Stocks end lower as recent rally fizzles, S&P snaps 7-day win streak
By: JeeYeon Park | CNBC.com Stock Market Writer
Stocks closed near their lows Thursday
after crawling along the flatline for most of the session in lackluster
trading, as investors paused after the recent market run-up and ahead of
the Federal Reserve's policy-setting meeting.
The S&P 500 broke its seven-day rally.
The S&P 500 broke its seven-day rally.
| Name | Price | Change | %Change | ||
|---|---|---|---|---|---|
| DJIA | Dow Jones Industrial Average | 15300.64 | -25.96 | -0.17% | |
| S&P 500 | S&P 500 Index | 1683.44 | -5.69 | -0.34% | |
| NASDAQ | Nasdaq Composite Index | 3715.97 | -9.04 | -0.24% |
The Dow Jones Industrial Average ended lower, dragged by JPMorgan and DuPont.
Still, the blue-chip index is within nearly 2 percent of its record
close on Aug. 2 and on track for its second biggest weekly gain of the
year.
The S&P 500 and the Nasdaq also closed lower. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, popped above 14.
Most key S&P sectors closed in the red, pressured by materials and financials, while telecoms finished higher.
(Read more: Watch Art Cashin: 'We're heavily overbought')
The S&P 500 and the Nasdaq also closed lower. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, popped above 14.
Most key S&P sectors closed in the red, pressured by materials and financials, while telecoms finished higher.
(Read more: Watch Art Cashin: 'We're heavily overbought')
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"There's not a lot of news out to drive
the markets higher or lower—we have the Fed meeting next week and have
seen a big run up in the last few days so it's not surprising to see a
bit of a pause here," said Joe Bell, senior equities analyst with
Schaeffer's Investment Research.
"We've had a surprise September rally because people were talking about September historically being a weak month for stocks," noted Bell. "And as we approach all-time highs, [those levels] could act as a natural selling pressure, but we think the bigger picture is that by year end, we'll break above those highs amid lowered expectations on the market."
(Read more: There's no stopping September, at least not yet)
Equities have staged an impressive rally so far in September, with all three major averages up more than 3 percent across the board.
Meanwhile worries over Syria lingered as U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held open talks on disarming Syria's chemical weapons programs, but differences emerged at the outset of the expected two-day negotiations.
Investors will also be looking ahead to the Federal Open Market Committee's policy-setting meeting next week, amid expectations that this will be the month when the central bank announces a tapering of its $85-billion-a-month bond-buying program.
"It's hard to predict what's going to happen—whether it happens in September or later, the market's already pricing in some sort of tapering," said Bell, pointing to the recent moves in the bond yields.
In Asia, China's benchmark stock index hit a three-month high following a speech by Premier Li Keqiang on Wednesday. Speaking at the World Economic Forum in Dalian, Keqiang said the government will push on with economic and financial reforms as it targets steady growth.
"We've had a surprise September rally because people were talking about September historically being a weak month for stocks," noted Bell. "And as we approach all-time highs, [those levels] could act as a natural selling pressure, but we think the bigger picture is that by year end, we'll break above those highs amid lowered expectations on the market."
(Read more: There's no stopping September, at least not yet)
Equities have staged an impressive rally so far in September, with all three major averages up more than 3 percent across the board.
Meanwhile worries over Syria lingered as U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held open talks on disarming Syria's chemical weapons programs, but differences emerged at the outset of the expected two-day negotiations.
Investors will also be looking ahead to the Federal Open Market Committee's policy-setting meeting next week, amid expectations that this will be the month when the central bank announces a tapering of its $85-billion-a-month bond-buying program.
"It's hard to predict what's going to happen—whether it happens in September or later, the market's already pricing in some sort of tapering," said Bell, pointing to the recent moves in the bond yields.
In Asia, China's benchmark stock index hit a three-month high following a speech by Premier Li Keqiang on Wednesday. Speaking at the World Economic Forum in Dalian, Keqiang said the government will push on with economic and financial reforms as it targets steady growth.
Rate hikes ahead?
CNBC executive news editor
Patti Domm sits down with Kate Moore of JPMorgan Private Bank to discuss
the Fed and rising interest rates.
Disney
zipped higher to lead the Dow gainers after the media conglomerate's
CFO Jay Rasulo said the company will buyback $6 billion to $8 billion
shares.
Dell said a preliminary vote shows that shareholders have approved a $24.8 billion offer from its founder to buy the company and take it private.
Meanwhile, Pandora surged after the Internet radio company named former Microsoft executive Brian McAndrews as its new chief executive officer, replacing Joe Kennedy.
Among earnings, Lululemon Athletica beat estimates on both the top and bottom lines for its most recent quarter, but slumped after the yogawear retailer cut its full-year forecast. The retailer has struggled this year amid a recall of its Luon line of yoga pants over complaints that they were too sheer. And in June, the company announced that its CEO would leave after a replacement was found.
Kroger edged higher after the grocery-store chain posted quarterly results that matched expectations and lifted the lower end of its same-store sales guidance.
(Read more: This is the world's most expensive asset class)
Royal Caribbean rallied after the cruise line operator more than doubled its quarterly dividend to 25 cents per share from 12 cents a share. It also named former Ernst & Young CEO William Kimsey as its first lead director.
On the economic front, weekly jobless claims fell 31,000 to a seasonally adjusted 292,000, but the data was clouded by a processing glitch. A department analyst said the majority of the decline appeared to be because two states did not process all the claims they received during the week.
Meanwhile, export prices declined 0.5 percent in August, falling for the sixth-straight month. Economists polled by Reuters had expected export prices to rise 0.1 percent last month.
Treasury prices rose after the government sold $13 billion in 30-year bonds at a high yield of 3.820 percent. The bid-to-cover ratio, an indicator of demand, was 2.40 versus a recent average of 2.51.
Dell said a preliminary vote shows that shareholders have approved a $24.8 billion offer from its founder to buy the company and take it private.
Meanwhile, Pandora surged after the Internet radio company named former Microsoft executive Brian McAndrews as its new chief executive officer, replacing Joe Kennedy.
Among earnings, Lululemon Athletica beat estimates on both the top and bottom lines for its most recent quarter, but slumped after the yogawear retailer cut its full-year forecast. The retailer has struggled this year amid a recall of its Luon line of yoga pants over complaints that they were too sheer. And in June, the company announced that its CEO would leave after a replacement was found.
Kroger edged higher after the grocery-store chain posted quarterly results that matched expectations and lifted the lower end of its same-store sales guidance.
(Read more: This is the world's most expensive asset class)
Royal Caribbean rallied after the cruise line operator more than doubled its quarterly dividend to 25 cents per share from 12 cents a share. It also named former Ernst & Young CEO William Kimsey as its first lead director.
On the economic front, weekly jobless claims fell 31,000 to a seasonally adjusted 292,000, but the data was clouded by a processing glitch. A department analyst said the majority of the decline appeared to be because two states did not process all the claims they received during the week.
Meanwhile, export prices declined 0.5 percent in August, falling for the sixth-straight month. Economists polled by Reuters had expected export prices to rise 0.1 percent last month.
Treasury prices rose after the government sold $13 billion in 30-year bonds at a high yield of 3.820 percent. The bid-to-cover ratio, an indicator of demand, was 2.40 versus a recent average of 2.51.
@JeeYeonParkCNBC) On Tap This Week:
FRIDAY: PPI, retail sales, consumer sentiment, business inventories, Wal-Mart holiday layaway begins
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