Stocks Fell for the Third Straight Session

Published on Monday, 24 September 2012 16:46 Written by Christopher Lynn

New York, September 24^th (TradersHuddle.com) – Stocks fell, with the S&P 500 logging its third straight decline amid ongoing global growth concerns and jitters over the debt crisis in the euro zone. Participants turned cautious in the prospects of the euro zone after reports of a disagreement between Germany and France over the banking union process and after reports suggest that Greece will likely need additional bailout funds.

The Dow Jones Industrial Average lost 20.55 points, or 0.15%. The S&P 500 index fell 3.26 points, or 0.22%, while the NASDAQ slumped 19.18 points, or 0.60%.

The market started in negative territory amid weak performance in overseas markets. Global participants were jittery over renewed global growth concerns, an unexpected drop in German business sentiment, and disagreement between Germany and France regarding the implementation of the banking union process.

Apple weighed on the futures as well, with the stock tumbling more than 2% in pre-market after announcing that it sold a record 5 million iPhones 5 after it launched on nine countries last Friday.

Stocks were able to comeback from session lows and traded amid a tug of war between losses and gains for some part of the session, but at the end, the major benchmark indices closed lower for the session, with the S&P 500 logging its third straight loss. Among the S&P 500 sectors it was a mixed bag, with the defensive plays leading the advancing sectors, while technology, consumer discretionary, and energy logged the worst performances.

Apple (NASDAQ: AAPL) underperformed in the session, losing 1.33% to $690.79. The stock was under pressure after news of worker unrest at one of Apple’s contract manufacter Foxconn factories in China. According to reports, the manufacturer that assembles iPhones was forced to shut down the factory following riots involving about 2,000 workers that resulted in some injuries. JPMorgan also noted that the 5 million iPhones 5 sold by Apple does not include any of the pre-order iPhones that have not shipped yet. Participants seemed to have sold the stock on the sales report for the new device, giving pause to the sharp rise of the stock in the past weeks.

Meanwhile, rival Google (NASDAQ: GOOG) outperformed, jumping 2.1% to $749.38. The stock set a new 52-week high of $750.04, as it has climbed more than 20% so far this quarter, making it the best performing stock in the NASDAQ 100 this quarter. Google logged the best gains in the tech sector for the session.

Other big tech names closed to significant losses. Dell (NASDAQ: DELL) slumped 1.98% to $10.18 and Hewlett-Packard (NYSE: HPQ) tumbled 2.16% to $17.21 after Evercore Partners cut its target prices on the PC makers to $12 from $14 and $18 from $19, respectively. In the case of HP, Mizuho also lowered its target price to $20 from $22. HP logged the worst performance in the Dow Jones Industrial Average.

Also in the blue chip index, United Health (NYSE: UNH) debuted as a new Dow component, replacing Kraft (NASDAQ: KFT), as the food maker will be splitting into two companies later in the year. United Health ended the session with a oss of 0.36%. Additionally, Pfizer (NYSE: PFE) helped the Dow and received a bid along the health sector. The stock gained 0.96% in the session, while logging a new 52-week high of $24.84.

In the financial space, banks saw some gains. SunTrust Banks (NYSE: STI) jumped more than 2.2% and logged the best performance in the sector amid takeover rumors. Meanwhile, JPMorgan (NYSE: JPM) gained 0.86% in the session, making it the second best Dow component.

In the consumer discretionary sector, JC Penny (NYSE: JCP) logged the worst performance, tumbling more than 4.7%. Participants continued to hammer the stock amid concern the turnaround will take much longer time, particularly amid a soft economic environment.

Lennar (NYSE: LEN) fell 1.47% to $36.96 despite posting quarterly results that topped expectations and reporting that orders rose for the sixth consecutive quarter. The homebuilder said that home deliveries jumped 28% from a year ago, while new orders surged 44%. Lennar was already trading at 52-week highs ahead of the report.

Meanwhile, Energy stocks logged weak performances as coal stocks led the declines. Alpha Natural Resources (NYSE: ANR) nearly 5%, while Peabody Energy (NYSE: BTU) slumped 4.5% after it was downgraded to Underperformed from Buy at Bank of America Merrill.

Elsewhere, Facebook (NASDAQ: FB) plunged 9%, dropping below the $21 per share level once again after a negative article in Barron’s. The financial publication said that Facebook is likely worth $15 per share, as the company’s business model is in need of drastic changes amid a rapid shift in its user base from computers to mobile platforms.