By Ellie Ismailidou and Sara Sjolin, MarketWatch
Urban Outfitters, SunEdison soar; JetBlue, Apple, Shake Shack
tumble
U.S. stocks tumbled Tuesday, retreating after five straight
sessions of gains, as a pullback in oil prices and fresh worries
about China's economic woes weighed on the main indexes.
Some technical resistance after a recent equity rally that has
sent stocks up 10% since mid-February was also behind Tuesday's
selling pressures, analysts said.
The S&P 500 lost 16 points, or 0.8%, to 1,985, led by sharp
losses in the energy and materials sectors. The Dow Jones
Industrial Average fell 113 points, or 0.7%, to 16,960, led by a
2.7% drop in shares of Caterpillar Inc. (CAT)
Meanwhile, the Nasdaq Composite began the day down 31 points, or
0.7%, at 4,677.
Crude-oil prices tumbled Tuesday, after closing Monday at the
highest level of the year
(http://www.marketwatch.com/story/crude-prices-add-to-gains-in-an-increasingly-bullish-market-2016-03-07)
on hopes that major producers will curtail supply and as stronger
economic data boosted expectations of improving demand.
The drop in oil weighed on the shares of energy companies, with
the energy sector leading the losses on the S&P 500, down 2.4%,
while energy names like Exxon Mobil Corp. (XOM) were among the
biggest decliners on the Dow.
The stock market was reaching Tuesday technical resistance after
a recent "very powerful run" over the past couple of weeks fueled
by the strong bounce in oil prices, said Phil Orlando, equity
market strategist at Federated Investors.
"Some consolidation is warranted," Orlando added, placing the
resistance levels at the 2,000-2,030 range for the S&P 500.
Another reason that the market may be facing a correction, is
that bank shares have enjoyed "an oversold bounce" as investors'
fears that the Federal Reserve would join the European Central Bank
and the Bank of Japan in a negative-interest-rate policy abated,
said Tim Anderson, managing director at MND Partners, in emailed
comments.
On Tuesday, the S&P financial sector was down 0.9%, while
financial giant Visa Inc (V) was among the biggest decliners on the
Dow, down 1.3%.
U.S. stocks closed higher on Monday, in part thanks to the jump
in oil prices. The S&P 500 index and Dow average extended their
winning streak to five straight sessions
(http://www.marketwatch.com/story/us-stocks-set-to-take-a-breather-after-three-week-rally-2016-03-07).
China blues: Early pressure on global stocks came after Chinese
trade data showed exports tumbled for an eighth straight month
(http://www.marketwatch.com/story/chinas-exports-tumble-for-8th-month-in-a-row-2016-03-07),
in another sign a slowing global economy is undercutting growth in
the world's second largest economy.
"Will China again be the factor that breaks the bulls? Overnight
the trade data from the world's second-largest economy was truly
awful," said Richard Perry, analyst at Hantec Markets, in a
note.
Data showed exports fell 25.4% in February, compared with the
15% expected, while imports were down 13.8%. Perry noted that
though double-digit declines were expected for both imports and
exports, those drops drive real concerns about the pace of China's
economic slowdown.
"Not only does this reflect badly on the emerging markets that
supply China, but also the state of global demand," he said.
Read: Why 2016's gold rush is already running out of steam
(http://www.marketwatch.com/story/why-2016s-gold-rush-is-already-running-out-of-steam-2016-03-07)
Movers and shakers: Shares of SunEdison Inc. (SUNE) jumped 21%
after Vivint Solar (VSLR) said it has terminated its merger
agreement with SunEdison
(http://www.marketwatch.com/story/vivint-terminates-sunedison-takeover-deal-2016-03-08-7103646)after
mounting financial woes kept the solar-energy company from meeting
obligations of the deal.
Urban Outfitters Inc. (URBN) soared 13% after the company posted
a profit fall that beat forecasts late Monday.
JetBlue Airways Corp. (JBLU) lost 8% after the airliner
projected a first-quarter unit revenue decline
(http://www.marketwatch.com/story/jetblue-gives-downbeat-outlook-as-february-unit-revenue-falls-2016-03-08).
(http://www.marketwatch.com/story/jetblue-gives-downbeat-outlook-as-february-unit-revenue-falls-2016-03-08)Dicks
Sporting Goods Inc. (DKS) pared sharp premarket losses, trading
down 1% after the retailer missed profit expectations for the
fourth quarter
(http://www.marketwatch.com/story/dicks-sporting-goods-shares-take-a-hit-after-missing-profit-expectations-2016-03-08).
Shares of Seadrill Ltd. (SDRL.OS) plunged 16%, falling after a
recent rally. The offshore driller surged 121% in U.S. trade on
Friday after what analysts called a major short squeeze
(http://www.investopedia.com/terms/s/shortsqueeze.asp).
The Norwegian company's chief executive told Reuters
(http://uk.reuters.com/article/seadrill-refinancing-idUKL5N16F1EQ)
he expects refinancing from banks to come through during the second
quarter, and said that short sellers are "beginning to panic" at
the prospect.
Shares of Apple Inc. (AAPL) were down 1% , after the Supreme
Court declined Apple's request for a review of an e-books
(http://www.marketwatch.com/story/supreme-court-turns-away-apple-appeal-in-e-books-antitrust-case-2016-03-07)
antitrust case, leaving the iPad maker facing a payment of $400
million to e-book consumers.
Shares of Shake Shack Inc. (SHAK) dived 10.2% after the burger
chain late Monday posted a lackluster sales forecast
(http://www.marketwatch.com/story/shake-shack-posts-lackluster-sales-forecast-2016-03-07).
Data: The day's only major economic release is already out. The
NFIB small business index for February fell 1 point
(http://www.nfib.com/surveys/small-business-economic-trends/) to
92.9, with none of the 10 components posting a gain.
"Overall, a 'ho hum' outcome, confirming that the small business
sector is not headed up with any strength, just treading water
waiting for a good reason to invest in the future," the NFIB said
in the release.
There are no Federal Reserve speakers on tap, as the central
bank is in its so-called blackout period ahead of next week's
policy-setting meeting.
Other markets: Asian markets ended mixed after the lackluster
Chinese trade data, although the Shanghai Composite Index eked out
a gain to close higher for a sixth straight session
(http://www.marketwatch.com/story/china-stocks-plunge-dragging-down-asian-markets-2016-03-07).
European stock markets were lower
(http://www.marketwatch.com/story/european-stocks-fall-after-surprise-plunge-in-chinese-exports-2016-03-08)
almost across the board, with commodity firms bearing the brunt of
the selloff.
Metals traded mixed, while the dollar weakened
(http://www.marketwatch.com/story/dollar-hits-one-week-low-against-yen-as-nikkei-weakens-2016-03-08)as
the China trade data renewed worries about global growth.
(END) Dow Jones Newswires
March 08, 2016 10:21 ET (15:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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