2008.09.02 Briefing\'s Market Wrap-up 今天忽上忽下的，到底怎么回事儿？

Tuesday was a disappointing session for stock market bulls. Stocks ran out of steam, giving up strong opening gains to finish the day with a loss.

Shortly after the opening bell, the Dow, Nasdaq and S&P 500 rallied 2.1%, 1.9% and 1.6%, respectively, benefiting from a sharp sell-off in commodities and a relief trade after Hurricane Gustav did not cause any major structural damage. But stocks steadily declined throughout the afternoon, with the Dow, Nasdaq and S&P 500 finishing the day with a loss of 0.2%, 0.8% and 0.4%, respectively.

There was no apparent catalyst for the change in sentiment, although the retreat may have been compounded after traders were disappointed that stocks were unable to maintain their opening gains. (and tightly set stop losses were taken out one after another in mass? :-)

With regard to commodities, the CRB Index fell 3.4% after the damage caused by Hurricane Gustav was less than expected. Crude prices were down 8.7% in overnight trading, but recovered some losses to finish with a decline of 4.5% at $110.30 per barrel. (Crude standing with a close above 110，that's a good sign for both bears & bulls...)

The drop in commodity prices sparked selling interest within commodity producing stocks. The energy sector declined 4.6% and the materials sector fell 2.5%, acting as a major drag on the broader market.

Conversely, commodity-cost sensitive stocks got a boost, although they gave up much of their intraday advance by the end of the session, and were unable to offset the steep declines in the energy and materials sectors. The consumer discretionary sector rose 1.8%, with retailers climbing 3.0%. Airlines advanced 6.6% and automakers gained 3.1%.

The financial sector outperformed with a 1.8% gain. Bank of America (BAC 32.62, +1.48) provided leadership after Goldman Sachs assumed coverage of BofA with a Buy, citing earnings growth potential, according to the AP. Lehman Brothers (LEH 16.06, -0.03) gave up an early gain to finish near the unchanged mark, despite reports that Korea Development Bank confirmed that it is in talks to invest in Lehman Brothers.

In other corporate news, Merck (MRK 34.83, -0.84) and Schering-Plough (SGP 19.08, -0.32) came under selling pressure due to uncertainty regarding cancer risks of the cholesterol drug Vytorin. The healthcare sector still managed to gain 0.1%.

In economic news, the August ISM Index, a national manufacturing survey, indicated a very slight contraction in the manufacturing sector, although it is still indicative of growth in the overall economy. Specifically, the index slipped 0.1 to 49.9, which was nearly in-line with the expected reading of 50.0. A reading below 50 reflects contraction in manufacturing. On a positive note, the prices paid index declined to 77.0 from 88.5, suggesting an easing in inflationary pressures.

Separately, July construction spending showed a continued poor trend. Housing remains the weakest area in the economy, although Briefing.com expects a leveling off in the months ahead. Specifically, construction spending fell a larger-than-expected 0.6%, versus the expected 0.4% decline. However, the current level of spending is actually above estimates after the June change was revised sharply higher to +0.3% from -0.4%.

DJ30 -26.63 NASDAQ -18.28 NQ100 -1.2% R2K -0.1% SP400 -1.0% SP500 -5.25

NAZ Adv/Vol/Dec 1367/1.95 bln/1510
NYSE Adv/Vol/Dec 1521/967 mln/1450 (A/D = 1.05, not bad! The vol looks thin, though)