Green Span of Attention
Happy B-day AP!
"A man walks down the street
He says why am I short of attention
Got a short little span of attention
And, whoa, my nights are so long"
Good morning. With Greenie's testimony in the rearview, the markets decided yesterday that earnings do in fact matter again. It was seemingly a spell of A.D.D., as trader's put aside the rate debate and stocks got a boost on the heels of strong earnings from Caterpillar (CAT:NYSE), eBay (EBAY:NASD), Qualcomm (QCOM:NASD), Altera (ALTR:NASD), Beazer Homes (BZH:NYSE), and Boeing (BA:NYSE).
After a lower open fueled by the weak KLA Tencor (KLAC:NASD) order guidance, the markets reversed and upon edging thru resistance at 1123 S&P and 1450 NDX, many traders, who had set-up cautiously given the tenor going into the day, scurried to cover. From there, program trading kicked in and squeezed the market higher in the face of many skeptical, unprepared participants. The homies (BZH) (+3.6%), internets (eBAY) (+3.89%), oil (+3.2%), cyclicals (+3%) and transports (+1.8%) (FedEx) paved the way to the upside.
Perhaps most notable within the move were the volume flows, which ran strong at 1.8 bln shares on the Big Board and 2.16 bln on the Nasdaq. Breadth was minty, with 2459 advancers to 850 decliners on the NYSE and 2061 advancers to 1128 decliners on the Nasdaq. The participation of the financials, healthy internals and robust volume all added credence to the bullish case. Still there are looming issues on the global economic / geopolitical front (China, North vs. South Korea, Iraq) and the stakes increase as we edge closer to election time.
The earnings parade winds down for the week, with mercifully only a handful of names left to report. Beeks drops by with the durable goods orders for March at 8:30 am (0.7% exp). Merrill (MER:NYSE) has their annual shareholder meeting. We could get some economic policy chatter from the Fed's Broaddus, Ferguson, or the ECB's Trichet as they are slated to speak at various events - we'll keep an eye on the wires...
The critical question today is whether Hoofy is back in the driver's seat and the bulls can push the upside or if traders, after the large gains, will pare exposure going into the weekend. After the bell last night, we got good vibrations from Microsoft (MSFT:NASD), Corning (GLW:NYSE), Gilead (GILD:NASD), Yellow (YELL:NYSE), and Amgen (AMGN:NASD). We'll see how the minx digests the numbers but as we power up, the outlook looks pretty good on the back of MSFT. One thing is certain - these are choppy times with numerous cross currents - so position accordingly and mind your risk.
As always, we'll scan the action and highlight the relevant info as it all unfolds. With Toddo out in Bean town this morning and a Minyanfest this eve, we're admittedly doing some juggling. We'll certainly make every effort to keep you up to speed. Good luck.
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