Traders-Blog.com

Volatile trading led by a pullback in technology and commodity-based shares pulled the market down. An uncertain outlook for interest rates and the possibility of slower economic growth dented sentiment. Investors worried that rising interest rates will choke off economic growth and eyed a sell-off in markets around the world.

Today, the Dow Jones industrial average closed down 18.73 or 0.17% to 11,125.33, the broader Standard & Poor’s 500 index closed down 4.96 or 0.39% to 1,262.07, and the Nasdaq composite index closed down 21.02 or 0.96% to 2,172.86.

Market breadth was negative. On the New York Stock Exchange, decliners topped advancers by a margin of two to one on volume of 2.03 billion shares. On the Nasdaq, losers beat winners by two to one as 2.28 billion shares changed hands.

Interest rate uncertainty and attractive treasury bills are steering investors towards bonds. The market appears nervous about slowing economic growth both in the U.S. and abroad due to rising global interest rates. While companies continue to post good numbers, they are also warning of slowdown in the second half. Investors feel that the Federal Reserve’s interest rate hikes will hurt economic growth - and corporate earnings.

The big news was that Euronext that its board favors a merger offer from the NYSE Group Inc. over a rival bid from Deutsche Boerse. The NYSE Group Inc. unveiled a $10.2 billion proposal to buy Euronext, sparking a potential battle with the German bourse for control of the European exchange operator and igniting the possibility of a union of seven exchanges across six countries. However, shares in NYSE Group fell about 2% down $1.48 to $63.02. The battle for Euronext is heating up just as the race to win control of the London Stock Exchange appears close to being settled.

Shares of Yahoo Inc. closed up $0.97 to $30.50 after an article in Barron’s said the lackluster performance of Yahoo’s stock offers a “great opportunity to buy a powerful money spinner.” Barron’s said Yahoo revenue is climbing 30% to 40% a year, while cash flow, by most analyst estimates, is forecast to jump 60% to $2.5 billion.

Wal-Mart Stores Inc. said it’s selling its South Korean unit to local retailer Shinsegae for $882 million. Shinsegae operates 79 E-Mart discount stores in Korea. Wal-Mart’s 16 South Korean stores will continue to operate under the E-Mart name. Wal-Mart’s stock was up 3 cents at $47.35.

Germany’s BASF has raised its all-cash offer for materials-sciences company Engelhard Corp. In another news, a group of private investors said they have succeeded in a $9.7 billion bid for Dutch publishing company VNU. In addition to its Nielsen market research brand, VNU publishes Billboard and Hollywood Reporter magazines.

Crude-oil futures bounced off a nearly seven-week low, and closed for June delivery up $1.07 at $69.60 a barrel.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter