18 Mar 2012 AMC

18 Mar 2013

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Stock Market Update 16:15 ET Dow -62.05 at 14452.06, Nasdaq -11.48 at 3237.59, S&P -8.60 at 1552.1 :[BRIEFING.COM] The major averages settled firmly lower with the S&P 500 down 0.6%. Equities began the session amid broad losses after the conditions of a Cypriot bailout put the package in jeopardy of being voted down in the country's parliament. Per the original agreement, Eurozone rescue funds would provide Cyprus with EUR10 billion in recapitalization with a ‘stability levy' imposed on all bank accounts expected to raise an additional EUR5.8 billion. The deposit tax is the main cause for the delay as residents push back against the measure. In addition, global investors viewed this is as a possible precursor to a similar tax being levied on bank accounts elsewhere, should other troubled sovereigns ask for help. The developments weighed on European markets where peripheral indices trailed behind their core counterparts. In addition, a modest safety bid sent the German 10-yr yield lower by five basis points to 1.41%. After opening sharply lower, U.S. equities climbed steadily into the afternoon. However, stocks slipped off their best levels of the day when reports indicated the parliamentary vote scheduled for tomorrow has been postponed indefinitely. The financial sector bore the brunt of today's selling as bank stocks tend to show increased sensitivity in the face of political or economic uncertainty. Morgan Stanley(MS 22.99, -0.60) was the weakest performer among the majors, and the SPDR Financial Select Sector ETF (XLF 18.27, -0.18) lost 1.0%. Notably, European financials saw wider losses than their U.S. counterparts. Barclays(BCS 18.44, -0.79) and Deutsche Bank (DB 43.02, -1.61) settled lower by 4.1% and 3.6%, respectively. In addition to financials, other cyclical sectors trailed behind the broader market. However, the technology space was an exception. The growth-oriented sector finished among session leaders with Apple (AAPL 455.72, +12.06) contributing to the relative strength. The largest tech stock advanced 2.7% amid continued speculation the company may hike its quarterly dividend in the near future. Although a handful of large cap components registered gains, chipmakers ended broadly lower. The PHLX Semiconductor Index, which tracks 30 microchip manufacturers, settled lower by 1.3%. On the upside, the defensively-oriented telecom space spent the bulk of the day in positive territory. Verizon Communications (VZ 48.75, +0.73) added 1.5% after Citigroup upgraded shares of Verizon to ‘Buy' from ‘Neutral.' The CBOE Volatility Index(VIX 13.60, +2.30) spiked over 20.0%. The near-term volatility measure has returned to levels last seen at the beginning of the month after sliding to multi-year lows in recent days. Interestingly, trading volume finished below average as just over 675 million shares changed hands on the floor of the New York Stock Exchange. In the metals market, gold futures climbed 0.7% to $1603.90 while silver ended little changed at $28.86. Also of note, copper fell 3.0% to its lowest level since November of last year. The weakness was a result of a technical breakdown combined with fears of tighter policy in China after February home sales rose at their fastest pace since December 2011. Today's economic data was limited to the March NAHB Housing Market Index, which registered a reading of 44. This was lower from the prior month's reading of 46, and also short of the Briefing.com consensus which called for a reading of 48. Tomorrow's economic news will focus on housing with February housing starts and building permits scheduled to be reported at 8:30 ET. ..NYSE Adv/Dec 1170/1868. ..NASDAQ Adv/Dec 865/1617.

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Jason's Commentaries

Stupid Cyprus causing this knee jerk reaction... To have such a small country having to tax their depositors, which might lead to bank run, causing this irrational knee jerk reaction which caused a 100 over points drop at the start of the market. Market subsequently recovered most of the losses, and closed at a 62 points loss. However, Nasdaq Composite managed to close with a gain. VIX spiked to a 13% gain. VIX initial dropped at the headstart but spike up towards the end of the trading session. Financials were the biggest loser of most sectors, being affected by Cyprus. Speculations that Cyprus banks' fear of bank run might spill over to US banks caused this unexpected loss. Volumes were not impressive, having a 670 million shares traded. Bears mostly ruled the first trading session of the week. However, on the technical note, the Dow found a support on the 14450 level, and I'm expecting the market to be up today. The widely feared bank run on Cyprus did not happen, and I believe that the market will likely to resume its bullish momentum. 

Market Call: UP

Date: 19 Mar 2013