DOW Closes below 10,000: Monday, February 8, 2010
Stocks took a turn for the worse today, showing very little of the bullish resilience that characterized Friday’s afternoon rebound. In keeping with the recent trend, it was another dose of uncertainty that helped send stocks reeling. Traders are still considering the possible ramifications of near-crippling sovereign debt loads across the euro zone — and now, the market is facing up to the fact that the U.S. central bank must begin to slowly unravel its wide-reaching stimulus efforts. A Wall Street Journal article on Sunday suggested that Federal Reserve Chairman Ben Bernanke “will begin this week to lay out a blueprint for a credit tightening,” bringing anxiety on the topic to a boiling point today. Although no unwinding efforts will begin for “at least several months,” the sheer uncertainty regarding the Fed’s plans was sufficient to send bulls scrambling for shelter, leaving stocks to start the week on a decidedly downbeat note.
In fact, the Dow Jones Industrial Average (DJIA – 9,908.39) notched its first daily close below 10,000 since Nov. 4, 2009. The blue-chip barometer settled on a loss of nearly 104 points, or 1%, as selling pressure accelerated into the close. Support from the Dow’s 160-day moving average is lingering in the 9,800 level, and could help to stem any further weakness.
The S&P 500 Index (SPX – 1,056.74) also succumbed to overwhelmingly negative momentum, closing with a loss of 9.5 points, or 0.9%. However, the SPX found support near the 1,050 region on an intraday basis. Finally, the Nasdaq Composite (COMP – 2,126.05) ended on a deficit of 15.1 points, or 0.7%, after briefly surging into positive territory around midday. The COMP’s rally attempt was capped by its 120-day moving average, in the 2,152 area.
