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Market Recap: Was It The Plunge Protection Team?


Stocks rallied in the last hours of the trading day. Was it the Plunge Protection Team again?

The turnaround came a day late. The Dow Industrials added +146 points, or +1.16% to 12735, the S&P 500 added +18 points, or +1.36 to 1409, and the Nasdaq Composite finished up +34 points, or +1.39 to 2474.

Stocks were pressured for much of the day. Late in the day major indexes were at session lows. "Another day, another thrashing for the average stock," said Professor Depew, "New point and figure sell signals are leading new buy signals 72 to 8. Overall sell signals are leading by a massive margin, 194 to 15… that is what the high risk as shown in the bullish percent indices means."

But again, late-day buying rescued the markets, "What was once a conspiracy theory is now an accepted and acknowledged policy tool," said Toddo, "Never underestimate the motivation of a corner and caged animal." Read the full article, Plunge Protection Team Now Official.

Tech stocks reversed their declines. Notable players include Apple (AAPL) finishing over $10 above its lows of the day to settle +5.30% to $179.40. Research In Motion (RIMM) added +2.49% to $98.93, Google (GOOG) added +3.59% to $654.00, and Baidu (BIDU) gained over 20 points to edge into positive territory, up +0.42% to $344.10. Todd mentioned Baidu in today's Random Thoughts.

Financial stocks also rallied, overcoming news of MBIA (MBI) cutting its dividend. Furthermore, the company said it would sell $1 bln in debt in an effort to hold onto its AAA credit rating. The Philadelphia Bank Index (BKX) added +1.77% to finish at $82.02. Merrill Lynch (MER) was one of the leaders to the upside closing +4.80%, Morgan Stanley (MS) finished +3.47% to $47.73. Bear Stearns (BSC) added +5.13% to $74.82, and Goldman Sachs (GS) was the laggard finishing +1.19% to $191.15. For more on MBI, read Professor Depew's Five Things You Need To Know.

Homebuilders were mixed. The weekly MBA Mortgage applications reports showed an increase of 32.2% vs. -11.6% for the prior week. Toll Brothers (TOL) gained +2.93% to $16.51. Pulte Homes (PHM) added +1.39% to $8.78. Downside leaders included Meritage (MTH), -6.31% to $9.20, Beazer Homes (BZH), -4.95% to $4.99, and Hovnanian (HOV) down -5.70% to $4.80. The broader Philadelphia Housing Index (HGX) edged up slightly +0.23% to 122.47.

Buying in the commodities space took a rest today. Crude oil fell -1.60 to 95.75. Copper fell -0.90 to 326.45. Gold fell -1.60 to 878.70, but silver added +0.027 to 15.734. Check out Professor Lance Lewis' Minyan Mailbag: Bright Future For Gold Juniors.

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

Idea Flow

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: MTW, PG, ARAY

Some bearish trade or investment ideas: TSO, GOOG, AAPL, BKUNA, RIMM, SNY, NVS, RAI, DHI, KSWS, MDRX, SKS, HPC, AAPL, GS, YHOO, RJF, DE

Whew! Over the Hump! Good night!
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No positions in stocks mentioned.

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