United States stocks fell last Tuesday by earnings-related selling in Walmart and a drop in commodity stocks with concern about China's economy. Walmart Stores (WMT) fell 3.4 percent and closed at $69.48, its lowest in nearly 2 years. Chinese stocks on the other hand, fell more than 6 percent overnight. Oil prices and industrial metals including copper have dropped as devaluation of the Yuan continues.
However, the largest decliner has been the materials sector among the top ten industry sectors. According to Daily Finance, Freeport McMoRan fell 3.1 percent and closed at $9.92. Recent acquisition of Plains Exploration and McMoRan Exploration for $9 billion in 2012 and the collapse of its market (China) are the contributing factors of this recent decline. Currently, the company is in debt of $20 billion and one of the ways to raise funds is either to sell their assets or spin off those same assets it bought to a new entity.
"You would think that a 6-percent China move amid the recent currency adjustments would have netted a more negative result," this according to Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. He added that the market has not yet found a reason to dip lower or soar record high so it's been like a rubber-band kind of mentality.
On the other hand, homebuilders continued to win as construction of single-family continues, suggesting that economy is on fire. The PHILX housing sector index increased 1.3 percent for the eighth straight session.
Doug Cote, chief market strategist at Voya Investment Management expressed his optimism, ""Housing starts was a very good number, with positive revisions, and I think that caught the market's eye". Moreover, Home Deport rose to 2.6 percent to $122.80, a record closing high. Fellow winners TJX Cos sore 7.2 percent to close a record high $76.78.
Dow component Disney and CBS all fell 1.9 percent and 1.4 percent respectively after Wells Fargo cut its rating on stock together with other five media companies.
