Buzz Bits: Dow Hits Record, Nasdaq Lags
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Earnings Report - MV News
- Kraft (KFT) reports 1Q EPS of $0.44 vs. $0.42 cons on revs of $8.6 bln vs. $8.39 bln cons.
- eBay (EBAY) reports 1Q EPS of $0.33 vs. $0.30 on revs of $1.77 bln vs. $1.72 bln cons.
Answers I Really Wanna Know... - Todd Harrison - 3:33 PM
- Will the tape be "OK" until the dollar starts to rally?
- And then, will all bets be off, both figuratively and literally?
- Did the traction in the financials light a match under the homies (+2%)?
- Is the HGX now rallying back to the right shoulder of defined dandruff?
- Will y'all (note the "y'all" spelling) be tuning in tomorrow morning as we unveil our mighty fine new professor?
- Where, oh where, will MIM4 be?
- Doesn't this bode well for 30 second tape delays?
- Isn't it a little scary how dependent we are on technology?
- Is it simply a matter of time before terrorists recognize this fact?
- Why do most families only get together for weddings and funerals?
- Are you keeping tabs on those frisky financial levels?
- Have you seen Hoofy and Boo's take on GM and are you ready for their fresh vibes tomorrow?
- Corduroy with pearls? Are you mad?
Mini-Minyan Mailbag - Kevin Depew - 1:41 PM
Your discussion of Dow components today in Five Things reminds me of my favorite investment stumper question, which also goes to the issue of what a stupid index the Dow Jones Industrial Average is...
A Dow stock [say IBM] goes up 10% one day while every other stock is unchanged.
The next day the same stock is down 9.0909% [inverse of 10% gain] while the other 29 are unchanged again. Yet the Dow is 40 points HIGHER after the two days of trading. How is that possible?
The explicit answer is simply that the stock split overnight...
By the way, I have noticed over the past few years that on the radio when giving market updates during the day, many [if not most] announcers now give NASDAQ first! (The Dow is usually second, S&P 500 third.) There is something to be drawn from this, but don't ask me what!
Yes, great point. Price-weighting a financial index - which as you know is how the Dow is constructed - is what you would get if you dumped a bunch of stocks in the lap of a marketing firm and asked, "What's the best way to assemble these stocks into an index so that you can sell it to people?"
After numerous focus groups and test marketing experiments, they would come back to you and say, "We think you should price weight it. It tests better."
All Business is Personal - Jeff Macke - 11:21 AM
I've said it before, I'll say it again and I live it everyday: All business is Personal. I've never met a business person worth a damn who thought otherwise.
Which brings us to Yahoo (YHOO), down Big and taking my freshly ripped-off face right there with it. Yahoo had a chance to regain its credibility last night. It had pre-peppered the market with good comments about its new Panama efforts. Yahoo was (and still is) positioned in the shadows of Google (GOOG); allowing it to grow without Google's headache of having everyone from the DOJ to Viacom (VIA) and Microsoft (MSFT) suing it. Yahoo was one decent report from becoming the internet version of Target (TGT), working under the umbrella of a widely loathed 800-LB gorilla.
Instead, Yahoo missed by a penny and seemed to refute it's three-week old assertion that Panama was operating ahead of expectations. Instead of Target, it looks more like any of a number of companies from Yahoo's own past. Companies like Excite, AtHome and Lycos; road-kill all because they couldn't deal with a changing landscape.
Is Yahoo going to die? Probably not but it's dead to me. Whatever happens, the company will be operating without the support of the analyst community. Those guys, like me, tend to take disappointment personally.
Financials Catch a Bid - Jess Thompson - 11:11 AM
Financial stocks (XLF) have rallied nicely from a strategic buying zone (see point A on the chart here) -- catching Wall St. by surprise. My firm monitors these price zones where value buyers often absorb the offers of bears selling on momentum breakdowns.
My firm turned bullish on XLF on March 28 (see point D on the chart here) suggesting to clients that it should be accumulated below 35.50.
While XLF continued to congest for a spell, underlying bids stacked above the 35 handle absorbed bouts of selling.
At a 37 print or higher (at point B on the second chart) my firm favors taking partial profits and reducing long exposure down to core longs.
Position in XLF
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