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Stock Market Update for 02/22/2011

February 22, 2011

Stocks Seeing Early Weakness Amid Geopolitical Concerns

With geopolitical concerns generating considerable selling pressure, stocks have shown a notable move to the downside in early trading on Tuesday. The major averages have all fallen into negative territory, pulling back off last Friday’s multi-year closing highs.stock market update

The early weakness is due in large part to civil unrest in Libya, which has added to recent concerns about oil supplies and contributed to a significant advance by the price of crude oil.

Oil-sensitive airline stocks are posting particularly steep losses in early trading in reaction to the sharp rise by the price of crude. Networking, semiconductor, and housing stocks are also seeing significant weakness, while gold stocks are bucking the downtrend.

On the economic front, a report released by Standard & Poor‘s signaled continued weakness in the housing market at the end of 2010.

The S&P/Case-Shiller 20-City Composite Home Price Index fell at an annual rate of 2.4 percent in December compared to a 1.6 percent drop in January. The decrease in December came in line with economist estimates.

Also this morning, the Conference Board is scheduled to release its consumer confidence report for February at 10:00 a.m. ET.

The report, which is based on a survey of 5,000 U.S. households, is expected to show that the consumer confidence index rose to 65.0 for the month from the reading of 60.6 posted for January.

In earnings news, Wal-Mart (WMT) posted adjusted fourth-quarter net income of $1.34 per share, better than the $1.31 per share forecast on Wall Street. Revenues grew to $116.36 billion from $113.62 billion in the prior-year quarter but still failed to meet expectations for $117.68 billion.

Home Depot’s (HD) fourth-quarter net earnings came in at $0.36 per share, above forecasts for $0.31 per share for the quarter. The company reported sales of $15.13 billion, topping projections for $14.80 billion.

The major averages have moved off their lows for the young session but currently remain firmly in the red. The Dow is down 96.53 points or 0.8 percent at 12,294.72, the Nasdaq is down 48.79 points or 1.7 percent at 2,785.16 and the S&P 500 is down 15.66 points or 1.2 percent at 1,327.35.

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