Gapping down
In reaction to disappointing earnings/guidance: FCEL -15.4%, WSM -7.0%, CWTR -6.3%, TIVO -5.8%, GA -5.7% (also downgraded to Hold at Roth)... M&A news: ALDN -3.5% (rejects Vector Capital's unsolicited proposal).
Select airlines ticking lower with crude higher: LCC -4.0% , UAUA -3.8% , CAL -3.0% , AMR -2.7% , DAL -1.2%... Select telecom stocks showing weakness: CHU -5.4% , CHL -5.0% (downgraded to Underweight at JPMorgan), NOK -1.3%... Other news: ACH -3.8% and TS -1.9% (checking for anything specific)... Analyst comments: GILD -2.0% (downgraded to Equal Weight at Lehman), KO -1.0% (downgraded to Neutral from Outperform at Credit Suisse).
SMF Floor Traders Midday Summary: Major averages just off session highs
Everyone gets there rocks off the shelf today as they set things up for the SMF Traders, as we have said in the past few weeks that you are going to get the chance of a life time to buy up the bottoms
The stock market is trading just below its session highs on very light volume. The major averages had a sluggish start as strong Durable Goods Orders (1.3% vs. 0.0% consensus; ex-trans: 0.7% vs. -0.7% consensus) offset a spike in oil prices. October crude oil ($117.59 +1.32) touched its session high of $119.63 around 9:15ET after the National Oceanic Atmospheric Association said that Tropical Storm Gustav is on track to hit Louisiana early Monday as a Category 4 hurricane.
Profit taking in the dollar also lent support to crude. But the major averages were able to rally over the first hour of today's session as investors awaited the weekly inventory statistics from the Dept. of Energy at 10:35ET. Crude showed a draw of 177K barrels compared to a build of 1.1 mln, though that bullish number was somewhat offset by a smaller than expected draw in gasoline (-1.179 mln vs. -2.45 mln consensus). While crude showed a muted reaction to the data, the major averages actually began coming in at that time.
Then just after 12:00ET, the major averages rallied to session highs, led by the financial sector. Dow Jones Industrial Average is currently +106 to ~11518; Nasdaq is currently +26 to ~2388; S&P 500 is currently +10 to ~1282... From a technical perspective, The major indices are all holding onto a majority of their substantial gains moving through midday. We are seeing a slight pullback, or countertrend move, typical price action after a morning surge. The Dow (INDU) tested daily resistance (R2) @ 11550 noted in today's technical take, topping out @ 11554. We would expect a retest this afternoon on the resumption of the trend. Market internals confirm the bullish price action as TRIN levels on both NASDAQ & NYSE remain well depressed below 1.0 indicating the absence of sellers. Advancers are outpacing decliners by a margin of nearly 3.5:1 on NYSE with sector strength most noticeable in homebuilders, coals, and financial issues... The Bond market trading modestly lower overnight before tanking at the open of pit trading as futures were indicating a higher open. The 10-yr is currently -03/32 3.787%... In Commodities, Oct crude ($117.59 +$1.32) continues to trend lower as traders seem to be focusing on Hurricane Gustav, and despite the move lower, the storm is still viewed as a potential threat to oil operations in the Gulf. What is typically more market moving for crude is the weekly inventory data, which showed a slight draw for crude (177K vs consensus build of 1100K) while gasoline showed a smaller than expected draw (1179K vs consensus draw of 2450k). This data, however, caused crude to react minimally... In Europe, mkts rose thanks to an oil-powered rally in British stocks and a surprise rise in U.S. durable goods data, which suggested that the world's largest economy may avoid recession. FTSE closed +1.1%; DAX closed -0.3%; CAC closed +0.1%... Note in Asia, the Nikkei closed -0.2%, the Hang Seng closed +1.9% and the Shanghai Composite closed -0.3%... On the Earnings calendar, 9 cos are confirmed to report today after the close. Tomorrow before the open, 19 cos are confirmed to report including ENER, VIP, FRED and SHLD... On the Economic calendar nothing remains on the schedule for today. Tomorrow, GDP-prelim, Chain Deflator-Prelim and Initial Claims data are scheduled to be released at 8:30ET.
SMF Traders: NASDAQ 100 (NDX) leaders & laggards heading into final hour of trading
NDX Final Hour Strength:
FMCN +6.5%, NTAP +6.0%, JOYG +4.2%, STLD +3.6%, SNDK +3.5%, LBTYA +3.5%, FWLT +3.2%, LEAP +3.0%, AKAM +2.8%
NDX Final Hour Weakness:
AMLN -25.6%, UAUA -11.2%, JAVA -6.6%, BIIB -2.1%, MRVL -1.5%, CELG -1.3%
SMF Traders Sentiment indicators -- Market volatility has moved lower with equities higher on a light volume trading day
Broad market volatility is lower with the stock market climbing higher for the second consecutive day (Dow +93, SPX +10 and Nas +26). Market volatility initially opened flat as the averages had a sluggish start with strong Durable Goods Orders offsetting a spike in oil prices. The "fear gauges" have moved lower off the open as the major averages have trended higher for most of the day. The VIX is currently -0.79 (-3.9%) at 19.70 while the more tech-focused VXN (Nasdaq Volatility Index) is -0.87 (-3.6%) at 23.16. The CBOE put/call ratio is currently at 0.78 (lowest level in almost 3 weeks), indicating higher call trading than put trading.