Today's action was focused on the comments from European Central Bank President Mario Draghi. During his press conference, Mr. Draghi failed to announce new measures to help stem the European debt crisis. The S&P 500 quickly dropped to 1,360 and hovered around that level until the final hour of the session. During the final 60 minutes stocks were able to recover a portion of their losses, and the S&P 500 finished down 0.7%.
European indices were considerably higher ahead of the press conference before sharply reversing into negative territory. Spain's IBEX plunged 5.2%, while Italy's MIB tumbled 4.6%. Spain's 10-yr yield was holding at 6.65% ahead of the announcement and rallied to close up 43 basis points at 7.165%.
The latest weekly initial jobless claims count totaled 365,000, which was in-line with the 365,000 that had been expected. The tally is also up from the upwardly revised prior week count of 357,000. As for continuing claims, they fell to about 3.272 million from 3.291 million.
June Factory Orders showed a 0.5% decrease which was worse than the 0.6% increase that had been expected.
Knight Capital Group (KCG 2.58, -4.36) finished near session lows as yesterday's execution glitch is said to have cost the firm $440 million in direct losses. Several firms have indicated that they have used other systems to route their orders. With 155 million shares traded, volume in the stock has been more than 100 times the average daily volume of 1.2 million.
First Solar (FSLR 17.93, +3.13) surged 21% after the company handily beat earnings and revenue estimates. Today's jump lifted the stock past resistance near $16.60 which had held since mid-May.
Abercrombie & Fitch (ANF 29.06, -4.96) dropped 14.6% after issuing disappointing guidance. Lower sales expectations spilled over to competitor Aeropostale (ARO 13.08, -6.37) whose shares fell 32.8% on heavy volume.
Gap (GPS 33.17, +3.75) was able to buck the trend. Shares advanced 12.8% after the retailer reported better-than-expected same store sales and improved its second quarter outlook.
Given their European exposure, financial stocks have felt the brunt of today's selling. The SPDR Financial Select Sector ETF (XLF 14.48, -0.11) slid 0.8%. Morgan Stanley (MS 13.03, -0.48) was down 3.5%.
European financials were hit especially hard with Deutsche Bank (DB 28.35, -1.45) and Barclays (BCS 10.05, -0.38) lower by 4.9% and 3.6% respectively.
The euro saw volatile trading around the Mario Draghi press conference. The single currency rose to 1.2365 versus the dollar in anticipation of the bank president's comments. The euro tumbled to 1.2210 after Mr. Draghi failed to offer fresh plans to solve the region's debt crisis. Following a brief pause, it fell further, touching 1.2170.
Crude oil brushed a session low of $86.92 per barrel as equity markets opened before recovering some of its losses in morning action. Crude managed to trade up to a session high of $88.48 but was unable to sustain the momentum and eventually settled down 2.0% at $87.20.
More than 100 companies will report their quarterly results after the bell.
Energy components EOG Resources (EOG 96.12, -4.32) and Sunoco (SUN 47.37, -0.81) saw respective losses of 4.3% and 1.7% ahead of their results.
Shares of Kraft Foods (KFT 38.94, -0.45) saw a steady rise but were unable to push through resistance in the $40.00 area. The company's earnings are due out after the bell with Investors expecting $0.66 in earnings on $14.1 billion revenues.
LinkedIn (LNKD 93.51, -2.13) is also scheduled to report today. Estimates call for earnings of $0.16 on revenues of $215.97 million.
Nonfarm payrolls, nonfarm private payrolls, unemployment rate, hourly earnings, and average workweek will be released tomorrow at 8:30 AM ET.