MV Weather Report: Tech Sector Gets Rained Out?
Rain or shine, we review the day's biggest stock stories.
One of the reasons for the choppiness was the action in the banking sector. Morgan Stanley (MS) reported numbers that disappointed investors and raised a lot of questions.
Here's a Buzz & Banter post from Mr. Practical on the company:
"Morgan Stanley reported this morning. The firm did basically the same thing Goldman Sachs (GS) did with losses. Because it switched to a December year-end from November - the result of becoming a "bank holding company" - the company "hid" approximately $9 billion of losses in between November and December.
"I guess the market believes that what is not reported is not real."
The market was strong for most of the session, but late in the day, the DJIA and S&P popped like a balloon, releasing the hot air that had artificially inflated them during the day. The financials -- Wells Fargo (WFC), Bank of America (BAC) and JPMorgan (JPM) -- led the push lower.
The obvious strength today was in technology, which is actually where the strength has been all year. I even instant-messaged a trading buddy today to ask him if it was 1999 again (Full disclosure: I wasn't even old enough for high school at the time).
A quick glance at the screens shows Apple (AAPL), Research in Motion (RIMM), Amazon (AMZN), VMWare (VMW) and eBay (EBAY) all making large percentage moves. These have been the leaders of this market.
However, the steam may be coming out of these winners, as many of them are reporting numbers tonight or tomorrow. VMWare is already out: The company reported EPS of $0.25 vs $0.20 First Call consensus; revenues were $470 million, versus estimates of $474.38 million. The market didn't like these numbers, sending the stock down to 28.60 in after-hours, closing at 32.55, down almost 4 points.
Will the other tech leaders get reactions like this? If so, the market may again test its 20 DMA sometime this week.
Tomorrow, traders will be watching for economic data before the bell at 8:30 a.m. There will also be a barrage of earnings. In the morning, we'll hear from Pepsi (PEP), Potash (POT), UPS (UPS), to name a few. During the afternoon session, we'll hear from Amazon, Amgen (AMGN), Baidu (BIDU), Microsoft (MSFT) and Netflix (NFLX).
For a full list of all the companies reporting earnings, check out the trading radar.
Have a good night, Minyans!
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