Energy and retail stocks fell Wednesday, resulting in modest losses for the broader market. The three major indices — the S&P 500, Dow Jones Industrial Average and Nasdaq –each fell 0.3% on lower-than-average volume due to the bond market’s closing for Veterans Day.
The decline was led by retail (2.3%), energy (-2.1%), health care (1%) and consumer discretionary (-0.6%). Selling volume appeared to pick up in the last 30 minutes of trading on the NYSE Composite.
Macy’s, Inc. (M) plunged 14.1% after the company reported a big decline in quarterly sales and lowered its full-year forecast. The Wall Street Journal reported, “unsold goods [have] piled up inside its stores heading into what is shaping up to be a challenging holiday season.” The stock is now trading at two-year lows and down almost 40% year to date.
Anticipation of another increase in U.S. crude stockpiles caused oil prices to fall 2.9% to $42.93 a barrel.
Oil and gas company Anadarko Petroleum Corporation (APC) withdrew its offer for rival Apache Corporation (APA). Anadarko declined 3.8% and Apache was hit with a 7.3% loss.
Gold dropped 0.3% to $1,084.70 an ounce. And the euro gained slightly against the U.S. dollar at $1.0755, up 0.1%.
At Wednesday’s close, the Dow Jones Industrial Average fell 56 points to 17,702, the S&P 500 dropped 7 points to 2,075, the Nasdaq was down 16 points at 5,067, and the Russell 2000 was off 10 points at 1,178.
The NYSE Composite’s primary market traded less than 800 million shares with total volume of 3.7 billion. The Nasdaq crossed 1.7 billion shares. On the Big Board, decliners outpaced advancers by 1.3-to-1, and on the Nasdaq, decliners led by 1.8-to-1.
After topping six sessions ago just below 5,165, the Nasdaq has closed lower in four of the past five sessions. Wednesday’s close was near the low of the day with a final buildup of volume on what was otherwise a low-volume day. MACD flashed a clear sell signal, but again on low total volume, which lessens its negative impact.
A gap from 4,927 to 5,000, made in mid-October, is still open. And the 200-day moving average at 4,953, which is in the middle of the gap, makes it a likely target for a minor pullback.
Conclusion
With the big “W” bull market bottom in place, I must be bullish long term. However, with the massive overhead and Dow Theory still in a “non-confirmed” status, I’d be surprised by a high-volume break to a new high in any of the major indices.
With retailers under pressure at their make-or-break season and energy remaining in a bear market, our plan should be to sell into rallies, buy into pullbacks and not stick with anything too long.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
