Stocks were strong for most of Tuesday, but by 2 p.m., it was
clear that without the support of positive economic or corporate
news, the market would go no further. So the last two hours were
spent taking back about 60 Dow points. At below the breakeven mark,
some buying emerged, and it was enough to close the leading
averages on the plus side.
Cisco Systems (
) announced a new router that is designed to improve the speed and
size of downloaded data, and that created some interest in several
telecommunications stocks. This positive news kept the Nasdaq (
) in the black, but by the close its big early gains had been
) gained 6.5%, and Verizon (
) rose 0.9%. And Apple (
) and Research In Motion (
) also benefitted from the Cisco announcement. (Find out which one
Trade of the Day
The financial sector was the subject of buying following a
report that the government is discussing plans to sell its 27%
stake in Citigroup (
). Citigroup jumped 7.3%, AIG (
) gained 12.6%, Fannie Mae (
) rose 5.9%, and Freddie Mac (
) gained 7.6%.
The U.S. dollar was weak versus the yen, but strong against the
At the close, the Dow Jones Industrial Average (
) gained 12 points to 10,564, the S&P 500 (
) rose 2 points to 1,140, and the Nasdaq gained 8 points to
Volume on the NYSE totaled 1.1 billion shares with advancers
ahead by 7-to-6. On the Nasdaq, 713 million shares changed hands,
and advancers led by 15-to-12.
April crude oil fell 38 cents to $81.49, and the Energy Select
Sector SPDR (
) closed unchanged at $58.06.
Gold for April delivery fell $1.70 to $1,122.30 an ounce, and
the PHLX Gold/Silver Sector Index (
) closed at 168.22, off almost a point.
What the Markets Are Saying
The Nasdaq rose modestly again yesterday, but even though it
lost its early gains, it ended with 14 points between its prior
high in January and the close. But yesterday's gain was again due
to news of a new telecommunications product and not
All of the indices' internal indicators are now grossly
overbought with stochastic and
Moving Average Convergence/Divergence (
numbers at levels not seen since early January. And the same can be
said of the sentiment indicators.
Now even the most ardent bulls are getting uneasy due to the
and commitment, and the obvious absence of new money in the mutual
But the long-term, intermediate-term and short-term trends are
all up, so any correction or reversal will likely just take the
indices back to their major support zones and not result in a
change in trend.
One of the leading sectors is the banks, and they face a major
technical resistance area at their January highs.
If both technology and financial stocks can break through the
January barriers, the rally could continue for several more days,
but, as noted yesterday,
the fuel tank (cash) is on low
, and the rally is near an end.
Today's Trading Landscape
Earnings to be reported before the opening
A.M. Castle, American Eagle, Bon-Ton Stores, Brown-Forman, Carrizo
Oil & Gas, Children's Place, Clayton Williams, Cumberland
Pharmaceuticals, Elbit Systems, EMS Technologies, Fushi
International Harbin Electric, Hawk Corp., QLT, ReneSola, Speedway
Motorsports, U.S. Concrete, and Vail Resorts.
Earnings to be reported after the close include:
Asset Acceptance Capital, Ballard Power, Clean Energy Fuels,
FuelCell Energy, Gymboree, Hill International, Hot Topic, I.D.
Systems, Inter Parfums, Jo-Ann Stores, Men's Wearhouse, Metabolix,
Orthovita, Providence Service Corp., Semtech, Standard Parking,
Techtarget and Western Gas Partners.
Economic reports due:
MBA purchase applications, wholesale trade, EIA petroleum status
report and Treasury budget (the consensus expects -$223
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