Stocks fell by sharp margins to open the Labor Day-shortened week on Tuesday, as profit taking following last week's gains drove the major averages down off of their best closing levels in three weeks. Nonetheless, the pullback came on low volume, with many traders staying away from their desks following the three-day weekend.
The major averages saw some late-day volatility, ending near their session lows. The Dow fell by 107.24 points or 1 percent to end at 10,340.69, the Nasdaq declined by 24.86 points or 1.1 percent to 2,208.89 and the S&P 500 lost 12.67 points or 1.1 percent to close at 1,091.84.
With no first-tier economic data on the day, corporate news largely grabbed market headlines.
Coca-Cola Enterprises, Inc. (CCE) moved moderately higher on the day after the largest bottler of Coca-Cola (KO) beverages raised its full year earnings outlook to a range of $1.78 to $1.82 per share. Earlier, the company had estimated earnings in the range of $1.73 to $1.77 per share.
Meanwhile, Idenix Pharmaceuticals, Inc. (IDIX) fell sharply after saying it received a verbal notice from the FDA placing a clinical hold on the company's IDX184 and IDX320 programs in hepatitis C virus-infected patients.
The markets also digested some key management shifts at a number of major firms.
Beckman Coulter, Inc. (BEC) announced that its chairman, president and CEO Scott Garrett has resigned, while Robert Hurley was named the company's interim President and CEO.
Oracle Corp. (ORCL) also revealed that former Hewlett-Packard (HPQ) CEO Mark Hurd has been appointed as its co-president. However, HP has subsequently filed a lawsuit against Hurd based on conflict of interest.
Additionally, Barclays Plc (BCS) named Robert Diamond as its CEO, effective next year. Diamond will succeed John Varley, who intends to step down as CEO and from the Barclays Boards and the Group Executive Committee on March 31, 2011.
Sector News
Financials were among the day's worst performers amid concerns about capital levels in European banks. The Kbw Bank Index fell by 3.2 percent, pulling back off of the three-week closing high set last Friday.
Oil, Housing, semiconductor and airline stocks also showed notable moves to the downside, with the losses by oil stocks coming as the price of oil futures declined by $0.51 at $74.09 a barrel.
The price of oil fell as low as $72.63 a barrel but regarding some ground following reports of an explosion in a Mexican oil refinery, which raised concerns about supply.
Commercial real estate stocks also came under pressure, with the Morgan Stanley REIT Index falling by 1.7 percent. The decline pulled the index down off of the four-month closing high set last Friday.
Natural gas, biotechnology and defense stocks also sank by significant margins on the day, while gold stocks saw moderate strength, pushing the NYSE Arca Gold Bugs Index up by 0.7 percent.
Gold stocks advanced as the price of gold gained $8.20 to close at an all-time high of $1,259.30 an ounce, edging past its previous settlement high of $1,258.30 an ounce set in June.
Dow Components
American Express (AXP) and JP Morgan Chase (JPM) were two of the heaviest percentage losers in the Dow, falling by 4.1 percent and 2.3 percent, respectively, offsetting a portion of last week's rally.
Bank of America (BAC) fell by 2.2 percent, pulling back off of Friday's three-week closing high and provided further evidence of the day's weakness among financial stocks.
Disney (DIS), Cisco (CSCO) and Boeing (BA) also closed sharply lower, while McDonald's (MCD) saw a solid outing, advancing by 1 percent to close at another historic high.
Other Markets
Overseas, stock markets in the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's benchmark Nikkei 225 Index fell by 0.8 percent, while Hong Kong's Hang Seng Index moved up by 0.2 percent.
Meanwhile, the major European markets all ended down by varied margins. The French CAC 40 Index slid by 1.1 percent, while the German DAX Index and the U.K.'s FTSE 100 Index both lost 0.6 percent.
In the bond markets, treasuries ended notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed at 2.609 percent, posting a loss of 9.7 basis points.
Looking Ahead
Wednesday, the markets will likely look to the Federal Reserve's Beige Book report and data on consumer credit.
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