Stocks Closed Lower amid Greece Jitters and Mixed Data

Published on Wednesday, 22 February 2012 17:38 Written by Christopher Lynn

New York, February 22^nd (TradersHuddle.com) – Stocks closed lower, as optimism over the second Greek bailout faded amid mixed PMI data overseas and concern Greece would still need additional funds to avoid an eventual default.

The Dow Jones Industrial Average lost 27.02 points, or 0.21%. The S&P 500 index fell 4.55 points, or 0.33%, while the NASDAQ slid 15.40 points, or 0.52%.

The market started the session with modest losses following weakness in Europe after weaker than expected PMI data in Germany and the euro zone. Chinese PMI data was better than expected, climbing to a four month high, but still signaling contraction; which spurred little excitement in pre-market. Concerns over Greece remained despite the deal reached earlier in the week for the second bailout, as Fitch downgraded the country’s debt deeper into junk status.

In Europe, equity markets posted modest losses amid recessionary fears and ongoing Greek concern. Mixed PMI data in the region, with Germany and the euro zone coming in lower than expected, while France’s PMI beating expectations, highlighted the difficult environment for the region’s economy amid the impacts of the debt crisis. Despite the second bailout fro Greece, now some participants worried if that even with the new funds the indebted nation will not have enough money to avoid a default, amid the sharp tailspin in its economy. 

Weighing also on sentiment was data from existing home sales in January. According to the National Associations of Realtors sales jumped 4.3% to 4.57 million units, hitting a 1 ½ year high, but it also reported a sharp downward revision to December sales figures that now showed sales for that month actually fell. Homebuilders were moving lower, particularly Toll Brothers (NYSE: TOL), which was seeing additional pressure in the session after it reported an unexpected loss hurt by an increase in cancellations and lower home deliveries in the quarter. Shares of Toll Brothers tumbled 5.15% to $22.48.

Technology and hardware makers were in focus following the earnings report from Dell (NASDAQ: DELL) and ahead of the release of Hewlett-Packard’s (NYSE: HPQ) quarterly results.

Dell fell the pressure, as participants sold the stock sharply, after it missed earnings expectations by $0.01 per share on revenues that were inline with consensus. The PC maker provided lackluster guidance, which coupled by a downgrade to a Hold at Needham and a downgrade to a Neutral at Citigroup provided additional reasons for the sell off. Dell plunged 5.8% to $17.15, posting the second biggest decline in the S&P 500.

Meanwhile, rival Hewlett-Packard slid 1.40% to $28.94 ahead of its own report. In afterhours the stock was falling another 0.3% after the company results beat earnings expectations by $0.05 per share on revenues that were light, falling 7% year over year to $30.04 billion. The company issued downside earnings guidance, expecting to earn $0.88 to $0.91 per share, as the company is expecting consumers to continue to curtail personal computing buying amid an increase in share from tablets and smartphones.

Apple (NASDAQ: AAPL) edged 0.35% lower to $513.04 in the session amid weakness in hardware makers. Credit Suisse raised its target price to $600 from $550, but it failed to provide a boost amid additional headlines from the trademark dispute over the iPad name in China. Shenzen Proview was asking a local court to block the sale of iPads in the affluent city of Shanghai amid claims that it owns the iPads name in that country.

Financials posted the biggest declines in the session among the S&P 500 Select Sectors, falling more than 1%. Citigroup (NYSE: C) was one of the top decliners amid big banks, with shares tumbling 3% on a report the lender might face a potential multi-billion write down as negotiations with Morgan Stanley on the unwinding of its stake in Smith Barney start this spring. Citi tumbled 3% to $32.36.

Rival Bank of America (NYSE: BAC) lost close to 2%, posting the second biggest percentage decline in the Dow Jones Industrial Average and closing just above its 200day moving average at $7.92.

Meanwhile, energy stock staged a gain in the session despite a minor pullback in crude oil. Oil however closed above $106 per barrel, while natural gas rallied 1.4%. Nabors (NYSE: NBR), the land driller contractor, surged to the top of the S&P 500 after the company beat expectations on both the bottom and top lines.

And Range Resources (NYSE: RRC) also provided a boost to the sector, as shares jumped 2.85% to $66.10. The company posted earnings that were better than expected, as the reported loss was narrower than consensus, breaking the streak of disappointing quarterly results.

Elsewhere, Wal-Mart (NYSE: WMT) continued with its slump, tumbling to the bottom of the blue chip index. The stock fell 2.5% to $58.60, closing just above calculated support at $56.32, after it was downgraded to Market Perform from Strong Buy at Raymond James. The world’s largest retailer missed earnings expectations in the prior session.

And MGM Resorts (NYSE: MGM) tumbled 2.96% to 13.77 after its earnings results failed short of expectations. The company did report better than expected revenues, as sales jumped 55.7% year over year.