Financial stocks took a broadside yesterday that not only drove
down the sector, but also caused the Dow Jones Industrial Average (
) to close under 10,000 for the first time since Nov. 4.
Bank of America (
), off 3.5%, with the biggest price decline in the Dow, and the
other Dow financial stocks, were the prime cause of the
Financials also make up a significant portion of Nasdaq (
), and it, too, had big losses. The S&P 500 also fell as a
result of heavy selling in the financials, but all of its other
sectors were lower, as well.
American Express (
) fell 2.8%, Travelers (
) fell 2.5 %, and JPMorgan Chase (
) fell 1.6%.
But there were a few winners yesterday: Rubbermaid (
) rose 1.7% after Morgan Stanley (
) raised its rating on the stock. And Home Depot (
) jumped 2.2% for the same reason. Hasbro (
) popped 12.7% after the toy company reported a big earnings
increase, and CVS Caremark (
) jumped 5.3% following news of an 11% increase in net profit.
The U.S. dollar weakened versus both the euro and the yen.
At the close, the Dow was off 104 points at 9,908, the S&P
500 was even at 1,066, and the Nasdaq got hammered for more than 15
points at 2,126.
The NYSE traded just over 1 billion shares with advancers
trailing decliners by a ratio of 8-to-5. The Nasdaq traded 643
million shares with decliners ahead by 9-to-5.
March crude oil rose 70 cents to $71.89 a barrel, and the Energy
Select Sector SPDR (
) fell 50 cents to $53.74.
April gold rose $13.40 to $1,066 an ounce. The PHLX Gold/Silver
Sector Index (
) fell $4.91 to $149.34.
What the Markets Are Saying
Friday's set of reversals were not only dramatic, coming on high
volume and late in the day, but they temporarily averted an
intermediate breakdown of each of the major indices. But
yesterday's triple-digit Dow loss places investors back on the
defensive, putting the indices very close to some major technical
The current outlook depends on the ability of the indices to
hold above Friday's intraday reversal lows. A failure to hold above
Friday's reversal low at S&P 1,041 could trigger a quick test
of the bottom of the current range, which is 1,020. And just before
the bottom of the range is the 200-day moving average at 1,022,
which, if decisively penetrated, could change the long-term
Applying those ranges to the Dow and Nasdaq gives us the
following support numbers:
Friday's low 9,823; bottom of current range is 9,380; 200-day
moving average is at 9,491.
Friday's low 2,100; bottom of current range is 2,015; 200-day
moving average is at 2,022.
As an astute trader and investor, you should know the importance
of these support numbers, and at each stage have an investment plan
that includes stocks that you want to buy at prices you are willing
to pay and stop-loss points that will automatically protect you
against unacceptable losses.
Planning today may not only avoid tomorrow's disaster, but
provide structure and discipline with a procedure that could reap
untold future rewards.
Today's Trading Landscape
Earnings to be reported before the opening
Aecom, AGCO, Agrium, Allied Healthcare, Allot Comms, Alpha Natural
Resources, American Commercial Lines, Astronics, Biogen Idec, BJ
Services, Cameron, Cedar Fair, Celanese, Centene, Church &
Dwight, Coca-Cola, Cognizant Technology Solutions, Coventry Health
Care, Cubic, Cynosure, Double Hull Tankers, Energy Conversion
Devices, Gartner, Gaylord Entertainment, InterActive, International
Flavors and Fragrances, KVH Industries, LCA- Vision, Martin
Marietta, Molson Coors Brewing, New Frontier Media, NYSE Euronext,
Overstock.com, Potlatch, Pulte Homes, RTI Biologics, Rubicon
Technology, Temple-Inland, Triple-S Management, Vishay
Intertechnology, Warner Music Group and Zebra Technologies.
Earnings to be reported after the close:
Aftermarket Tech, AGA Medical, American Financial, American Science
& Engineering, Aspen Insurance, Baidu.com, Bob Evans,
CareFusion, Cerner, Corporate Executive Board, Corrections Corp.,
Diodes, Dionex, Drugstore.com, EOG Resources, Gildan Activewear,
Globecomm Systems, Healthcare Services Group, HNI Corp., Insulet,
Kforce.com, Learning Tree, Lions Gate Entertainment, Maxygen,
Netgear, OpenTable, Peet's Coffee, Prospect Energy, Quality
Distribution, RenaissanceRe, rue21, Rush Enterprises, Safe Bulkers,
Taubman Centers, Team Health Holdings, UDR, Ultimate Software,
Usana, Walt Disney, Web.com and XL Capital.
Economic reports due:
ICSC-Goldman Sachs store sales, Redbook and wholesale trade.
Late quarterly earnings news (earnings vs.
- Centene (
): 53 cents vs. 52 cents
- Cognizant Tech (
): 47 cents vs. 46 cents
- Coventry Health Care (
): 74 cents vs. 56 cents
- NYSE Euronext (
): 58 cents vs. 48 cents
- Rubicon Tech (
): 4 cents vs. 5 cents
- Warner Music (
) 11 cents vs. 14 cents
- Zebra Tech (
) 33 cents vs. 26 cents
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