Wall Street opened higher today but lost gains to turn negative after computermaker Dell (DELL) disappointed with a weaker sales outlook, raising concerns that consumer spending may be dipping in the near future. The company has been praised for moving away from lower margin areas like consumer products and into more profitable segments of the business like enterprise customers and businesses. Market watchers attribute the sell-offs in the current equities landscape to investors’ shrinking appetite for risk, cutting position sizes to allocate to more staple sectors and assets. While technology stocks were hit hard from the Dell news, consumer retailers are continuing to impress with Target (TGT) and Staples (SPLS) being the latest companies in the sector to report strong earnings and promising forecasts. The IPO market, which seemed to be going gangbusters just a week ago, seems to have dried up almost instantaneously with China’s video site Todou Holdings (TUDO) being the only new debut this week. The company raised $174 million, offering shares at $29 per but have traded down nearly 19 percent at one point. Oil prices have moved higher by as much as 2.5 percent and is currently hovering around $88 a barrel. Gold is making a push for $1,800 again, but has since backed off as investors move back and forth between inflation hedge and precious metal bubble.
Major U.S. Stock Indices
DJIA: 11,372.56 (-0.29 percent)
S&P 500: 1,190.70 (-0.17 percent)
NASDAQ: 2,503.40 (-0.79 percent)
Russell 2000: 702.69 (-0.29 percent)
In other news:
- Despite what Standard and Poor’s says, investors are still piling into Treasurys as capital preservation becomes more important than capital appreciation. [Marketwatch]
- After months of debate and frustration over spending cuts between the White House and Congress, its looks like Americans will now get to see debate and frustration over spending stimulus packages between the White House and Congress. [Bloomberg]
- President Barack Obama may be vulnerable in the 2012 re-election, but is there a viable Republican candidate that can beat him? [Economist]
- When alcohol turns hostile: SABMiller (SBMRY) is turning to shareholders of Foster Group (FGL.ASX) for help in its $10-billion takeover bid of the Australian beer maker. [WSJ]
- Small cap stocks may be the big winners once again when the market finally rebounds. [CNBC]
