Buzz Bits: Dow Tumbles, Nasdaq and S&P Both Edge Lower
Your Daily Buzz Highlights
Editor's Note: This is a small sample of the content available on the Buzz and Banter.
Earnings Report- MV News
American International Group (AIG) reports Q2 adjusted EPS of $1.58 vs. $1.39 cons on revs of $26.74 bln.
Cendant (CD) reports Q2 EPS of $0.24 vs. $0.35 cons on revs of $4.30 bln vs. $5.05 bln cons.
Viacom (VIA) reports Q2 EPS of $0.48 vs. $0.44 cons on revs of $2.85 bln vs. $2.53 bln cons. The company reaffirms f '06 continuing operations of $1.95-$2.00 ex- benefits.
Stealth Plans for Hardware- Sanjay Somaney- 1:47 PM
Wipro (WIT) is considering a second hardware manufacturing facility to meet strong demand it's seeing for PC's and Servers. The company already has a plant in Pondicherry which churns out about 1500 units/day and is operating at full capacity. WIT sells it hardware in India, Middle East and Asia. WIT's Infotech unit which includes the hardware division grew 35% in FY '06 over FY '05.
The Vail Trail- Toddo- 12:21 PM
Howdy Minyans! I just swung by MVHQ-Vail to check on the team and quickly weigh in. As we're readying to welcome our Circle of Trust (today) and 240 Minyans (tomorrow), time is quickly creeping by.
- The Fed held tight, as expected, and the initial pop quickly dropped. Sell the news? It's all over but the shouting? Read between the lines? Settle down Francis, with so many players gaming the same catalyst (during a slow holiday week), we shouldn't read too much into the near-term noise.
- I opined last week that, with everyone looking for the light at the end of the rate-hike tunnel, we should be wary of oncoming trains. When perception (all clear) and reality don't synch, we gotta stay on our toes.
- What would alter that view? Fresh acne in the BKX, perhaps, as their tendencies of out-performance continue (keep an eye on the 113ish level). Even so, with the trannies trading as punk as they are, I don't wanna defer to one complex as fail-safe tape tell.
- I've got a high noon 'View before turning my attention to my speech and the incoming COT (not necessarily in that order). I will try to swing back by the Buzz but, if not, thanks in advance for your understanding. I'll be back in the content saddle shortly.
Fare ye well.
Tone last parting Shot – John Succo- 11:54 AM
TICKS (taking offers on stocks) has hit +1000 six times today already. They even made it to 1300 once, a level I have never seen before.
I think I saw TICKS reach 1000 a few times in the 80's.
I am becoming more convinced by things like this that part of our government's approach to the economy and credit is to directly intervene into the markets. They understand that part of high liquidity is high asset prices.
If this is true it of course will fail eventually for markets are a force that ultimately cannot be controlled.
Trendspotting- Jason Roney – 9:52 AM
S&P futures have opened up 0.5% the day after FOMC 13 times. They have closed higher 12 of the 13. Futures close above the pit open 11 of 13 and trade lower just 7 of 13. However, worth noting, this hasn't happened since 2002.
Stupified – Laurie McGuirk - 8:54 AM
Gold and Silver were marking time ahead of the Fed announcement yesterday. But who gives a toss? The physical market will stop any selling in the low 620's and silver around 11.70.
I am amazed at how financial television reports on every minute detail that the Fed may or may not make, right down to showing the limousine service that delivered Helicopter Ben to the hallowed steps of the blah, blah, blah.
Burn me once, shame on you… – Rod David – 8:33 AM
Maybe buyers didn't think the same storm's lighting would strike twice in the same place. But after reversing all of Thursday's post-open rally and Friday's initial reaction to the Employment report, Tuesday's open gapped up optimistically ahead of the afternoon's FOMC news. S&Ps spiked up in reaction to the news, and then back down much more sharply.
It's just more of the same distribution that we've been documenting here for the past two weeks. And so far, it's just another failed surge that has yet to produce a close back under a prior low to signal that the trend has reversed down. None of the past weeks' straws has been the one to break the camel's back. Maybe this camel has super-human strength.
The pattern's bounce potential to ESu 1281'00 (equating to SPX 1277) was already met overnight. Confirmation that the bounce is extending higher is now being tested at ESu 1283'25. But MACD and RSI are diverging negatively, so the overnight strength could still prove to be a retest of the bounce's 1281'00 target.
Well for me let's see what has changed? Except the time zone in Vail? NADA?- Bennet Sedacca - 8:28 AM
Yep. Absolutely nothing. We believed the Fed wouldn't ease and most importantly, SHOULDN'T HAVE. Hooray for Boom Boom. We are enjoying our time in Vail before the festivities crank up but are sticking to our guns after today's non-event.
The damage, in my opinion, has already been done to the economy and in particular to the consumer. Our call? Still, the next move by the Fed will be a cut. And then, we'll see how the economy and the consumer react as their gas bills, heating bills, new ARM payments arrive - yes the Creep is HERE.
So, what are we doing outside of fly fishing the beautiful rivers outside of Vail? Nothing. Staying with Treasuries and large cap value. No beta for us until we see the Fed reverse course just not 'pause.' Sometimes the best thing to do, like now, is nothing. Hope to see many of you in Vail.
Sellers pushed all the right buttons Monday. They just didn't push hard enough. Friday's rejection of new highs had reversed down to close under multiple prior highs. Monday's open gapped down, rejecting Friday's last-hour bounce. S&Ps spent the entire session in negative territory, including a break to new session lows to start the session's last hour. Despite expressing so much pessimism (justified by Oil's spike on production concerns), sellers failed to extend Friday's post-open decline.
None of which amounts to a buy signal. And Monday's relatively low volume pace doesn't make the next trending attempt any more relevant. Currently, S&Ps are indicated to gap up above Monday's range - optimistic, yes, but not necessarily bullish, as gaps up don't improve the ability of momentum to gather steam. And similar to Thursday's post-open rally ahead of Friday's Employment report, the overnight price action seems a little too optimistic ahead of this afternoon's FOMC announcement.
Stiff resistance remains at last Wednesday and Thursday's prior relative highs in the SPX 1284 (ESu 1288'00) area. There is still potential to retest part or all of Friday morning's peak. But testing and then closing back under prior relative highs would just be another straw on the camel's back. The last straw would be a long-overdue close under prior lows.
What you need to know... - Jon Doctor J Najairian - 8:16 AM
FOMC Pauses, But For How Long? Recent history says not for long, but the fact that the Federal Reserve, after engineering the longest unbroken string of interest rate hikes in recent history, has finally hit the pause button will ultimately be taken as a good sign.
Cisco (CSCO) Sets Record Profit! The networking gear provider also plans a consumer advertising push aimed at getting average Internet users to recognize and even embrace the brand. Although regular Joes and Janes don't buy what Cisco sells it will certainly raise the brand awareness.
United (UAUA) Announces Fare War – The first major salvo has just been fired by UAUA, which slashed advance-purchase fares, typically purchased by vacation and other leisure travelers, for thousands of seats in the U.S. Yesterday other carriers, including AMR's American Airlines, Delta Air Lines and Continental Airlines matched the price cuts, though on a limited basis.
Apotex Begins shipping generic Plavix – Wow, this didn't take long! We cited the unusual activity in Sanofi (SNY) puts a week ago, after comments about generic Plavix, but holy cow, I didn't expect to see it this fast! The anticlotting agent is one of the world's best-selling drugs, and this is an embarrassing and expensive setback for the drug's brand-name marketers, SNY & Bristol-Meyers (BMY).
Stock to watch:
NetLogic Microsystems (NETL) Why?
Because the fables semiconductor player is rapid fire hitting our pre-market Heat Seeker for unusual institutional buying patterns.
I am buying shares up to $24.75 with a target of $28, but I will set a $.50 stop loss.
Positions in CSCO & NETL
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