Will The BOJ’s Action Help Bolster The Markets?
Stocks opened higher Tuesday only to
fade at the noontime hour.
The Bank of Japan helped the markets
higher in the morning after the Bank cut interest rates. This move helped propel
the Nikkei higher for the session by almost 4%. Is this rate cut enough to fuel
the global markets higher? No, not really. What we would ideally like to see is
the yen weakening and recovery of the global economy. Until then we should sit
tight.
Also out before the trading session
opened was the Retail Sales number, which was better than expected. The increase
was a surprise to most until traders were able to dissect the numbers and come
up with conflicting views. In one camp, analysts felt that the sales increase
reflected stronger consumer buying and the rate cuts may be taking effect, while
others feel that the increase in the numbers could be explained by the discounts
consumers received due to the present economic environment.Â
Overall consumer spending should
remain strong assuming the employment outlook can stabilize.
Breadth for the day was positive as
NYSE advancers led decliners 1874 to 1227. The Nasdaq was just the opposite,
with decliners leading advancers 1587 to 1540.
The broader markets ended lower for
the day as the Dow Jones Industrials closed flat on a percentage basis and the
Nasdaq Composite shed 0.8%.
The CBOE Volatility Index
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$VIX.X |
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closed down 0.9%, with the Nasdaq 100 Volatility Index following suit, closing
lower 0.5%. There was no indication on what we should expect the bias to be for
the next session.
Sectors in the green were the Forest
Paper Index
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$FPP.X |
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PowerRating), which scaled higher 1.7%. The index is testing the
neckline of a high-level head-and-shoulders pattern.
The Retail Index
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higher on the Retail Sales number, as the index closed up 0.9%, once again above
its 50-day moving average.
Also in the green was the
Transportation Index
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$TRX.X |
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average three sessions ago. The index closed higher 0.4%.
The Oil Services Index
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closed up 1.6%.
Slipping in the session was the Gold
and Silver Index
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PowerRating), as it fell 1.3% but appears to have found
support at its 50-day moving average.
The semiconductor index
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$SOX.X |
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hit resistance at its 50-day average as the sector lost 1.5%.
Also losing ground was the Banking
Index
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PowerRating), as it closed off 0.4%.
The GSTI Internet Index
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$GIN.X |
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was lower by 2.2%, and the Interactive Week Internet Index
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$IIX.X |
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slipped 1.7%.Â
Looking at some individual gainers,
Mitchell Energy
(
MND |
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(
DVN |
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acquire the company for $3.1 billion in cash and stock.
Barnes and Noble
(
BKS |
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higher 12% after the bookstore giant posted July same-store sales that were up
0.7% from the same period one year ago.
Electronics Boutique
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ELBO |
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PowerRating)
climbed 9.9% after the company was upgraded to a Buy from Market Perform by Banc
of America Securities.
Footwear maker Skechers USA
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SKX |
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gained 10.3%.
Arch Coal
(
ACI |
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PowerRating) continued its trek
higher as it moved up 10.8% and is closing in on its 200-day average.
Losing ground in the session was
Professional Detailing
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PDII |
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PowerRating) which slipped 19.3% after posting earnings
for Q2 of 31 cents a share, beating estimates by 7 cents, but warned that it may
lose its marketing contract with Bayer.
Amarin
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AMRN |
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PowerRating) shares fell 9.5%.
Ebraer Empresa Brasileira De
Aeronautic
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ERJ |
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PowerRating) shares sold off 7.5%, as hope for a quick bailout package
for Argentina began to fade.
DQE
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DQE |
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PowerRating) closed lower 5.5% after
the utility company posted a Q2 loss of $2.18 and announced it expects to cut
its work force by approximately 5%.