Perhaps this is influencing the broad sell-off in the broader markets today. My gut tells me this is more a factor of the end of Q2, but this news is highly significant. If it leads to additional stock market contraction over the next few days and even weeks, this sentiment dip may be more than a one-month dip, and could evolve into self-fulfilling prophecy. We've taken out the Monday lows. There may also be some technical factors evolving, as a failure to reach a new top could lead to broader stock market selling in the days ahead. Today's sudden reversal sure looks like a bearish signal!
from Optionetics:
In other economic news, consumer confidence slipped in June to 49.3 from 54.8 in May. Within the report, those saying jobs are hard to get increased and the present situation index fell to 24.8 from 29.7. This is disappointing news for those supporting the view that the economy is set for a recovery in the fourth quarter of 2009...
The major market indices need gains today to end the month in positive territory, something that is in jeopardy in early trading. Nonetheless, the second quarter has been a very strong one for stocks, but now there are concerns about a possible double dip recovery.
and from Marketwatch:
A shaky consumer-confidence reading that aggravated investors' fears of weak profits and a prolonged recession pushed stocks lower on Tuesday.
New housing data were also glum, though the market managed to hold steady at the open following their release. The losses in major indexes began to pile up about a half-hour after the bell, when the Conference Board said its index of consumer confidence for June fell to 49.3, from a revised 54.8 in May, which was originally reported as 54.9.
The Dow Jones Industrial Average was recently down about 100 points, or 1.1%. The S&P 500 declined 1%, hurt by declines in every sector. The Nasdaq Composite Index slipped 0.6%.
Market analyst Art Hogan, of Jefferies & Co., said it is particularly worrisome that the confidence index in June fell below the 50 level again. Readings above 50 signal expanding optimism among U.S. consumers, whose purchases constitute more than two-thirds of gross domestic product.
Any reading below 50 would tend to be bearish for stocks. But it was particularly disappointing to see the report dip below 50 after rising above the important mark, effectively undermining Wall Street's recent consensus that major economic yardsticks are due to level off and then gradually improve in the months ahead.
"That kind of news is all you really need to get the market down in the sort of environment we're in," said Hogan. "You don't have a lot of conviction in this market, so there's really not much underpinning for a rally to begin with."
