Stock Market Selloff Broad-based Selling in the S&P 500, Nasdaq, and Dow Jones
Stiff selling on Friday resulted in SMF PRO TRADERS REVERSAL THAT MARIO TALKED ABOUT IT WAS the stock market's worst weekly loss since January and marked a weak finish to April watch the weekly video that Mario Marciano said how the market would end up. Still, the stock market was able to book its third straight monthly gain.
The early tone of trade tepid as market participants made little response news that the first quarter GDP hit an annualized rate of 3.2%.
The headline number was essentially on par with the 3.3% increase that had been widely expected, but more pleasing was that personal consumption increased 3.6%, which was stronger than the 3.3% increase that had been widely anticipated.
The failure of the report to bring buyers into trade eventually gave way to widespread weakness. The selling effort was initially focused on financial plays and tech plays... Financials fell 2.5% as investment banks dropped 6.3% amid news that
Goldman Sachs (GS 145.20, -15.04) will be part of a federal criminal probe and tech stocks tumbled 2.2% as semiconductor names fell 4.5%... Such steep losses among the two sectors, which combine to make up some 35% of the S&P 500 market weight, imbued the broader market, such that by the close declining issues outnumbered advancers by nearly 7-to-1 in the broader market.
Volatility spiked as a result of the stiff selling effort. In turn, the Volatility Index, often dubbed the "fear gauge," spiraled nearly 20% higher... Utilities stocks were able to gain, though. The sector settled 0.5% higher as many participants sought the sector's relative safety and the support of the sector's plus-4% dividend yield, based on current prices... Gold also gained as a result of the increased volatility and weakness in the equity market.
The yellow metal settled 1.0% higher to $1180.70 per ounce, a 2010 closing high. That actually helped gold stocks in the face broader market weakness... Conviction among gold buyers was strong enough to disregard an upturn by the dollar against competing currencies. The greenback closed with a slight loss after it had turned up from a loss of 0.5% amid a stronger euro, which benefited from further contraction in the bond yields of Greece and Portugal...
The dollar still finished the week with a 0.6% gain, which puts it up 0.5% for the month and up some 5% for the year. As for the S&P 500, it fell 2.5% this week, but it still managed to close April with a 1.1% gain. The stock market is still up more than 6% year-to-date and less than 3% off of its 52-week high. Dow -1.4%, Nasdaq -2.0%, S&P 500 -1.7%, Nasdaq 100 -2.1%, S&P 400 -2.0%, Russell 2000 -2.9%