US stocks fell for a fifth day in a row yesterday, having lost more than five per cent over that period as borrowing costs in Spain hit another record high.
The market remains anchored by concerns about the worsening debt crisis in Europe where rising yields suggest the outlook continues to deteriorate and stocks have been tied to European credit market volatility.
News that the International Monetary Fund would make short-term credit available for struggling Eurozone countries gave stocks a temporary boost, but the gains quickly evaporated.
Spain’s short-term borrowing costs hit a 14-year high yesterday as political uncertainty about a solution to the Eurozone’s sovereign debt crisis punished another vulnerable southern European country.
The S&P managed to hold near 1,187, seen as the next technical support, representing the 61.8 per cent retracement of the 2011 high to low. The index fell below the 1200 mark last week.
Joseph Cusick, senior market analyst at OptionsXpress Holdings in Chicago, said the stock market is currently battered and is reaching a technically oversold level.
The Dow Jones industrial average was down 53.59 points, or 0.46 per cent, at 11,493.72. The Standard & Poor’s 500 Index was down 4.94 points, or 0.41 per cent, at 1,188.04. The Nasdaq Composite Index was down 1.86 points, or 0.07 per cent, at 2,521.28.
Before Wall Street’s opening bell, data showed the US economy grew at a two per cent annual rate in the third quarter.
While down from the government’s prior estimate of 2.5 per cent one month ago, reduced inventories and solid consumer spending could result in better-than-expected growth in the fourth quarter.
The market showed a muted reaction to minutes from the Federal Reserve’s recent policy meeting in which some officials said they were prepared to do more to support the domestic economy. But the committee decided to hold off taking action amid an uncertain outlook.
In total, about 6.99bn shares exchanged hands on the New York Stock Exchange, NYSE Amex and Nasdaq, below the current daily average of 8bn shares.
On the NYSE, decliners beat advancers by 18 to 11, while on the Nasdaq, about two stocks fell for every one that rose.