Looking Ahead In Confidence
Stocks opened lower Tuesday ahead of the 10:00 a.m. consumer confidence
numbers.
Once the numbers were reported, the markets tanked even further and continued
to trade lower throughout the morning and early afternoon session. Economists were expecting a rise in the index to 117 from July’s number of 116.5. However
the July numbers were revised downward to 116.3 and the index in August fell to 114.3.
Now looking at these numbers, should
traders be concerned? Well let’s weigh all the factors: The index dropped while
expectations increased. According to research conducted by Bank Credit Analyst, expectations have led the
index in the past. With
that said, we should see some increase in spending due to some of the monetary
stimulus that we have had that has not taken its full effect on the economy.
Once this happens, the confidence index should start to rise, thus a potential for
the recovery in the economy.
A word of caution is warranted as the
recovery here and abroad cannot be fueled just by the U.S. alone. In order for
this recovery to be fruitful, as I said before, we will need corrective action
by both our European and Japanese brethren.
Breadth for the day was negative with
NYSE advancers falling behind decliners 1195 to 1910. Nasdaq decliners led
advancers 1996 to 1132.
The CBOE Volatility Index
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rose 7.0% while the Nasdaq 100 Volatility Index
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The broader markets ended lower for
the session. The Nasdaq Composite lost 2.4% and the Dow Jones Industrials fell
1.5%.
Sectors in the green were scarce with
the Transportation Index
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appears to be a V-shaped top with handle.
Lagging were the Interactive Week
Internet Index
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The Gold and Silver Index
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lost 0.9% as it breached its pivot points of a W-shaped bottom.
And the GSTI Internet Index
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fell 3.5%, while the Semiconductor Index
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Individual stocks gaining in the
session were Taiwan Semiconductor
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TSM |
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it still viewed a turnaround in the second half for the company indicating that
a bottom was near.
Extended Stay America
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8.8%.
Lucent Technologies
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LU |
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higher 3.6% after the company said it would shut down Israel’s Chromatis.
MIM Corp
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MIMS |
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16.0% after Southwest Securities initiated coverage on the healthcare company.
And Doral Financial
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climbed 9.7% after it was upgraded by UBS Warburg from Buy to Strong Buy.
Dycom Industries
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news that Wachovia Securities downgraded the company.
Ulticom
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after reporting Q2 earnings in line with analysts’ expectations, but was downgraded by Dain Rauscher Wessels from Buy to Neutral.
And HPL Technologies
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hammered, losing 19.0% on news that Dain Rauscher, Sound View Technology and UBS
Warburg initiated coverage on the company.