UPDATE: Federal Reserve June minutes dovish, NYSE closes down

UPDATE: Federal Reserve June minutes dovish, NYSE closes down

In latest minutes Yellen, Fed still nervous about raising interest rates in a time of international chaos. NYSE remains crippled.

The increasing potential for a Grexit is compounded by a water falling Chinese market. Cartoonist Branco gets the European mood just right in his latest cartoon.* (Reprinted by arrangement)

WASHINGTON, July 8, 2015 – The U.S. stock market remained decisively down into the Wednesday afternoon closing bell, as nervousness about oil, China, Greece and pretty much everything else turned sellers out in droves to drive all major averages down good and hard. But complicating a read on the market this afternoon was a major computer glitch that caused a prolonged trading halt at the New York stock exchange that lasted approximately three hours.

As stocks had already turned sour, it was difficult to know if this trading issue contributed to stocks’ waterfall Wednesday decline..

UPDATING: Ultimately, the NYSE reopened trading at approximately 3:10 p.m. EDT. According to CNBC, NYSE President Thomas Farley stated:

“I can’t say with precision exactly what drove it.” We found what was wrong and we fixed what was wrong and we have no evidence whatsoever to suspect that it was external…. ” The issues did not affect the electronic NYSE Arca and NYSE Amex/Arca Options. The Nasdaq reported no technical problems, saying it continued to trade NYSE-listed stocks during the halt.

“By about 3:15 p.m. ET, the NYSE said “all systems are functioning normally” except the Openbook data feed for the NYSE MKT primary markets. Volume was light after floor trading restarted and closing auctions continued as normal.”

Perhaps due in part to the outage, it was difficult to gauge what kind of reaction investors were actually having to the release at 2 p.m. EDT of the Federal Reserve’s June minutes. A quick read would indicate that the Fed is still cautious about naming a date for its first interest hike given the currently touchy international economic situation, with China’s stock markets out of control and in disaster mode and with odds more strongly favoring a Grexit happening soon in the Eurozone. That will be interesting, to say the least.

Elsewhere, oil struggled at around the 50 handle, and there’s little positive news to consider there, either. And China. Well, so much for central economic planning by the genius Chicoms. Problem with open markets is that they’re hard to control. China knows that now. And the NYSE is learning the lesson anew today.

By the close, all the closely followed stock market averages were down hard, with the Dow closing off nearly 1.5 percent at 261.49, followed by the S&P 500, down 34.65, the tech-concentrated S&P 100 off a colossal 77.48, and the NASDAQ down a horrendous 87.70.

Although we made a couple of tiny, opportunistic trades today (which we may very well live to regret), it’s a good idea to stay out of this mess until things settle down. Both China and Greece would seem to have plenty of negative love to give U.S. shareholders this week, so unless you have an iron constitution, it’s probably a good idea to stand clear until some of the smoke clears from the battlefield.

We think the market is rapidly re-entering short term oversold conditions, so perhaps it’s best to wait for the next dead cat bounce to unload a few more positions. Meanwhile, neither the Greek nor the Chinese problem will be over until they’re over.

At this midpoint of the year, 2015 is not looking like the kind of year where you can make much money. Best thing to do, perhaps, is to hold on to those dividend-paying stocks and cautiously begin to sneak into beaten down REITs as the occasion warrants.

In addition, now that the U.S. Supreme Court has made what’s likely their final, idiotic and wrongheaded decision on Obamacare, healthcare stocks are once again safe to buy again under the right conditions, which obviously weren’t in force Wednesday afternoon.

That’s it for today. We’ve had enough.

* Cartoon by Branco, reprinted with permission by providing this link back to Comically Incorrect.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17