All ten sectors end lower led by materials sector
U.S. stocks closed sharply lower on Wednesday, 08 July 2015 after trading on the New York Stock Exchange was halted for three-and-a-half hours. Stock prices were trading sharply lower even before the trading suspension as investors grappled with a precipitous selloff in Chinese shares and nervousness over unresolved Greece debt crisis. Trading of all securities at NYSE was halted from 11:32 a.m. Eastern until 3:10 p.m. Eastern due to a technical glitch, while the exchange spokesperson it was not due to a cyber attack.
The Dow Jones Industrial Average dropped 261.49 points, or 1.5%, to 17,515.42, its lowest closing level since February. The Nasdaq Composite declined 87.70 points, or 1.8% to close at 4,909.76. The S&P 500 lost 34.65 points, or 1.7%, to close at 2,046.69, its lowest closing level since March. All 10 main sectors finished lower.
All ten sectors registered losses with cyclical sectors showing relative weakness throughout the day. The materials sector ended at the bottom of the leaderboard while top-weighted technology and financials also struggled to keep pace with the market.
The main indexes saw steady selling pressure throughout the session. Market reaction to the release of Federal Reserve minutes was largely muted.
Equities slumped at the start of the session in response to the overnight weakness in the futures market that could be traced back to the continued selling efforts in China. The Shanghai Composite lost 5.9% on Wednesday and it was reported that more than 50% of A-share listings have now been halted due to volatility.
Once the U.S. session began, stocks retreated through the opening hour, hovering near their lows until 10:30 ET when trading at the floor of the New York Stock Exchange was halted for nearly four hours due to technical issues. Electronic trading venues were not affected by the halt, but the lack of participation from floor traders kept the market inside a narrow range until an afternoon resumption, which was followed by a drop to new lows.
For the second day in a row, chipmakers led the retreat in the technology sector. Most of large cap tech components did not fare much better while Microsoft outperformed, shedding 0.1% after confirming plans to reduce its workforce by about 7,800 employees. The company said most of the job cuts will take place in its phone hardware division.
Economic data was limited to the MBA Mortgage Index and Consumer Credit. The weekly MBA Mortgage Index rose 4.6% to follow last week's 4.7% decline. Consumer credit increased by $16.10 billion in May after increasing an upwardly revised $21.40 billion (from $20.50 billion) in April while the consensus expected an increase of $18.20 billion.
Treasuries spent the entire day in positive territory with the 10-yr yield falling five basis points to 2.21%.
Today's participation was below average with fewer than 450 million shares changing hands at the NYSE floor.
Tomorrow, weekly Initial Claims will be released at 8:30 ET (consensus 276K).
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