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Stocks Close Lower As Strong Quarter Ends

Stocks closed out the quarter on a low note after rough economic data left investors questioning the strength of the recovery. In fact, the top drags in Wednesday's session were some of the quarter's best performers, including industrials, materials and banks .


3RD QUARTER WINNERS TODAY'S LOSERS

3rd Quarter Wednesday
Financials (XLF) +25% -1%
Industrials (XLI) +21% -1%
Materials (XLB) +21% -1%

Even so, the Dow -- up 15 percent this quarter -- marked its best quarterly performance since the fourth quarter of 1998, while the S&P 500 notched its second straight quarterly advance of 15 percent. The Nasdaq gained 15.7 percent for the third quarter.

What’s the trade?

At first, I expected the market to completely breakdown today, says Guy Adami. But it didn’t. And when it reversed I thought it was going to explode higher and it didn’t do that either. It’s very interesting.

It’s sudden death, adds Joe Terranova. We’re watching the battle of the bulls and the bears.

I’m still bullish long-term, adds Steve Grasso. But I noticed that when the S&P hit 1063 investors moved to the sidelines. That suggests a great deal of caution going into October.

There seems to be a chase in this market, says Karen Finerman. I remain mostly bullish because I think there’s a lot of money on the sidelines and it continues to chase returns.

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BREAKING NEWS: KEN LEWIS TO STEP DOWN BY END OF YEAR.

In the after hours, shares of Bank of America moved higher after CNBC’s Charlie Gasparino revealed that, according to his sources, Bank of America CEO Ken Lewis has decided to step down from his position at the company by the end of the year.

Gasparino emphasizes that Lewis was not pushed out – the resignation was completely his decision.

Minutes later Bank of America confirmed the news.

What’s the trade?

I think it’s mildly positive for the stock, muses Karen Finerman. The resignation isn’t a huge surprise.

It makes me wonder if more trouble lies ahead for Bank of America, muses Guy Adami. However I do think BAC is an investible stock, long-term.

The market seems to find the move a positive because so much anger is focussed on Ken Lewis, explains analyst Dick Bove. But Ken Lewis is a brilliant bank executive and I think it's a loss. For him to be pushed out is almost outrageous.

And I'd assume that Brian Moynihan is the front runner to take over, adds Bove.

> For complete coverage of this developing story click here.

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BREAKING NEWS: PENSKE/SATURN DEAL FALLING APART

On WednesdayGM announced plans to wind down its Saturn brand after Penske ended talks to acquire the business.

An agreement with another manufacturer to make the cars fell through, and "without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction." Penske said in a statement.

As you may remember, in June, Penske agreed to take over the Saturn brand and related dealerships, with GM producing the vehicle for a limited period of time.

What’s the trade?

I’m not sure there’s a trade off this, says Guy Adami. Maybe get long Ford .

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TOPPING THE TAPE: OIL SURGES

Oil prices surged more than 5 percent to settle above $70 a barrel on Wednesday, buoyed by a drop in gasoline supplies.

Further price support came from a weak dollar, which makes crude more affordable for buyers using other currencies.

However for the quarter, crude futures were little changed, up 72 cents from the June 30 close of $69.89 a barrel.

What’s the trade?

Gasoline drives the energy complex, explains Joe Terranova. I’d look at refiners such as Sunoco . And I’d get long commodities, he adds. I expect to see the dollar under pressure in Q4 and as a result oil, gold and other metals should rally.

I’m still concerned about the CFTC, says Karen Finerman. There’s potential regulation looming for the oil markets.

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TOPPING THE TAPE: GOLD SPARKLES TO END QUARTER

U.S. gold futures closed above the psychologically important $1,000 an ounce level on Wednesday, with a weaker dollar, the crude oil rally and simmering geopolitical tensions in the Middle East driving demand.

What’s the trade?

Gold has had every reason to go down but it hasn’t, says Joe Terranova. I’m bullish and I established a long position.

But it had every opportunity to go up and it didn’t either, adds Guy Adami. However I do think it goes higher in the near term. But the trade scares me.






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