What Today’s Economic Reports Confirm…
The
market is weak today from signs
that the economy’s weakness is still relevant.
Two economic reports released today back this up.
The National Association of Purchasing Management-Chicago said its factory index
fell to 48.1 this month. That was down from 54.9 in August and the first reading
below 50. This indicates contraction in the economy since January.
On the last trading day
of Q3, there is lower volume on the day with
market internals very negative. The three major indices are all off of their
worst levels of the day.
At the beginning of trading, stocks
dropped, driving the Standard & Poor’s 500 Index and Dow Jones Industrial
Average toward their largest quarterly losses since the 1987 market crash.
Personal income rose 0.4% in August, the Commerce Department
reported, while spending increased 0.3%. Some Analysts had forecast a 0.5% gain in both.
Weak sectors include: Internet,
Networking, Banking
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PowerRating), Retail, Insurance,
Paper
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PowerRating), Software, Telecom, Wireless,
Defense, Airline
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PowerRating), Lodging and Broker/Dealer
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PowerRating).
There are few strong sectors, Gold
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PowerRating),
Tobacco, Biotech
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PowerRating) and Health.
Key support levels for the major averages are as
follows: The Dow Jones Industrial Average
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PowerRating) has support at
7500. The Nasdaq Composite
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S&P 500 Index
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PowerRating) has support at 500.
Abbott Labs (ABT) is pulling back to the
intersection of the 20- and 50-day moving averages. ABT is down 0.36 to 39.99
and is holding a 3-month relative strength rank of 96 from TradingMarkets.com.
Stericycle (SRCL)
is breaking above the 50% retracement line with increasing volume. SRCL has a
TradingMarkets.com RS3 rating of 82. SRCL is trading at 34.32 up 1.47.
Fresh Del Monte Produce (FDP) is rallying above
the 50% retracement line with increasing volume. FDP is trading at 24.65 up .70.
Nasdaq Breadth
Adv: 1020 UpVol: 1585984
Dec: 2136 DnVol: 6038320
Net: -1116 Net: -4452336
NYSE Breadth
Adv: 999 UpVol: 16414610
Dec: 2134 DnVol: 68580588
Net: -1135 Net: -52165978