Reply #110: End of the day stuffs.

[ozymandius]

Dow 8,564.53 Down 65.15 (0.75%)
Nasdaq 1,508.34 Down 32.38 (2.10%)
S&P 500 868.57 Down 11.16 (1.27%)
10-Yr Bond 2.533% Down 0.056
NYSE Volume 5,020,730,500
Nasdaq Volume 1,693,853,625

4:25 pm : Stocks struggled as investors grappled with ongoing uncertainty and the threat of continued losses from the financial sector.

The fate of the Big Three automakers remains uncertain, even though the White House signaled that a more thorough relief plan for automakers is on the way. While the comments aim to reassure investors, details remain absent. There has been no detail on timing, amounts, or terms. General Motors (GM 4.08, +0.14) and Ford (F 3.18, +0.14) both finished higher.

Financials (-4.0%) made up the session's worst performers, thanks to notable weakness in major banks like JPMorgan Chase (JPM 28.63, -2.31) and Bank of America (BAC 14.14, -0.79). JPMorgan had its shares downgraded to Underperform by analysts at Merrill Lynch, citing exposure to lending markets. Shares of Bank of America suffered on related weakness. Reports indicated Bank of America is laying off top executives, which follows announcements last week that the bank will cut between 30,000 and 35,000 employees from its workforce.

Investors also sent shares of Goldman Sachs (GS 66.46, -1.28) and Morgan Stanley (MS 13.64, -0.21) lower. Shares of the former investment banks have been shunned in recent sessions as investors anticipate heavy losses from the pair when they report quarterly results Tuesday and Wednesday, respectively.

Losses stemming from the financial sector have wreaked havoc on the broader financial system and, in turn, the economy. November industrial production slipped 0.6%, which was about in-line with expectations, but reflects the underlying weak trend. In November, manufacturing output fell a sharp 1.4%.

The recent drops suggest business retrenchment is underway as production is now down 5.5% over the past year. Declines of about 0.5% per month are likely in the immediate months ahead.

Such trends have the Federal Open Market Committee (FOMC) fighting to kick-start lending in order to induce economic growth. As such, fed funds futures imply a reduction to the fed funds target rate is certain. There is currently a 66% implied probability the target rate will be cut to 0.25% from 1.00%. There is a 34% implied probability the rate will be cut to 0.5%.

The expected drop in interest rates combined with weak economic conditions has currency traders rotating out of U.S. dollars. The greenback slipped roughly 1.6% against a basket of major foreign currencies.

The dollar's slide helped fuel an early advance in commodities such as natural gas, gold, silver, and crude oil. Crude was up as much as 8.2% during the session, but came under pressure as the threat of a production cut from OPEC was no longer a surprise. Crude prices already advanced more than 10% last week alone. OPEC meets Wednesday and is expected to cut daily production by 2 million barrels.

The initial gains helped the energy and materials sectors stand out as early leaders. Energy was up 2.7% at its session high, while the materials sector was up 2.2% at its session high. However, the gains turned to losses as sellers extended their reach and oil went on the slide. Energy finished 0.3% lower, while materials shed 0.4%.

All 10 of the major economic sectors settled lower, which contrasts with the broad-based gains sported shortly after the session's opening bell.

European stocks also traded with weakness, despite sporting gains through the first half of their session. France's CAC shed 0.9%, while Germany's DAX dropped 0.2% and London's FTSE fell 0.1%.

Asian markets fared far better, though their markets were closed before weakness crept into U.S. markets. Hong Kong's Hang Seng advanced 2.0%. Japan's Nikkei climbed 5.2%.DJ30 -65.15 NASDAQ -32.38 NQ100 -2.1% R2K -3.4% SP400 -2.6% SP500 -11.16 NASDAQ Adv/Vol/Dec 679/1.68 bln/2074 NYSE Adv/Vol/Dec 818/1.21 bln/2309