Market Wrap: Wall Street Ends Lower in Volatile Session

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By Caroline Valetkevitch

NEW YORK -- U.S. stocks ended down slightly in a volatile session Tuesday, led by a drop in materials and energy shares following further weakness in commodity prices.

The Standard & Poor's 500 index (^GPSC) slipped under its 50-day moving average of 2,046 around midday, triggering weakness, while volume also picked up. All three indexes fell from highs of more than 1 percent during the session, with the S&P 500 moving more than 48 points from its high for the day to its low, its widest range since Oct. 15.

Shares of homebuilders fell 1.5 percent after KB Home forecast a drop in gross margins for the first quarter. Homebuilder stocks had been up earlier in the session, but KB Home (KBH) dropped 16.3 percent to $13.87, its biggest percentage fall since 1992.

%VIRTUAL-pullquote-We're seeing commodity prices continue to go down, not only in oil but across the board.%Shares of Freeport McMoRan (FCX) slid 7.5 percent to $21.04, and were the S&P 500's biggest percentage decliner. The S&P materials index fell 1.2 percent and was the S&P 500's worst-performing sector.

Copper prices dropped further below $6,000 per tonne to their weakest level in more than five years, while oil prices tumbled to near six-year lows before recovering.

"We're seeing commodity prices continue to go down, not only in oil but across the board. So it's this fear of lower commodity prices leading to global deflation which is leading this nervousness," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

The S&P energy index was down 0.7 percent, with shares of Exxon Mobil down 0.4 percent at $90.

Major Indexes End Lower

The Dow Jones industrial average (^DJI) fell 27.16 points, or 0.15 percent, to 17,613.68, the S&P 500 lost 5.23 points, or 0.26 percent, to 2,023.03 and the Nasdaq composite (^IXIC) dropped 3.21 points, or 0.07 percent, to 4,661.50.

The losses extended the recent decline to a third day. The S&P 500 is now down 3.2 percent since its Dec. 29 record high, marked by concerns about plunging oil prices, global economic weakness and Greece's potential exit from the eurozone.

A reduction in the amount to hedging in the market as shown by options on the CBOE Volatity index suggests some investors may be more exposed to big fluctuations in the stock market, said Joe Bell, senior equity analyst at Schaeffer's Investment Research in Cincinnati. The VIX ended the day up 4.9 percent at 20.56.

Earnings Season

Results have begun rolling in for U.S. quarterly earnings, though estimates have fallen sharply in recent months as oil prices sold off.

Goodyear Tire & Rubber (GT) stumbled 7.1 percent to $26.05 after the company estimated full-year operating income growth "slightly below" its forecast of 10 to 15 percent.

About 7.8 billion shares changed hands on U.S. exchanges, above the 7.2 billion average for the last five sessions, according to BATS Global Markets.

NYSE decliners outnumbered advancers 1,627 to 1,460, for a 1.11-to-1 ratio; on the Nasdaq, 1,393 issues fell and 1,326 advanced, for a 1.05-to-1 ratio favoring decliners.

The S&P 500 posted 57 new 52-week highs and 21 new lows; the Nasdaq Composite recorded 113 new highs and 105 new lows.

What to watch Wednesday:
  • At 8:30 a.m. Eastern time, the Commerce Department reports retail sales for December, and the Labor Department reports import and export prices for December.
  • The Commerce Department releases business inventories for November at 10 a.m.
  • The Federal Reserve releases its latest survey of regional economic conditions across the nation at 2 p.m.
These selected companies are scheduled to release quarterly financial results:
  • JPMorgan Chase (JPM)
  • Wells Fargo (WFC)
The 7 Best Things to Buy in January
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Market Wrap: Wall Street Ends Lower in Volatile Session

At the end of December, gyms are mostly empty. The beginning of January turns gyms into madhouses. While it may seem smart for gyms to hike prices in the new year, they do the opposite to persuade you to join their facility versus their competitors'. In fact, says that membership fees waived by gyms in January can save you over $100.

On that same note, January is an excellent month to purchase those yoga mats, ellipticals, DVDs, treadmills, dumbbells, workout apparel and anything else that will help kick you into shape. These fitness necessities are often marked up to 70 percent off the retail price both online and in stores. Also, check out deal websites such as Groupon and Living Social for an uptick in fitness-related steals throughout January, and head to resale shops for gently used fitness equipment, especially toward the end of the month when people donate their old stuff to make room for new goods.

January is arguably the best month to buy winter clothing. For starters, retailers gear up to showcase spring apparel and, to help move product, they drop prices on those cable-knit sweaters, denim goods, scarves, boots, coats and more. Secondly, January is an excellent month to buy winter apparel because you still get plenty of wear out of whatever you buy. Note that the further into January we go, the deeper the discounts.

OK, so you don't actually buy credit cards, but you can certainly apply for a new one. In the spirit of new year's resolutions, which often include battling debt, we suggest taking advantage of the many credit card promotions this month. For example, numerous credit cards offer 0 percent annual percentage rate on balance transfers this time of year, providing you with six months to a year of interest-free debt repayment. If you have a high-interest credit card, consider transferring the balance and paying it down aggressively. Other credit card promotions include an increase in cash back and bonus miles.

Yep, it's tax season. While the thought is sure to induce a few groans, know that there are at least a few deals to be had along the way. In January through late March, you can find tax filing software for up to 50 percent off the retail price. In-person tax filing services also hold promotions, so look out for specials. We suggest signing up for emails or joining social media pages to stay in the loop on all the above.

If you have any plans to make over your home in the near future, now's the perfect time to pounce. Big retailers -- including Target (TGT), Home Depot (HD), Crate & Barrel, Sears (SHLD) and JCPenney (JCP) -- heavily discount their furniture and home goods collections in January, says The website says you can "expect to see furniture clearance sales that take between 40 percent to 75 percent off regular prices."

Philadelphia department store owner John Wannamaker started the white sale tradition in 1878 (adapted from those fashionable French). He recognized that sales dried up after the holidays and that people just didn't get out of the house and buy much during the dreary, cold months. So he ran white sales, named after the pristine snow and the products discounted. These white sales still take place to this day. Expect to find sheets, towels, curtains, napkins, and more for between 30 percent and 60 percent off the retail price.

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