Stocks Recovered Late; Ended Flat

CATNew York, June 4th ( – Stocks closed flat for the session after a late session rally cut earlier losses that came after factory orders unexpectedly slumped, adding to the global growth woes. Market chatter over a Master Plan for tackling the debt crisis in the euro zone helped provide support to the European markets, which were thinly traded due to the U.K. was closed for the Queen’s Diamond Jubilee.


The Dow Jones Industrial Average lost 17.11 points, or 0.14%. The S&P 500 index added less than 1 point, or 0.01%, while the NASDAQ climbed 12.53 points, or 0.46%.


The market started with modest gains, as futures recovered from overnight losses amid chatter over a Master Plan being worked on by key European officials that will tackle the debt crisis. Asian markets reacted negatively to the weak U.S. jobs report and after Chinese Services PMI posted a 3-month low.


Price action quickly turned negatively, with stocks accelerating losses following an unexpected drop in factory orders, logging the third decline in four months. Stocks however were able to regain their footing and rallying into the close to end mixed for the session, with the broad market index ending near the unchanged line, while the NASDAQ finished with modest gains.


In the S&P 500, technology, consumer discretionary, and utilities logged the biggest gains, while industrials, financials, and energy slumped. Industrials were under heavy pressure, losing more than 1% in the session. Southwest Airlines (NYSE: LUV) logged the biggest decline in the sector, with shares tumbling 3.8% to $8.6. Other airline stocks didn’t fare any better after Delta (NYSE: DAL) reported May traffic metrics, which missed recent guidance. Shares of Delta plunged 11.6% to $10.18.


Also in the sector, Caterpillar (NYSE: CAT) slumped 2.6% to $83.26, posting one of the biggest percentage loss in the Dow Jones Industrial Average. Caterpillar has continued to weaken, as the global growth story continues to be under siege amid the weak economic data around the world.


Financials lost nearly 1% in the session as the sector, continued to be weighed down by weak economic data. JPMorgan (NYSE: JPM) tumbled 2.9% to $31, posting the biggest decline in the blue chip index. A report that JPMorgan was warned about its risk controls over a year ago, weighed on the stock during the session. Rival Bank of America (NYSE: BAC) slumped 1.7% to $6.90 despite being upgraded to Overweight at Evercore Partners. The stock broke below its 200day moving average at $7.18 last Friday.


Regions Financial (NYSE: RF) was also among the top decliners in the S&P 500 Index after the stock was downgraded to a Hold from Buy at Deutsche Bank. Regions tumbled more than 5%.


The energy sector was negative, but was able to close near the neutral line, as crude oil was able to snap its 4-session slide. Chesapeake Energy (NYSE: CHK) helped the sector, as it surged to the top of the broad market index. The stock rallied 6% on news that the company agreed to replace four of its current board members, while Aubrey McClendon will remain as CEO. Southeastern Asset Management, Chesapeake's largest shareholder, will nominate three of the new directors, while billionaire investor Carl Icahn and his affiliates will pick the fourth.


Technology was able to drive the gains in the tech heavy NASDAQ. However the gains in the sector didn’t help Hewlett Packard (NYSE: HPQ). The world’s largest PC maker slid 0.9% to $21.06, trading near a 7-year low, making HP the worst Dow component so far this year.


First Solar (NASDAQ: FSLR) rallied more than 4%, while credit card companies saw moderate strength, with MasterCard (NYSE: MA) gaining 2.2% and Visa (NYSE: V) climbing 1.7%.


Apple (NASDAQ: AAPL) climbed 0.59% to $564.29 after reversing from a low of $548.50. The stock was able to make a sharp rebound from the lows of the session. The company is scheduled to hold its WWDC on June 11th.  According to several blog reports, the company might unveil a beta TV operating system.


Elsewhere, Facebook (NASDAQ: FB) continued its slide, tumbling nearly 3% to $26.90 and logging a new low at $26.44. Bernstein initiated coverage on the stock with Underperform and a target price of $25.

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