Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Market Recap: Rally Caps Were On


Stocks recover from an ugly day.

Tuesday's trading session was marked by whipsaw action. The Dow Industrials finished -45 points, or -0.37% to 12,213, the S&P 500 fell -4.5 points, or -0.34% to 1,326, and the Nasdaq Composite edged up +1.68 points, or +0.07% to 2,260.

Stocks opened lower this morning with Intel (INTC) weighing on the minds of investors. The world's largest chipmaker said yesterday after the bell that 1Q profit forecast would be lower due to the recent drop in NAND flash memory. INTC said its gross profit margins would come in around 54% vs. prior expectations of 56%. The news prompted many brokerages to cut their earnings forecast for the company and the stock fell in pre-market trading. Yet not all were as concerned. "A happy, well-adjusted tape would have regarded it as a reasonable adjustment for a company earning greater than 50% margins," said Professor Jeff Macke. "This tape regards it as a chilling portent of doom. The truth, as always, lurks somewhere in the middle."

Toddo also was skeptical of the bear argument given that the negative news had such a minor effect on stock futures. "I want to be more bullish for a trade," Toddo said, "given the mad rush to cut estimates in the financials, the negative gross margin guidance by Intel and the general malaise that is omnipresent." Yet, stocks were weak for much of the day and it wasn't until a rally late in the session led by the big betas that helped stocks recover from session lows. Leaders included Apple (AAPL) +2.21% to $124.41. Research In Motion (RIMM) added +4% to $104.20. Biadu (BIDU) finished +2.29% to $246.01.

INTC fell -0.20% to $19.98. Another notable decliner was Google (GOOG) falling -2.89% to $443.80. Read today's Answers I Really Wanna Know.

The financial sector also recovered to close near the highs of the day. Toddo had been eyeing the big banks. "Note Goldman (GS) Morgan (MS), Merrill (MER)... They're trying to turn the tide and skin Boo's hide. I did, in the interest of full disclosure, fade (read: buy) some Morgan Stanley calls into the opening abyss. Pure trade and defined risk (below $40)." GS closed -0.90% to $163.60; MS finished -0.55% to $41.35; and MER settled +2.45% to $49.83. For more, read Toddo's Random Thoughts.

In other news, Fed Chairman Ben Bernanke was on the tape this morning urging lenders to forgive portions of mortgages held by homeowners at risk of defaulting. In a speech in Florida, Bernanke gave dire warnings on the housing sector saying the "situation calls for a vigorous response." The statements helped give a positive lift to the homies. Gainers include Toll Brothers (TOL) finishing +3.55% to $21.32. Ryland Group (RYL) added +2.9% to $27.81. Hovnanian (HOV) closed +8% to $9.11, and KB Homes (KBH) gained +3.5% to $22.83. For more analysis, read Professor Kevin Depew's Five Things You Need To Know.

Commodities fell sharply. Crude oil declined -2.49 to 99.91. Gold fell -20.20 to 964.00. Silver lost -0.428 to 19.645, and copper dropped -10.40 to 382.70.

The dollar index declined -0.039 to 73.662.

For more summaries, click on Minyanville's Buzz Bits.

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: AAPL, MS, BIDU, MF, CAT, CAT, RIMM, ICE, FCSX, GFIG, MA

Some bearish trade or investment ideas: GOOG, DBA, GLD, GS, (WFC, LEH, BSC, GS Preferred), C

"Topsy-Turvy!" says Minyanville Editor Andrew Jefferies. It was definitely an exhausting day. Have a great night and see ya in the morning!
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos