Saturday, June 29, 2013

Stocks snap three-day winning streak, open lower

stocks

24 minutes ago

Stocks skidded back into the red on Friday, as investors seemed reluctant to jump in following a three-day winning streak and after a Fed governor outlined a hypothetical start date for the slowing down of asset purchases.

Fed Governor Jeremy Stein highlighted the upcoming September policy meeting as a possible time when the central bank may need to consider paring back its QE program, adding that the Fed considers the overall economic improvements since it launched the stimulus instead of giving undue weight to the most recent round of tepid economic data.

(Read More: Buckle Up! Expect More Market Volatility This Year)

Stein's comments contradicted comments from other Fed policymakers who have suggested the central bank will bide its time before scaling back its bond purchases.

The Dow Jones Industrial Average eased and was down 56 points in early afternoon trading, after logging its third-straight three-digit rise on Thursday. The Dow is on track for its strongest first half of the year since 1999.

The S&P 500 and the Nasdaq also poked back into negative territory. The S&P 500 is on pace for its best first half since 1998.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, slid near 16.

Among key S&P sectors, consumer discretionary and utilities led, while techs held small losses.

Meanwhile, Richmond Fed President Jeffrey Lacker said markets should brace for more volatility as they digest news the Fed will scale back bond buying later this year, but the swings will not derail growth. Lacker said he expects U.S. growth to remain around 2 percent for the "foreseeable future."

Cleveland Fed President Sandra Pianalto and San Francisco Fed President John Williams were also scheduled to speak throughout the day. Williams' speech may attract particular interest, as he has previously advocated tapering back bond purchases as early as this summer.

(Read More:Fed Out in Force as Markets Stabilize)

On the economic front, business activity index in the Midwest fell in June to 51.6 from 58.7 in May, according to the Institute for Supply Management-Chicago. A Reuters survey of economists on average expected a median reading of 56.0 in June versus the May figure of 58.7.

Meanwhile, consumer sentiment improved in late June, with the final reading on the overall index at 84.1, above the preliminary reading of 82.7, according to Thomson Reuters/University of Michigan. Economists polled by Reuters had forecast the final June reading of 82.8.

Japan's benchmark stock index hit a three-week high on Friday on the back of positive economic reports that include much stronger than expected industrial output and retail sales numbers.

"We had better job market numbers, better production numbers, and even consumer prices are picking up. So data-wise, today is a pretty good day for Japan," said Takuji Okubo, principal and chief economist at Japan Macro Advisors.

Traders will closely watch gold prices, as the precious metal dipped below a key level of $1,200 per ounce. Analysts warned that miners could be severely affected if prices remain this low.

(Read More: Three Reasons Gold Will Go to $800)

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