After Market: What a Weak First Trading Day Could Predict About 2014

The new year on Wall Street is off to a shaky start, with steep losses on Thursday, despite some decent economic news.

The Dow Jones industrial average (^DJI) slid 135 points, its first loss on the initial trading day of the year since 2008. And compare today's performance to a year ago, when the Dow soared 308 points. That was the second best gain of the year. The Standard & Poor's 500 index (^GPSC) fell 16 points, and the Nasdaq composite index (^IXIC) dropped 33.

The declines were broad-based, with the number of losers swamping gainers by nearly a 9-to-1 margin.

Here's why this down day may be worrisome: There's a very high correlation, nearly 90 percent, between what happens in January -- especially the first five days of January -- and what happens for the full year. It's certainly not time to panic, but it is something we'll keep a close watch on.

Despite the big losses, some of the interesting movers were on the upside.

Jefferies upgraded a number of retailers to "buy." Chico's (CHS) rose 3 percent, Urban Outfitters (URBN) and American Eagle (AEO) gained 2 percent, and ANN (formerly known as Ann Taylor) (ANN) jumped nearly 5 percent. However, Jefferies also lowered its ratings on two others. Abercrombie & Fitch (ANF) fell 2.5 percent and Aeropostale (ARO) edged lower.

Mining companies, which were among the few losers last year, rallied Thursday in sync with price of gold. Newmont Mining (NEM) and Goldcorp (GG) rose 4 percent each.

And solar stocks extended their gains. First Solar (FSLR) and SolarCity (SCTV) both gained 5 percent, and Jinko (JKS) jumped 9 percent.

On the downside, Continental Resources (CLR) fell 4 percent following a government safety warning that the company's Bakken crude oil may be less stable than traditional crude. Noble Energy (NBL) and Chesapeake (CHK) both lost 2 percent.

Elsewhere, Apple (AAPL) fell 1.5 percent on a Wells Fargo downgrade. General Electric (GE) lost 2 percent.

What to Watch Friday:
  • All day: Automakers release vehicle sales for December.
  • Federal Reserve Chairman Ben Bernanke talks about how the Fed has changed over the years at a meeting of the American Economic Association, at 2:30 p.m. Eastern time.
-Produced by Drew Trachtenberg.

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9 Comments

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udamann7

Have you ever heard of people cashing out their dividends??????

January 03 2014 at 5:25 AM Report abuse +1 rate up rate down Reply
jcclsc

Doom & Gloom! "What a difference a day makes."

January 03 2014 at 3:42 AM Report abuse rate up rate down Reply
Iselin007

No problem the entrepenurs will use high tech printers to print out rubber cheese for the cheese lines and save the real ink to fix their cooked books.

January 03 2014 at 2:40 AM Report abuse rate up rate down Reply
Iselin007

It's called payback for outsourcing jobs.

January 03 2014 at 2:28 AM Report abuse rate up rate down Reply
ezspin42

The only this yesterday tells us is people had some Christmas/Channukah bills to pay and they're just cashing in some stocks to do it

January 03 2014 at 1:10 AM Report abuse rate up rate down Reply
YourFtr

In 2014;
everyine will be employed...

to help pay for Obamacaire...

or else the Fine is $500 for being Unemployed......

January 02 2014 at 10:33 PM Report abuse rate up rate down Reply
YourFtr

Don't Panic....
Don't Panic.....

OK ! Panic !!

January 02 2014 at 10:30 PM Report abuse rate up rate down Reply
skcarcomed_0

tsgarpirving
Nice day skiing, did you have a nice day whining?

No need to answer, heading out for a beer and dinner.

)))))))))))))))))))))))))))))))))))))))

All in your land of make be-LIE-ve.

January 02 2014 at 8:50 PM Report abuse -5 rate up rate down Reply
fakeconomics1

HOAX---Both Repubs and Dems

Wall street does/can not dictate the consumer sentiment. Consumers drive the economy not wall street.
Please stop reading things from Blue or Red glasses--Consumers don't care if you are Blue or Red. Both Blues and Reds are irrelevant to economy

January 02 2014 at 8:36 PM Report abuse +1 rate up rate down Reply
surfundeep

Obama is yet another CFR member. They are socialists who are pledged to destroy Amirica's sovereignty (U.N.) and promote a one world government (NWO) where the priviledged class uses all others to serve their every whim. The Bushes and Clintons are CFR as well, so it's not a partisan thing, "political party" is the smokescreen they use to further their cause. In the end, their allegience is to Satan, the father of lies. Hear any lies from the White House lately? Can a leopard change it's spots? Discern!

January 02 2014 at 7:12 PM Report abuse rate up rate down Reply
1 reply to surfundeep's comment
topspin360

i'm glad that Obama really annoys you that much,even if it is rediculous.

January 02 2014 at 8:30 PM Report abuse -1 rate up rate down Reply