Market Update

A recent wave of selling has forced stocks lower, making for weak trade after it had been mostly mixed.

News that officials in China intend to expand the country’s investment in Europe rekindled buying interest ahead of the open, but enthusiasm was dampened by concerns that efforts to get bailout funds to Greece could become bogged down because of doubts that Greece may not fully follow through with its pledges for new austerity measures.

The broad market spent the morning chopping along with a modest gain, but a sudden barrage of selling has since sent it into the red. Meanwhile, the Nasdaq is now at the neutral line after it had been up nearly 1% about 30 minutes ago. Tech stocks were a primary source of strength for the Nasdaq, but they, too, have been undercut by the recent wave of selling. As for the Dow, lackluster action among blue chips has left it in the red for almost the entire day.

Comcast (CMCSA 28.56, +1.31) and Teva Pharma (TEVA 45.38, +1.86) have been standouts following their latest quarterly reports, which featured upside earnings surprises. Deere & Co. (DE 85.90, -3.15) also posted earnings that exceeded what had been expected, but the stock has slumped to test its three-week lows. Meanwhile, apparel retailer Abercrombie & Fitch (ANF 49.50, +4.91) shares have surged 11% even though the company’s latest quarterly earnings came short of the Wall Street consensus. However, the company’s management reiterated their full-year guidance, which they actually deemed conservative.

As for economic data, the eurozone reported a 0.3% decline in fourth quarter GDP. Germany’s GDP declined by 0.2%, but economic activity in France expanded by 0.2%. Although largely unimpressive, the headline numbers were generally a bit better than or on the order of what had been expected. Domestic data featured an improved survey on manufacturing activity in the New York, flat monthly industrial production, and an improved monthly Housing Market Index. On their way are minutes from the most recent FOMC meeting (2:00 PM ET).

Market Update