Why The Market Was Weak Today
CNBC "On-Air Stocks" Editor
There are several reasons the market was weak today:
1) The brief rally in financials has ended, as many traders are betting that the bear market is not over, this means that taking profits or placing additional short bets on potentially weak players is a prudent play;
2) Major consumer discretionary companies like Ford (autos), Starwood(hotels), Ryland , and Chipotle (restaurants) had negative earnings and/or negative commentary about the second half, so most stocks in these sectors are weak today;
3) Even though oil is up modestly today, most energy stocks remain down. Energy stocks have dropped 15 percent this month; Birinyi noted this afternoon that "the sector was the most oversold it has been since the market bottom on 7/23/02."
4) Economic conditions continue to be soft in Japan and Europe, so big stocks that figure in the global economy (international banks, and materials like steel and metals) are also trading down
Bottom line: when you have consumer discretionary, financials, energy and materials all weak, it's little wonder the markets are down.
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