Stocks are looking to recover from the worst selloff of the year, one that took the Dow down 214 points on Tuesday.
The past five sessions of selling have shaved 550 points from the blue-chip average. The Nasdaq Composite fell 56 points, or 1.8%, and the S&P 500 fell 24 points, or 1.7%.
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The sector that got hit the hardest was consumer discretionary, including travel, clothing, and the cable companies. But the selloff was broad based; financials, industrials, and materials all lost more than 2% on the day.
As stocks sold off, volume spiked up. The uptick in trading activity was a reversal of Monday’s low-volume decline. Investors grew nervous as the markets' fear gauge -- VIX -- surged for the eighth-straight day, marking the longest advancing streak since 1987.
Meanwhile, the safe-haven Treasury market booked its fifth consecutive day of gains, as yields on the 10-year fell below 2%.
The opposite is happening in Italy; borrowing costs for Italians have more than doubled in a pair of bond auctions today. The interest rate investors are demanding is rising fast in both Italy and Spain, Europe’s No. 3 and 4 economies.
Investors here breathed a big sigh of relief last night when Alcoa (NYSE:AA) reported a surprise first-quarter profit after the closing bell. The materials giant said it made $94 million, or 9 cents a share, versus an expected loss of 4 cents. Revenue rose to $6 billion in the quarter, despite a 9% decline in the price of aluminum. Shares of Dow component Alcoa, and stock index futures overall, are pointing convincingly higher Wednesday morning.
Best Buy (NYSE:BBY) CEO and 28-year company veteran Brian Dunn is stepping down from the struggling electronics chain. Dunn said he was resigning voluntarily and on amicable terms with the board, but Best Buy released a statement later saying that it was conducting a probe into Dunn’s “personal conduct.”
Best Buy shares lost nearly 6% yesterday and are down another 1% this morning.
In addition to the CEO controversy, Best Buy has been under fire for failing to change with a shift in consumer shopping habits, including growing online commerce. A few weeks ago, Best Buy unveiled a restructuring plan that calls for closing 50 of its big-box stores. It lost more than $1.2 billion last year.