Japan Aftershock Slows Wall Street Trade, but Market Losses Kept in CheckFeatured News, Finance Friday, April 8th, 2011
A wave of reignited fears about Japan’s nuclear crisis has dipped Wall Street trade on Thursday, but losses were kept in check due to the general faith in the U.S. economic recovery. Japan has suffered a recent 7.4 magnitude aftershock, which fortunately didn’t generate any tsunami to worsen the situation at the Fukushima Daiichi nuclear plant, already crippled by 11 March’s massive earthquake.
Therefore, the declines in the broader market have been restricted by a welcome ascent in retail stocks registered after the release of better-than-expected reports relative to March chain-store sales, while new proofs of a sustained economic recovery have been piling up. On the other hand, although investors have tried to practice cautious transactions in order to buffer further market losses following the magnitude 7.4 aftershock in Japan, there was no concrete move to safer assets. Relative to this matter, John Canally, economist at LPL Financial in Boston, Massachusetts, explained the traders’ reticence by saying: “”It made people think that this is an ongoing crisis that could further hurt stocks, but one thing we didn’t see is the flight to safety.”
Despite the rekindled Japanese nuclear concerns, U.S. economy’s steady path to recovery has led to a more than 2-percent rise in the CBOE Volatility Index VIX, Wall Street’s so-called fear gauge, which closed up 1.2 percent at 17.11. Speaking about the VIX’s trajectory, Chris McKhann, analyst at stock and options website optionMonster.com in Chicago, said it was only slightly affected by the earthquake news, “further supporting the fact that nothing seems to shake this market.”
Early trading featured weak stock transactions, the S&P 500 index encountering strong technical resistance that blocked gains despite favorable premises embodied in a larger-than-expected drop in weekly initial U.S. jobless claims and data on the surprisingly strong March retail sales. Among retailers that have had a good run are counted Costco Wholesale Corp (COST.O), which beat expectations with its shares gaining 3.8 percent to $77.82, and Macy’s Inc (M.N), which rose 0.8 percent to $25.40. Meanwhile, Target Corp (TGT.N) fell 2.6 percent to $49.62.
All three major Wall Street indexes took a downward move, with the Dow Jones industrial average .DJI falling 17.26 points, or 0.14 percent, at 12,409.49, the Standard & Poor’s 500 Index .SPX going down 2.03 points, or 0.15 percent, at 1,333.51 and the Nasdaq Composite Index.IXIC dropping 3.68 points, or 0.13 percent, at 2,796.14.
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