Sam Collins

Time to Take a Breather

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Similar to Monday and Tuesday, stocks pulled back again yesterday, but this time all three of the major indices were in the red. Economic news seemed to trump earnings as traders were put off by news that durable goods orders for June had their worst drop since January by falling 2.5%. Orders less automobiles rose 1.1%, but that seemed to have little impact on trading despite the fact that this was the first consecutive increase in that category since early in 2008.

Yahoo (YHOO) and Microsoft (MFST) made news before the opening by announcing that Yahoo had agreed to partner for ad sales and search technology with Mr. Softie. But the deal had little impact on the broad market and Yahoo fell 12.08% while MFST rose 1.41%.

The Fed's Beige Book showed that U.S. economic activity is still weak but that the decline is moderating. The New York Fed Bank President Dudley said, "The U.S. is likely to see moderate growth in the second half of 2009, but at a muted pace" (WSJ).

And with that, commodities, as measured by the CBR Commodity Index, fell 2.7% for the worst daily performance of that index in three months. The U.S. dollar had its strongest day in over a month by gaining 0.9% against a basket of major currencies.

At the close, the Dow Jones Industrial Average was off 26 points to 9,071, the S&P 500 fell 4 to 975, and Nasdaq lost 8 points closing at 1,968. The NYSE traded 1.25 billion shares with decliners ahead of advancers by 9-to-5. Nasdaq traded just 629 million shares with decliners there ahead by 8-to-5.