Economic fears and tumbling energy prices sent the Dow deep into the red on track to suffer its first nine-day losing streak since the Carter Administration.
Today's Markets
As of 12:26 p.m. ET, the Dow Jones Industrial Average dipped 132 points, or 1.1%, to 11,731, the S&P 500 slumped 13 points, or 1.1%, to 1,241 and the Nasdaq Composite fell 19.2 points, or 0.72%, to 2,650. The FOX 50 fell 8.9 points, or 0.96%, to 888.
Wall Street had been much deeper in the red earlier in the session, with the Nasdaq down nearly 2% and the Dow off 150 points.
The early selling was triggered as fears of a double-dip recession were bolstered by some new reports released, including one showing the services sector expanded at a slower pace than expected pace in July.
Wall Street has been unable to rally around the lifting of the U.S. debt ceiling in time to avert a catastrophic default as the focus has once again shifted to the economy. Recent data showing the manufacturing sector has nearly stalled, weakness in the consumer sector and a downward revision to economic growth has sparked concerns among economists, worrying market participants.
Indeed, the worries have weighed heavily on the markets, with the blue chips shedding 858 points over the last eight days. In fact, the Dow is in jeopardy of its first nine-day losing streak since February 1978 and has already notched its first eight-day slump since the financial crisis three years ago.
“I think we are pricing in a very slow growth environment and that’s having an effect on equities,” said Nick Kalivas, vice president of financial research at MF Global. “You’re seeing a material rethinking of what the profit outlook is. Liquidation is pretty strong.”
Selling picked up steam as the Institute for Supply Management said its non-manufacturing PMI fell to 52.7 in July from 53.3 the prior month, short of expectations of 53.6. Readings above 50 point to expansion, while those below 50 point to contraction.
Likewise, the Commerce Department said factory orders fell 0.8% in June, a bigger decline than the 0.7% Wall Street estimated.
The number of planned layoffs at U.S. companies jumped 60% to 66,414 in July from June -- the highest level in 16 months, a report from Challenger, Gray & Christmas showed. The number was also 59% higher than the same period last year.
At the same time, energy markets plunged into the red on a mixed inventory report. Crude oil inventories climbed 950,000 barrels, compared with estimates for a 900,000 barrel build. Meanwhile, gasoline stocks jumped 1.7 million barrels compared with a forecast for a 100,000 barrel increase.
Light, sweet crude fell $2.43, or 2.6%, to $91.36 a barrel. Wholesale RBOB gasoline dipped 10 cents, or 3.2%, to $2.94 a gallon.
Energy stocks such as Valero (VAL: 31.21, -0.48, -1.51%) and Halliburton (HAL: 51.45, -1.21, -2.30%) tumbled following the decline in the energy complex.
All of this is occurring as Wall Street braces for the monthly employment report from the Labor Department that is slated for release on Friday. The economy is expected to have added just 57,000 jobs, preventing the unemployment rate from falling from 9.2% in July. The labor market essentially stalled in June, when the economy added just 18,000 jobs.
The private sector tacked on 114,000 jobs in July, according to payroll firm ADP, better than the 100,000 economists forecast. The report is not always a reliable gauge of the more closely-followed jobs report from the Labor Department, and did little to allay worries over the labor market.
"Expectations for Friday’s report are not likely to be bolstered nor weakened following today’s report," Daniel Greenhaus, chief global strategist at BTIG, wrote in a note. "Job growth in July was frustratingly slow yet again and nothing in today’s report suggests that estimates for Friday deserve any meaningful reconsideration."
Some market participants believe the recent plunge on Wall Street may have gone too far.
“With so much negative sentiment, that tends to be a bullish signal. If I’m already in the market, I would certainly buy some stock here,” said Jason Weisberg, vice president at Seaport Securities. “A lot of the naysayers in the market think it’s the end of the world, but they missed the bottom and the 3,000 point move. They were wrong for the past 2 ½ years.”
Prices at the pump remain stable, yet also elevated, for another day. A gallon of regular costs $3.70 on average nationwide, up from $3.57 last month and $2.72 last year, according to the AAA Fuel Gauge report.
In metals, gold continues climbing after soaring to yet another all-time high on Tuesday amid high volatility on Wall Street. The precious metal recently jumped $29.10, or 1.8%, to $1,674 a troy ounce.
The euro recently jumped 0.93% against the dollar, while the greenback fell 0.54% against a basket of world currencies
Corporate News
MasterCard (MA: 323.55, +25.06, +8.40%) posted quarterly earnings of $4.76 a share, easily topping estimates of $4.23 and sending its stock soaring more than 8% to 52-week highs.
Foreign Markets
The English FTSE 100 fell 2.3% to 5,584, the French CAC 40 dipped 1.9% to 3,455 and the German DAX slid 2.3% to 6,641.
In Asia, the Japanese Nikkei 225 plunged 2.1% to 9,637 and the Chinese Hang Seng slid 1.9% to 21,993
Read more: http://www.foxbusiness.com/markets/2011/08/03/stock-futures-point-higher-following-rout/#ixzz1TzGUEphl
