Stocks Slumped as Jitters Increased Ahead of Bernanke

Published on Thursday, 30 August 2012 18:09 Written by Christopher Lynn

New York, August 30^th (TradersHuddle.com) – Stocks slumped as participants turned jittery ahead of the Fed Chairman’s speech in Jackson Hole, WY. Weaker than expected jobless claims data, coupled with reports that Spain might delay its decision on seeking a bailout weighed on the session and dampened investors’ appetite for risk.

The Dow Jones Industrial Average lost 106.77 points, or 0.81%. The S&P 500 index fell 11.01 points, or 0.78%, while the NASDAQ tumbled 32.48 points, or 1.05%.

The market started with modest losses following a negative tone in overseas markets and slightly worse than expected jobless claims data. Participants turned jittery ahead of Bernanke’s speech in Jackson Hole, WY scheduled for tomorrow.

Weekly jobless claims totaled 374,000, higher than the 370,000 claims figure that was widely expected. Meanwhile, continuing claims, fell to about 3.316 million from 3.321 million. Separately, personal income increased in July by 0.3%, which is in-line with expectations. Personal spending increased by 0.4%, which is lower than the expected increase of 0.5%.

Retailers were also active reporting same store sales data for August. Costco (NASDAQ: COST), GAP (NYSE: GPS), and Target (NYSE: TGT) were some of the retailers that posted significant beats. Costco gained 1.5% to $98.59 logging the best performance in the consumer staples sector and posting a new all-time high of $99.06. Gap jumped 2.67% to $36.11, posting a new multiyear high of $36.60. Target on the other hand slid 0.16% in the session after trading near its 52-week high.

The retreat was broad based, with all of the S&P 500 sectors ending in the red. Both technology and energy slumped more than 1%, followed by the industrial sector. Consumer staples along with healthcare logged the smallest declines.

First Solar (NASDAQ: FSLR) was the biggest drag in the broad market index and the technology sector, plunging 18.7% in the session. Investors fled after Bloomberg reported the company halted shipments and installations on its Agua Caliente Project in Arizona until 2013.

Also weighing on the sector, Intel (NASDAQ: INTC) slumped 1.6%, posting the second biggest decline in the Dow Jones Industrial Average, while Apple (NASDAQ: AAPL) lost 1.4% to $663.87 amid reports late in the session that Apple CEO Tim Cook and Google CEO Larry Page were having secret patent talks following Apple’s legal victory against Samsung last week. Additionally, Amazon (NASDAQ: AMZN) said that its Kindle Fire Tablet was currently sold out and have captured 22% of the tablet market, which is dominated by Apple’s iPad. Amazon logged a new all-time high at $250 per share earlier in the session.

Caterpillar (NYSE: CAT) dropping the most in the blue chip index weighed on the industrial sector. The world’s largest earthmoving equipment maker fell 1.9% to $84.47, closing below its 50day moving average at $84.94.

Sears Holding (NASDAQ: SHLD) was another of the top drags in the S&P 500. The stock tumbled nearly 8% on news that it is being boot out of the S&P 500. Sears public float has been well below the 50% threshold for inclusion for an extended period of time and is no longer considered representative of the index. Shares of Sears have been a staple of the index for about 55 years. Chemical maker Lyondellbasell (NYSE: LYB) will replace Sears on the index, with shares jumping 3.8% on the news.

Elsewhere, Pandora Media (NYSE: P) surged 14.3% to $11.52 after the company posted break-even earnings, topping expectations. Pandora also boosted its current-quarter revenue outlook. For its fiscal 2013, the Internet radio company expects both earnings and revenue to be above consensus.