Aftershock upsets Wall Street trading

US STOCKS fell yesterday after a major aftershock hit Japan, which caused injuries and renewed concerns about industrial supply disruptions and nuclear power.

Investors sought protection against further market declines, which sent the CBOE Volatility Index VIX up 2.2 per cent to 17.27. VIX futures also rose as investors bet the index could rise above 20 by May.

The earthquake, measured at magnitude 7.4, caused no tsunami or detectable damage at the Fukushima Daiichi nuclear plant, but investors remained cautious after Japan’s 9.0 deadly earthquake and tsunami last month.

“It got people thinking that maybe this is not finished yet, and this is of a bigger scale than what we had expected,” said Jack DeGan, chief investment officer at Harbor Advisory.

The Dow Jones industrial average was down 61.91 points, or 0.50 per cent, at 12,364.84. The Standard & Poor’s 500 Index was down 5.35 points, or 0.40 per cent, at 1,330.19. The Nasdaq Composite Index was down 5.97 points, or 0.21 per cent, at 2,793.85.

Stocks had been mostly flat prior to the news of the quake, with the S&P 500 encountering strong technical resistance that stymied gains after a larger-than-expected drop in weekly jobless claims and March retail sales that topped expectations.

“The consumer seems to be hanging in there despite higher gas prices,” said Donald Selkin, chief market strategist at National Securities.

Among retailers, Costco Wholesale beat expectations, and its shares gained 3.4 per cent to $77.57. Macy’s rose 0.3 per cent to $25.26 while Target fell two per cent to $49.93.

Bed Bath and Beyond surged 10.1 per cent to $54.37 a day after it forecast full-year earnings growth that would beat Wall Street expectations.

US-listed shares of Japanese stocks fell, but some analysts said they might buy on the weakens.

“I’m looking at auto manufacturers, and I’m definitely looking to buy Honda if it gets cheap enough,” said Tim Hartzell, chief investment officer at Sequent Asset Management. New York-traded shares of Honda Motor rose 0.2 per cent on volume that neared its 50-day average.