Reply #47: 1:38, heading into that "magical" hour. Bonds get a lift [View All]

[54anickel]

Dow 11,369.30 -36.90 (-0.32%)
Nasdaq 2,167.32 -0.52 (-0.02%)
S&P 500 1,297.67 -2.59 (-0.20%)
10-yr Bond 4.787 -0.014 (-0.29%)
30-yr Bond 4.933 -0.019 (-0.38%)
NYSE Volume 1,363,822,000
Nasdaq Volume 1,166,091,000

1:30 pm : Market settles into a relatively tight trading range but selling remains widespread across most areas. Despite oil prices recently hitting fresh session lows below $67 a barrel, mixed August traffic results have left Airlines (-3.1%) as today's worst performing industry group. Gold (-3.0%) is a close second following an analyst downgrade on Newmont Mining (NEM 49.34 -1.57) while Internet Retail (-2.6%) and Fertilizers (-1.6%) -- two of last month's top ten performing S&P industry groups, are also among today's worst performers. DJ30 -48.11 NASDAQ -4.78 SP500 -4.35 NASDAQ Dec/Adv/Vol 1712/1146/1.14 bln NYSE Dec/Adv/Vol 2151/979/844 mln

1:00 pm : Recent recovery efforts are short-lived as the indices pull back from their best levels of the day. The loss of leadership from the Technology and Energy sectors, which have inched back below the flat line, are largely to blame for the market's inability to find support at improved levels. DJ30 -48.67 NASDAQ -5.44 SOX +0.2% SP500 -4.71 NASDAQ Dec/Adv/Vol 1658/1175/1.07 bln NYSE Dec/Adv/Vol 2095/1025/780 mln

12:30 pm : Major averages continue to sport modest losses as the afternoon session gets underway. However, the renewed wave of buying interest throughout the semiconductor space has been responsible for inching the Tech sector into positive territory and briefly lifting the Nasdaq into the green for the first time since Tuesday. Energy also turning the corner has helped the blue chip indices pare more of their losses while rebounds in retail and homebuilding have helped Consumer Discretionary also regain some upside leadership. The AMEX Housing Sector Index has erased a 2.5% pullback and turned positive due largely to a Q3 earnings surprise from Hovnanian Enterprises (HOV 26.70 +1.23). DJ30 -41.52 NASDAQ -1.20 SOX +0.9% SP500 -3.61 NASDAQ Dec/Adv/Vol 1521/1283/984 mln NYSE Dec/Adv/Vol 1962/1129/714 mln

12:00 pm : Market continues to languish in negative territory midday as a sense that stocks are overbought on a short-term basis invites another day of profit-taking.

With seasonally weak September being the final month of the quarter and thus typically accompanied by companies that are likely to miss Wall Street forecasts, profit warnings from KB Home (KBH 39.91 -0.48) and Beazer Homes (BZH 37.43 -0.94) have added to the market's angst about the pace of economic activity, especially in the cooling housing market.

While one could argue that concerns of a slowing economy are to blame for today's negative disposition, the more likely possibility, since ongoing evidence of an economic slowdown didn't seem to stall the huge run-up in stocks last month that lifted the blue chip averages to their best August performances in six years, is that the market is merely taking a breather after such an impressive and surprising rally during what is historically one of the worst months of the year for stocks.

The absence of sector leadership across the board has been most prevalent in Materials (-1.3%) but a 0.7% decline in the most influential of them all -- Financials, despite a turnaround in the bond market pushing yields to session lows, is having the biggest impact on the market, as evidenced by the Dow and S&P 500 now outpacing the Nasdaq to the downside.

The tech-heavy Composite, which was down as much as 0.9% earlier, has pared almost all of its losses and is close to turning positive following a turnaround in chip stocks. Semiconductors were weak all morning after lowered sales expectations from ATI Technologies (ATYT 21.38 -0.02) weighed heavily on its acquirer Advanced Micro Devices (AMD 24.67 +0.14). However, the latter recently inching into the green, coupled with solid performances from bellwether Apple Computer (AAPL 72.51 +2.48) and a four-year high on Oracle (ORCL 15.96 +0.34), continue to ease some of the concerns about valuations since there has been no real change in fundamentals to justify the market's recent sell-off. DJ30 -47.31 NASDAQ -2.12 SOX +0.3% SP500 -4.32 NASDAQ Dec/Adv/Vol 1694/1065/842 mln NYSE Dec/Adv/Vol 2165/897/616 mln

11:30 am : Not much has changed since the last update, at least for the blue chip averages. The Nasdaq, however, has more than halved its early losses, benefiting from a turnaround in Treasuries (i.e. the 10-yr note is now up 3 ticks, pushing the yield to 4.78% which improves the borrowing power of growth stocks) and strength from some influential tech leaders. Apple Computer (AAPL 71.75 +1.72) is surging 2.5% after UBS raised its price target to $92 from $80 while Oracle (ORCL 16.00 +0.38) breaking out to a more than four-year high has helped the tech-heavy Nasdaq improve its stance. DJ30 -63.12 NASDAQ -7.81 SP500 -6.31 NASDAQ Dec/Adv/Vol 1753/977/720 mln NYSE Dec/Adv/Vol 2177/841/532 mln

11:00 am : Major averages continue to languish near morning lows, failing to take advantage of a spike lower in oil prices. Within the last 30 minutes, crude oil futures slipped as low as $67.06 a barrel (-0.6%), a level not seen since the first week of April, following an unexpected build in gasoline supplies and a larger than anticipated build in distillates. While oil's decline bodes well for consumers, the absence of leadership in the Energy sector -- the biggest profit engine for the S&P 500 over the last several quarters -- has only added to uncertainty about earnings prospects amid continued signs of an economic slowdown. DJ30 -60.36 NASDAQ -11.62 SP500 -6.33 XOI -1.0% NASDAQ Dec/Adv/Vol 1851/806/572 mln NYSE Dec/Adv/Vol 2166/765/420 mln