UPDATE: Another factor in the midday drop: a strong dollar, which has hurt commodity stocks.
Energy and material stocks turned weaker a little after 2:30pm ET. One possible cause: the euro rallied, the dollar weakened as the Irish Parliament passed the first in a series of votes on the budget...the implication is that the budget will pass, and bailout funds will be released. This is euro-positive, dollar negative.
Dividend payers: why not a boost? I've been asked why some of the big dividend payers — telecom, REITs, and utilities — aren't having a better day on word that dividend tax cuts will be extended. Some utilities are actually trading DOWN today.
The easy answer is that: 1) the extensions were expected, and 2) these stocks tend to be low beta names, particularly telecom and utilities. Traders clearly have a preference for higher beta names going into the end of the year, particularly since those names have outperformed.
Stocks dropped late Tuesday afternoon on worries of expanded insider trader probe.
The S&P 500 dropped about 5 points, the dollar moved to its highs for the day and Treasurys dropped at about 3pm ET, likely on this Reuters headline:
"FEDERAL AUTHORITIES HAVE RAMPED UP WALL STREET INSIDER TRADING PROBE...MORE THAN A DOZEN SUBPOENAS SENT TO HEDGE FUNDS, OTHER INVESTMENT FIRMS...SUBPOENA TOTAL INCLUDES THOSE SENT TO WELLINGTON, SAC CAPITAL, OTHERS."
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