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US Market Commentary

Stocks Post Moderate Losses Amid Slew Of Market Concerns - U.S. Commentary
3/19/2010 4:52 PM ET

TOP MARKET NEWS

Stocks Post Moderate Losses Amid Slew Of Market Concerns - U.S. Commentary

AARP, AMA Call For Passage Of Health Care Reform Bill

Stocks Stuck In Negative Territory In Mid-Afternoon Trading - U.S. Commentary

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(RTTNews) - Stocks closed lower by moderate margins on a quadruple witching Friday, as some profit taking along with overseas inflation and credit concerns prompted a pullback. The major averages all closed in negative territory, moving off of the more than one-year highs reached this week.

With no first-tier economic data today, news from the Reserve Bank of India grabbed market attention, as the institution announced that it is raising its key interest rates by 25 basis points to battle inflation, which reached a sixteen-month high according to data released earlier in the week.

The Indian central bank raised rates to 3.5 percent from a record low of 3.25 percent, the first rate hike since July of 2008.

Back in the U.S., healthcare reform remained a key market focus ahead of the weekend, during which the House of Representatives will take a crucial vote on the legislation.

Late this morning, President Barack Obama held a campaign-style rally hoping to show wavering lawmakers the popularity of the proposal. The deciding vote on healthcare reform is scheduled for Sunday.

Corporate news was also on the radar as a Chinese newspaper reported that Google Inc. (GOOG) decided to cease operations in China beginning in early April. The web giant is expected to make an official announcement on Monday.

Also on the corporate front, uniforms and business services provider Cintas Corp. (CTAS) posted third quarter net income of $0.32 per share, topping Wall Street expectations for $0.30 per share. Revenues for the third quarter totaled $861.8 million, also beating projections.

The major averages moved off their worst levels going into the close but still posted notable losses on the day. The Dow fell by 37.19 points or 0.4 percent to 10,741.98, the Nasdaq slid by 16.87 points or 0.7 percent to 2,374.41 and the S&P 500 slipped by 5.92 points or 0.5 percent to 1,159.90.

Despite the pullback, the major averages all saw gains on the week, with the Dow and the S&P 500 advancing by 1.1 percent and 0.9 percent, respectively, while the Nasdaq edged up by 0.3 percent.

Sector News

Computer hardware stocks moved notably lower in today's session, as reflected by the 3.4 percent loss posted by the NYSE Arca Computer Hardware Index. With the loss, the index pulled back off of the one-month closing high set on Thursday, hurt by sinking shares of Palm Inc. (PALM).

Palm plunged by 29.2 percent after reporting a steeper than forecast third quarter loss and issuing a fourth quarter revenue projection that was well below expectations.

Airline stocks also saw substantial weakness, dragging the NYSE Arca Airline Index down by 3.1 percent. The decline pulled the index further away from the more than two-year high set a week ago.

Selling pressure was also present among gold stocks, with the NYSE Arca Gold Index sliding by 1.7 percent. The move came along with a decline in the price of gold, which fell by $19.90 to $1107.60 an ounce.

Eldorado Gold Corp. (EGO) saw a notable retreat in the gold sector, falling by 4.3 percent to its lowest closing price in three weeks.

While oil service, housing, and semiconductor stocks also posted notable losses, health insurance stocks saw strong gains ahead of this weekend's vote on the healthcare reform bill. The Morgan Stanley Healthcare Payor Index rose by 2.2 percent, setting a two-month closing high.

Dow Components

3M (MMM) turned in one of the Dow's worst performances, falling by 2 percent. The decline pulled the stock down off of yesterday's nearly two-month closing high.

Pfizer (PFE) also came under pressure today, falling by 1.9 percent. Shares of the drug maker ended the day at a four and a half month closing low.

American Express (AXP), Bank of America (BAC) and Merck (MRK) also declined in today's session, while Coca-Cola (KO) moved to the upside, rising by 1.5 percent. The stock remained in a range despite today's strong gain.

United Technologies (UTX) and AT&T (T) also rose, posting gains of 1 percent and 0.6 percent, respectively. United Technologies closed at its best price in just under two years, while AT&T finished the day at its highest closing level in over two months.

Other Markets

Overseas, stock markets across the Asia-Pacific region closed higher on Friday. Japan's benchmark Nikkei 225 Index closed up by 0.8 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

Meanwhile, the major European markets finished the day on opposite sides of the unchanged line. While the U.K.'s FTSE 100 Index gained 0.1 percent, the French CAC 40 Index and the German DAX Index fell by 0.3 percent and 0.5 percent, respectively.

In the bond markets, treasuries closed modestly lower. Subsequently, the yield on the benchmark ten-year note closed at 3.687 percent, posting a gain of 1.5 basis points on the day.

Looking Ahead

Next week, data on new and existing home sales, durable goods orders and consumer sentiment may help to guide trading, along with the final reading on fourth quarter GDP.

For comments and feedback: contact editorial@rttnews.com

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