maker.

Elsewhere in the consumer discretionary space, Netflix (NASDAQ: NFLX) jumped 2.8% in the session amid blog reports that suggested that Netflix Streaming service could be included in the highly anticipated Apple TV set. Shares of Netflix traded as low as $121.85 after Coinstar (NASDAQ: CSTR), the operator of the Redbox DVD rental kiosks, announced that it was teaming up with Verizon (NYSE: VZ) in order to provide a streaming service aiming to take on Netflix.

Amazon (NASDAQ: AMZN) tumbled 2.42% to $183.13 amid reports that the largest online retailer was looking at opening a brick an mortar store in the Seattle area, looking t showcase its Kindle line of products and Amazon published e-books. It was not clear however how this strategy could be rolled out nationally, as it will undermine its tax advantage mid other national retailers.

And Abercrombie & Fitch (NYSE: ANF), the specialty retailer, surged 9.5%, the biggest gain in the S&P 500. The stock was rebounding after trading at 52-week lows last week amid disappointment over its gloomy outlook.