16:20 ET
Dow
-34.29
at 1223.34,
Nasdaq -11.94
at 2404.21,
S&P -3.65
at 1403.17
[BRIEFING.COM] Even though the indices closed well off
their lowest levels of the day, they still finished in negative
territory and kicked off the month of March on a sour note.
Renewed concerns about the ripple effect of an unwinding of the
yen-carry trade weighed most heavily on a market that is now overly
pessimistic. Such worries were exacerbated in pre-market trading after
Japan's top financial diplomat warned that those carry trades shouldn't
be considered "one-way." That pushed the yen up more than 1% to an
11-week high against the dollar, reminiscent of the 2% yen rally on
Tuesday that accelerated stock declines across the globe as speculators
dumped equities to pay off their yen loans.
In similar fashion to yesterday's action, the idea that the worst
may be over subsequently prompted some sellers to cover their short
positions. At their opening lows, the Dow, S&P 500 and Nasdaq were
down as much as 1.7%, 1.8%, and 2.3%, respectively, but intraday
recovery efforts had all three in positive territory temporarily.
A failed rally from session lows positioned bonds yet again as the
best place to seek refuge until the dust settles. In fact, recognition
that Wednesday's recovery effort wasn't all that convincing, when
measured against such a meltdown like the one seen Tuesday, created an
added sense of uneasiness.
Yesterday, the Dow snapped a five-day losing streak; but its
52-point advance paled in comparison to the 416-point drubbing it
endured a day earlier. The S&P 500 was the best performer among the
majors Wednesday, but its modest 0.6% advance after tumbling 3.5%
Tuesday also offered very little assurance that a bottom was forming.
As a result, the market was vulnerable Thursday to follow-through
selling before the market even opened. Add to that some mixed economic
data and a recently overly optimistic market now focused on everything
negative struggled to fully embrace a surprisingly strong manufacturing
report.
At 10:00 ET, the February ISM survey rose to 52.3 from 49.3 in
January. That eased the recession fears that have been unnecessarily
building and put a bid in the market that helped to more than halve the
market's early losses. However, a 0.3% increase in the Fed's favored
inflation gauge -- the core-PCE -- was above expectations and left the
year/year increase at 2.3%. Since that was above the Fed's comfort zone
of 1% to 2%, and the market needs good numbers right now, the data did
not lend much support to improving price stability.