Marc Pado Comments: Bank Fuels Triple-Digit Pullback - FOX Business Online
FOX Business Online, April 15, 2009
Profit-taking in red hot financial stocks and a new reminder of the weak economy sent the markets reeling on Tuesday as the bulls take a breather from their recent run.
The Dow Jones Industrial Average tumbled 137.63 points, or 1.71%, to 7920.18, the S&P 500 fell 17.22 points, or 2.01%, to 841.51 and the Nasdaq Composite lost 27.59 points, or 1.67%, to 1625.72. The consumer-friendly FOX 50 dropped 12.16 points, or 1.90%, to 627.67.
“We are allowed to give a little bit back. We need this kind of action to test the market and find out if we have any legs,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business.
Tuesday's selloff came in the face of positive earnings reports from Goldman Sachs (GS: 115.92, 0, 0%) and Johnson & Johnson (JNJ: 51.34, n.a., n.a.%). The markets also failed to rally around optimistic commentary about the economy from Washington officials.
“In spite of what we heard out of Washington today, I think [the bulls] were due for a rest,” said Weisberg.
Even with Tuesday's slide, Wall Street is still in the midst of one of its biggest rallies on record. The Dow surged 21.98% over the previous five weeks, the best five-week win streak since May 1933. Other yardsticks such as the Nasdaq Composite and the S&P 500 are up even more from their March lows. Given those rallies, analysts weren't surprised to see a sharp pullback Tuesday.
“There are a million and one reasons why [the markets] should pull back. But I think we'll see a pullback that's not that significant,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald, who added that compared to the five-week rally, “this is a drop in the bucket".
Financial giants JPMorgan Chase (JPM: 30.79, 0, 0%), Bank of America (BAC: 10.12, 0, 0%) and American Express (AXP: 18.43, 0, 0%) were the biggest percentage losers on the Dow Tuesday. There were only several blue-chip companies making headway, including Citigroup (C: 4.0699, 0, 0%) and General Motors (GM: 1.75, 0, 0%) and Intel (INTC: 16.01, n.a., n.a.%), which was set to release quarterly results after the close.