They Gotta Buy ‘Em
The Nasdaq win streak ended at three following a mixed bag of economic
numbers, but the average did manage to hang on to most of the week’s nearly 10%
gain as it closed Friday down just over 0.5%. As mid-day approached, the Nasdaq
rallied but hit resistance just shy of the 2700 level which will likely stand as
the near-term challenge for the Naz.Â
Volume eased a bit from Thursday’s levels, but a heavy 2.51 billion shares
traded on the Nasdaq, and 1.26 billion shares changed hands on the NYSE.
In economic news, the December PPI came in flat while the core PPI was up 0.3%. Analysts had expected a 0.2% increase in the PPI and a 0.1% increase in
the core. Retail sales rose 0.1% in December which was quite a surprise given the
expected 0.5% decline.
Financials faltered on the economic news which suggested that the Fed may not
really need to decrease rates by another 50 basis points at the Jan. 31 Fed
meeting since the economy looks a tad stronger than most analysts were
predicting. What traders did like this week was the market’s resiliency to
negative news.
“Warnings and disappointments are finally not being greeted with market
deterioration but greeted with buying. We’re in January, and we have a flow of
funds starting. We have a market that for the last 9 months has been discounting
every bad piece of news we’re hearing now, and they got the stocks down to
levels where they’re washed out and are actually okay,” said Arnie Owen,
Managing Director of Equities, Cruttenden Roth: .
“You have institutions and mutual funds with cash, and they have to put
it to work. You’re getting guys coming in kicking and screaming that they don’t
wanna, they don’t wanna, they don’t wanna, but they gotta, and that’s my
favorite kind of market and my favorite kind of rally,” he added.
According to preliminary numbers, the Nasdaq slipped 14.45 to 2626.12, the
Dow fell 85.80 to 10,523.75, and the S&P 500 eased 8.31 to 1318.51.
Top sectors included biotechnology
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On the weak side were banks
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products
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and insurance
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While the semiconductors were weak, it was fairly constructive that they held
above their 50-day moving average. Chips getting hit hardest were Altera
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down 6.5%, KLA Tencorp
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8.1%.
One tech standout closing back above its 200-day moving average was Ciena
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which gained 5 3/8 to 88 7/8 on heavier-than-average volume.
Dow winners were Disney
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Hewlett Packard
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Looking ahead, the financial markets are closed Monday for the Martin Luther
King, Jr. holiday. The next big economic news will be the December Consumer
Price Index which will be released Wednesday at 8:30 AM ET. Analysts expect an
increase of 0.2%.
Have a great weekend,