U.S. Stocks Erase Opening Gains In Volatile Market
NEW YORK (MarketWatch) -- U.S. stocks shifted their stance again in early Friday trading, rapidly shedding opening gains in another display of market volatility after the prior day's sell-off.
"There's a tug of war between folks that believe that we're at or near a bottom, and want to start to look through the first half to the second half, and price in earnings. Then there's a second group that doesn't believe in the 'E' in P-and-E levels, and believes every rally should be sold," said Art Hogan, chief market strategist at Jefferies & Co.
After posting gains at the start, the Dow Jones Industrial Average fell 55.52 points to 12,228.78, with 21 of its 30 components trading lower.
"The reason behind all of this volatility is because the market is unsure of the longer-term direction of the U.S. economy," said Robert Pavlik, chief investment officer of Oaktree Asset Management.
The S&P 500 fell 7.33 points to 1,335.2, while the technology-laden Nasdaq Composite declined 16.79 points to 2,282.99.
The tech sector's slid was led by Intuit Inc. , which tumbled 10.6% after reporting a drop in quarterly profit. .
Financial shares were among the sectors falling, led by Fannie Mae and Freddie Mac , both of which turned sharply lower, with Fannie Mac down 6.7% and Freddie Mac off 4.1%, after downgrades from neutral to sell by Merrill Lynch analysts. .
In early commodities trade on the New York Mercantile Exchange, crude oil prices also turned heels on an earlier rise, with the April-dated light crude price falling 35 cents to $97.88 a barrel. .
Early trading volume on the New York Stock Exchange topped 345 million, and declining stocks outran advancing issues more than 2 to 1, while 257 million shares exchanged hands on the Nasdaq, and decliners topped advancers, also more than 2 to 1.
On Thursday, the major U.S. stock indexes fell more than 1% after data highlighting the slowing economy sank early optimism on the technology sector.
Overseas, European equities looked set to end with gains, as higher food and bank stocks offset weakness from Germany's second-largest utility, RWE, and auto makers. .
By Kate Gibson