Bulls in Hiding: Wall Street Tumbles 1%

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Published January 13, 2014

| FOXBusiness

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Wall Street suffered one of its worst selloffs in months as traders fretted about corporate earnings season and questioned whether U.S. stocks are overvalued. 

Today's Markets

The Dow Jones Industrial Average fell 179 points, or 1.1%, to 16258, the S&P 500 skidded 23.2 points, or 1.3%, to 1819 and the Nasdaq Composite slid 61.4 points, or 1.5%, to 4113.

The year has been off to a quiet start, with U.S. equity markets wavering in a fairly tight range. It's been quite the contrast to the nearly 30% surge the S&P 500 made in 2013. Indeed, the gains were so vast analysts at Goldman Sachs cut their three-month outlook on U.S. equities to "underweight," citing the "strong performance." The investment bank is still "overweight" stocks overall. 

Michael Block, chief strategist at Rhino Trading Partners, blamed Monday's downturn on investors "rotating" into new positions and worries about earnings guidance cuts. He said it appears the drop could be a relatively minor "blip" since corporate buyout activity remains strong and Treasury bond yields are remaining stable. The yield on the 10-year Treasury bond fell just 0.031 percentage point to 2.827% as traders bought-up the asset class despite slowing purchases by the Federal Reserve. 

Nevertheless, the losses on Wall Street were ugly. Every major S&P 500 sector was in the red on the day. The broad S&P 500 suffered its worst day since November, and the Dow fell the most since September. 

A busy week could help provide more direction. Many of the biggest U.S. banks, including J.P. Morgan Chase (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Goldman Sachs (GS) and Morgan Stanley (MS) are set to post earnings. On top of that, Dow components General Electric (GE), Intel (INTC) and American Exprss (AXP) are set to report. 

On the economic calendar are data on retail sales, inflation, consumer sentiment and the housing market. 

In corporate news, Goldman Sachs boosted its price target on Twitter (TWTR) to $65 from $46, according to a report by Reuters. Japan-based Suntory holdings said it would buy spirits maker Beam (BEAM) for $16 billion, including debt. The tie-up will make the world's third-biggest spirits company, according to the firms. 

In commodities, U.S. crude oil futures fell 58 cents, or 0.63%, to $92.13 a barrel. Wholesale New York Harbor gasoline fell 0.13% to $2.666 a gallon. Gold was flat at $1,247 a troy ounce. 

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http://www.foxbusiness.com/markets/2014/01/13/bulls-in-hiding-wall-street-tumbles-1/