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.
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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."
No more details yet.
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