This Could Clear Up The Picture
The markets were on a
southbound train today as the price action held a downtrend from bell to bell.
There were no sectors left green today, with Internet, telecoms, software, and
broker/dealers deep in the red. After yesterday’s upside move on the highest
volume in a month, the market turned around and fell below major moving
averages. Gary Kaltbaum says this is probably the most split market he’s ever
seen. Now that earnings season is underway, the picture will hopefully clear up
for a more affirmative direction.
The
Dow Jones Industrial Average
(
$INDU |
Quote |
Chart |
News |
PowerRating) closed down 1.98% at 10176.08.
The S&P 500
(
$SPX |
Quote |
Chart |
News |
PowerRating) closed down 2.36% at 1103.69. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) closed down 2.36% at
1725.29.
Negative news from Dow stocks
set the tone for the day, as economic releases had little impact on the market.
Initial jobless claims fell 55,000 to 438,000, while the four-week average
reached its highest since early December. Last week’s surge in the numbers is
said to be caused by re-applications for extended benefits.Â
Market breadth was negative,
with NYSE declining issues over advancing issues by a ratio of 2.0, and down–volume
over up–volume
by a 6.25 ratio. Nasdaq declining issues over advancing issues came in at 1.92,
and down–volume
beat up–volume
by a 3.64 ratio. The
VIX
was up 2.08 at 22.30. The TRIN
was up 1.84 at 3.12.
The Dow volume was average
today as it erased all of yesterday’s gains, closing below its 50-day MA; the
S&P 500 closed below its 50-day MA, while the Nasdaq moved another step
closer to its February low. The Semiconductor Index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), down
1.86%, closed below its 50-day MA. The Broker/Dealer Index
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), down 4.35%, fell below its 50-day MA, just above its 200-day
MA.
There were no sectors closing positive today.
Losing
sectors of the day were the CBOE Internet Index
(
$INX.X |
Quote |
Chart |
News |
PowerRating),
down 6.16% at 98.40,
and the North American
Telecom
Index
[$XTC.X|$XTC.X], down 5.05% to 536.76.
Conglomerate and Dow component General
Electric (GE),
down 9.27% at 33.75, met earnings expectations of 35 cents a share for 17%
growth from a year ago.
Computer hardware powerhouse International
Business Machines
(
IBM |
Quote |
Chart |
News |
PowerRating), down 5.41% at 84.19, is the apparent subject of
an SEC investigation as its stock hit a new 52-week low. The stock is also on
TM’s Implosion
List.
Internet firm Yahoo! Inc (YHOO),
down 16.21% at 15.45, reported a loss of 9 cents a share compared to 2 cents a
year ago.
Communications equipment maker AT&T Corp
(
T |
Quote |
Chart |
News |
PowerRating), down 7.97% at
13.27, also dragged the Dow down as it asked its shareholders to approve a
reverse stock split.
Computer hardware maker Apple Computer (AAPL),
up 0.81% at 24.86, has been upgraded by UBS Warburg to “strong buy”
from “hold” as earnings estimates were raised for the second half of
the year.
Software company Cognos Inc. (COGN),
down 10.21% at 23.47, said the profits for its quarter ending in May will be 8
to 9 cents a share, lower than the 12 cents a share expected.
Chip maker Rambus Inc. (RMBS),
down 1.33% at 7.40, announced lower fiscal second
quarter earnings
as price declines in its
market hurt profits.
Media company and Wall Street Journal publisher Dow Jones
(
DJ |
Quote |
Chart |
News |
PowerRating), down 3.88% at 57.61, fell after it reported first quarter earnings well
below estimates and also warned that profits will come in lower than expected
for the second quarter.
On a positive note, Network Associates
(
NET |
Quote |
Chart |
News |
PowerRating), up 2.30% at 22.66,
reported better than expected first quarter earnings and anticipate an
improvement in the second quarter as well.
In the retail sector, discount retailer and Dow component Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating), down 0.66% at 60.17, said its same-store sales rose 9.5%. Clothing
retailer Gap
(
GPS |
Quote |
Chart |
News |
PowerRating), down 10.23% at 13.86, reported a 12% decrease in
sales. Discount retailer Target
(
TGT |
Quote |
Chart |
News |
PowerRating), down 0.17% at 44.67, said
March comparable-store sales increased 6.8%. And also in the discount retailing
department, Federated Dept. Stores
(
FD |
Quote |
Chart |
News |
PowerRating), down 2.52% at 40.50, said
same-store sales increased 0.2%, though reaffirmed its guidance that same-store
sales will fall 2% to 3% in April.
From TM’s proprietary Implosion
List, security systems company Invision
(
INVN |
Quote |
Chart |
News |
PowerRating) fell 8.09% to
29.86.