Earnings season is really starting to kick into gear and we have
seen a shift in reactions from early euphoria to disappointment
surrounding key companies.
Bank of America (
BAC
) , General Electric (
GE
) , and Mattel (
MAT
) were examples of companies that Wall Street is pushed the sell
button on today. We have Mattel (
MAT
) on our recommended list, so we of course will be looking deeper
at the company's news to see if it warrants a downgrade.
Getting back to the "lower highs" mention in our title today,
there are quite a few stocks which, despite the gains the last few
weeks, are actually trading lower than where they were 3-6 months
earlier. From a technical standpoint alone, this is a concern.
Stocks making lower highs tend to continue the pattern over time
and we do look at this when we are evaluating turns in the market
as well as economy. This is the problem with the short-term focus
represented all over business television and other media. Good news
from BP plc (
BP
) capping the oil leak yesterday suddenly brought the bullish case
breakdown on the company. Yet no one mentioned the stock went from
$62 to $26 and was back to only $37. BP has also suspended their
dividend payouts for the rest of the year, and there is talk of
various asset sales. The case to be made would be how the company
will look if key assets get sold. Trust me the vultures out there
are not looking to swoop in and pick off the underperforming parts
of the company. The key is not to be sidetracked by what can only
be a 1-day spectacle. When you are thinking of investing, the
timeframe needs to extend out far beyond the current day of
trading.
As for today's selling, financials led the way with Mastercard (
MA
) and Visa (
V
) pushing lower. Goldman Sachs (
GS
) was up on news it had reached an agreement with the SEC to settle
alleged fraud charges. CME Group (
CME
) really broke down during the session and is a name we downgraded
from our "recommended" list a while back. Volume picked up on the
NYSE, with 5.3 Billion shares traded by the close.
Looking ahead to next week, we will be hit with a deluge of
earnings from the likes of IBM Corp (
IBM
) , Pepsico (
PEP
) , Microsoft (
MSFT
) , Texas Instruments (
TXN
) , and Coca-Cola (
KO
) just to name a few. Be sure to catch our latest watchlist updates
on Dividend.com Premium this weekend!
Be sure to visit our complete recommended list of the
Best Dividend Stocks
, as well as a detailed explanation of
our ratings system here
.