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Worst Day for Dow and S&P Since August 2010

Wednesday, 1 Jun 2011 | 4:48 PM ET

Both the Dow and the S&P 500 kicked off the month of June with their worst-performing day since August 11, 2010. It's an ominous start to a month that has historically been difficult for the markets.

Fuse | Getty Images

Prior to today, since 1929, the Dow has fallen more than 1.5 percent on the first day of the month 49 times.

When that happened, it has ended the month in negative territory two-thirds of the time.

Furthermore, the Dow has often not recovered from its first-day losses. On occasions when the Dow was initially down more than 1.5 percent on the first day of the month, just over half the time it finished the month with an even bigger decline.

In each of the last three times the Dow ended the first day of the month down more than 1.5 percent (March 2009, September 2009, and October 2009), it has found a way to muster up a gain by the end of that month.

Inside the Worst Day in Nine Months

Certainly the stock market was down all day, but there was a little move lower at Noon ET in a bit of a technical trade. That’s when the S&P 500 failed to hold support, crossing below the 50-day moving average of 1330.

The euro also hit its session high right as European markets closed at 11:30am, but then dropped as Moody's downgraded Greece's credit rating to Caa1, its third lowest grade status and seven notches into junk territory.

Financials have been weak all day too—the biggest laggard in the S&P 500. After underperforming the S&P last month, the S&P FinancialsSector has underperformed the S&P 500 Index for 4 straight months and 12 of the last 14 months.

The Bank index also fell about 4 percent. That group has now broken out to a six-month low and is currenty significantly below its 200-day moving average.

Additionally, many of the global-growth companies were particularly weak today.

Industrials

  • Caterpillar
  • Ingersoll-Rand
  • Stanley Black & Decker
  • Jacobs Engenineering

Steelmakers

  • AK Steel
  • United States Steel
  • Nucor

Copper

  • Freeport-McMoRan

Aluminum

  • Alcoa


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