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Market Recap: Stubborn Markets End Flat

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Markets failed to significantly respond to positive economic data. Stocks end flat.

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The markets were flat in Thursday's session. The Dow Industrials edged higher by +12.76 points, or +0.10% to 13056, the S&P 500 finished unchanged at 1447, and the Nasdaq Composite fell -7 points, or -0.27% to 2602.

"It is quite clear that trust levels are low and judging by the reversals nervous money is selling just about every chance it gets," said Professor Quint Tatro. "Interestingly enough, however, once the weak holders sell, winning stocks are dusting themselves off and marching on without them."


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Stocks failed to hold onto any gains despite positive signs in economic data. The private sector, as reported by ADP Employer Services, added 40,000 jobs in the month of December above expectations of 33,000. Weekly initial claims also came in less than expected at 336,000 vs. 345,000 cons, and the Commerce Department reported factory orders rose by 1.5% in November vs. +0.5% consensus. Even news of the asset-backed commercial paper growing for the first time since August failed to assuage investor concern. Most evident was the performance by the financials. Goldman Sachs (GS) fell -1.33%, JP Morgan Chase (JPM) fell -0.69%, Lehman Brothers (LEH) fell -1.91%, and Bear Stearns (BSC) fell -1.72%. The Philadelphia Bank Index (BKX) continued to slide closing -0.30%. For an overview, read Professor Depew's Five Themes You Need To Know For 2008.

Yet, one of the bright spots in today's trading was Monsanto (MON). The company beat analyst expectations by $0.11 cents, reporting quarterly earnings per share of $0.46 on revenues of $2.099 bln vs. $1.868 bln. Shares of Monsanto reached a new high of $123 before setting in at $120.92.

"2007 proved the demand side for food, not fuel, was real. I'd guess the '08 story is a violent collision of the two, not a bubble deflating," said Professor Krueger, "I'll stick by the fact we'll have (and have already seen) violent protests about running out of food in parts of the world before oil."

Crude oil held steady below the $100 dollar mark for much of the afternoon. Oil futures did receive a boost when the weekly petroleum inventory report showed a draw of 4056 k bbls but settled -0.49 to 99.16.

Gold futures continued to climb, although they were briefly in the red early in the session. "Any slight-slippage in gold looks like the usual pre-payroll hesitation to me. Gold shares are acting well though," said Gold Specialist Professor Lance Lewis. "They are continuing to play "catch-up" to the metal after their downside overshoot in December. XAU/Gold ratio is up 1% to 0.2167... as the ratio continues to recover from its nadir in December. I remain fully invested but, if I wasn't, I'd be buying." Gold futures finished +5.80 to 865.80. Silver added +0.215 to 15.382, and copper added +11.30 to 316.35. The dollar index finished -0.082 to 75.889.

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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: ITRI, RIMM, JASO, CF, MOS, GPS, ZEUS, EMC, ARAY, RIMM, AAPL, TOM2 NA, TSO, ALJ, SUGA LN, MON, FCSX, MDR, VMW, CROX, CMED, FMCN, FRE/FNM preferreds, gold

Some bearish trade or investment ideas: BA, SPX, CROX, GRMN, CLF, NEM, BBBY, SBUX

Thirsty Thursdays! Have a great night and we'll see you bright and early in the morning!

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No positions in stocks mentioned.

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