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Stocks had dropped 3% in the prior session, but they attempted a modest rebound this time around. The financial sector initially showed leadership as bank stocks were boosted by news that the financial reform bill's language regarding some $19 billion in new fees and taxes was removed. Meanwhile, banks in Europe conveyed that recent liquidity concerns in the continent may be a bit overdone, given that a recent short-term debt issuance from European Central Bank was rather lightly subscribed. The financial sector was up more than 1% in the early going, but that would inevitably reverse into a 1.1% loss.
Prior to a late downturn, the mood among market participants appeared to have improved since the prior session's selloff. Still, the improvement was restrained by a disappointing ADP Employment Change Report, which showed that private payrolls for June increased by a paltry 13,000 when an increase of 61,000 had been widely expected. That portends a dour monthly jobs report from the government at the end of the week.
Restrained gains eventually gave way to another barrage of selling. In turn, all 10 major sectors settled in the red.
There wasn't any real catalyst to account for the slide. Though it followed the afternoon headline that Moody's has placed Spain's debt on review for possible downgrade, the announcement was no surprise since both Fitch and S&P had already downgraded Spain.
Corporate news had little affect on overall trade, though there were a few merger and acquisition items. Specifically, Abraxis Bioscience (ABII 74.20, +12.89) will be acquired by Celgene (CELG 50.82, -2.42) for $71.93 per share and privately held TargeGen will be acquired by Sanofi-Aventis (SNY 30.06, +0.31).
In earnings news, Monsanto (MON 46.22, -1.12) beat the consensus earnings estimate for the latest quarter, but it reaffirmed an outlook that had previously disappointed investors. General Mills (GIS 35.52, -1.38) also offered disappointing guidance, which overshadowed in-line earnings.
Trading volume had been rather underwhelming until the stock market's late slide induced a surge in participation so that share volume on the NYSE surpassed 1.4 billion shares. Volume is expected to climb tomorrow as money managers make end-of-month and end-of-quarter portfolio rebalances.
Read more: http://www.nasdaq.com/aspx/market-summary.aspx#ixzz0sNKNSGfW