FOX Business: The Power to Prosper
Stocks slid lower for a second straight day Wednesday as tumult in the Middle East, crude oil touching $100, and Dow component H-P diving 10% sent anxious traders looking for safer ground. The selloff marks the worst two-day streak for markets since August.
The Dow Jones Industrial Average fell 107.01 points, or 0.88%, to 12105.78, the Standard & Poor's 500 lost 8.04 points, or 0.61%, to 1307.40 and the Nasdaq Composite slumped 33.43 points, or 1.21%, to 2722.99. The FOX 50 dropped 4.87 points, or 0.52%, to 931.28.
Hopes for a rebound on Wall Street from Tuesday's tumble quickly faded as unrest in the Middle East shook traders and crude oil broke through the $100-a-barrel threshold on an intraday basis for the first time since October 2008.
"What’s happening in the Middle East is taking investor confidence out of the market," said Jonathan Corpina, senior managing partner at Meridian Equity Partners.
Word of protests potentially spreading to Saudia Arabia -- the biggest OPEC oil producer -- has sparked fears among some market participants that energy prices will continue surging, derailing the global economic recovery.
While industrial and consumer discretionary stocks were slammed by spiking oil prices, energy stocks, such as ExxonMobil (NYSE: XOM), got a boost from the move.
Aside from the red-hot oil markets, traders responded negatively to the situation in tumultuous and oil-rich Libya and tech stocks were hurt by Hewlett-Packard's (NYSE: HPQ) gloomy guidance.
The losses come after the blue chips tumbled 178 points on Tuesday amid rising fears the violence in Libya will cause a disruption in oil supplies.
Traders were uncertain about what the future will hold for stocks, which had been a hot streak since the beginning of this year. Indeed, the Dow closed at fresh 2-1/2-year highs on Friday.
"This market is going to be on eggshells for a little while," Corpina said. "Investors have been waiting for an opportunity to take their money out of the market."
Echoing Corpina, Doreen Mogavero, a NYSE trader, told FOX Business: “I really do think with this much uncertainty in the Middle East we need to reposition and be a little more defensive.”
Most of the Dow's 30 stocks declined, led by H-P, Intel (INTC) and General Electric (GE). The benchmark index's best performers were oil giants Exxon (NYSE: XOM), Chevron (CVX), and food-maker Kraft (KFT).
For a second day in a row, U.S. stocks were moving in the opposite direction of the price of crude oil, which on Tuesday surged 8.55% -- its largest one-day gain since April 2009 -- due to the threat posed by the violence in oil-rich Libya. After initially rising just slightly, crude shot up to $100.00 a barrel and settled up $2.68, or 2.81%, to $98.10. Gold touched a new seven-week high and settled up $12.90 per troy ounce, or 0.92% to $1413.40.
Libya, Africa's third-largest crude producer, continues to be rocked by chaos caused by clashes between protesters demanding the ouster of longtime leader Muammar al-Qaddafi's rule and his supporters. Some reports put the death toll in Libya at more than 1,000.
The widespread violence marks the first in an OPEC nation during the recent Middle Eastern tensions and has sparked concern it could spread to other oil-producing nations, namely Saudi Arabia. According to a report from Nomura, crude could surge to $220 a barrel if Libya and Algeria halt production.
Meanwhile, Hewlett-Packard, the world's largest tech company by revenue, tumbled nearly 10% as its earnings beat was vastly overshadowed by its lower sales guidance.
The news weighed on other tech stocks such as Intel (NASDAQ: INTC) and Amazon.com (AMZN).
Wall Street had little positive reaction to a new report from the National Association of Realtors showing existing home sales rose 2.7% in January to an annual rate of 5.36 million units, surprising analysts who had called for a decline of 2.1%. However, the median price for existing homes slid 3.7% year-over-year to $158,800 -- the lowest level since April 2002.
Nasdaq OMX Group (NDAQ) is willing to make a joint bid with Intercontinental Exchange (ICE) worth $11 billion to acquire Big Board parent NYSE Euronext (NYX), according to FOX Business's Charles Gasparino. The potential hostile bid could force Germany’s Deutsche Bourse to raise its $9.5 billion deal to acquire NYSE Euronext.
Apple (Nasdaq: AAPL) shareholders voted against a preliminary measure that would have forced the tech giant to create a public succession plan for CEO Steve Jobs, who is currently on an indefinite medical leave. Apple contends publicly stating potential executive candidates will hurt its ability to attract and retain top talent.
Lowe's (LOW) ticked lower as the home improvement retailer's earnings and sales beat was overshadowed by its disappointing guidance for the current quarter.
Toll Brothers (TOL) surprised Wall Street by saying it swung to an unexpected profit of 2 cents a share, compared with forecasts for a loss of 7 cents a share. Revenue rose 3% to $334.1 million, boosted by a 7% jump in average delivery price to $586,000.
Dollar Tree (Nasdaq: DLTR) reported underwhelming sales figures for the fourth quarter, driving shares of the retailer lower despite earnings that were inline with analysts’ expectations.
Saks (NYSE: SKS) reported revenue figures that met the Street’s expectations, but downward momentum on retailers dragged shares of the high-end retailer lower.
TJX Companies, the parent of T.J. Maxx and Marshalls, said its fourth quarter profit was down 15% as a result of closing its A.J. Wright chain of stores.
The U.K.'s FTSE 100 fell 1.22%, to 5923.53, France's CAC 40 dropped 0.92%, to 4013.12 and Germany's DAX tumbled 1.69%, to 7194.60.
In Asia, Japan's Nikkei 225 dropped 0.80% to 10579.10, Hong Kong's Hang Seng lost 0.36% to 22906.90 and China's Shanghai Composite rose 0.25% to 2862.63.