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Market Recap: Flat Hump Day


GSE's sparked a rally but Bernanke reminded investors of recession.

Major indexes finished flat. The Dow Industrials closed +9 points, or +0.07% to 12,694, the S&P 500 fell -1.27 points, or -0.09% to 1,380, and the Nasdaq Composite added +8 points, or +0.37% to 2,353.

Today was another flip flop day in the markets. Stocks took a dip with this morning's durable goods data. The Commerce Department said orders for durable goods dropped -5.3% last month greater than the -4.0% decline economists were expecting. Further sales of new homes failed to provide any upside catalyst with sales of new homes slipping to a seasonally adjusted 588,000. Economists had expected 600,000. For context see Toddo's article Blackhawk Ben: Helicopters Hit The Hill.

An upside rally came minutes later though when the Office of Federal Housing Enterprise Oversight (OFHEO) said that it would remove limits on the mortgage portfolios of the government sponsored entities Fannie Mae (FNM) and Freddie Mac (FRE). The S&P rallied nearly 13 points off its lows. See Professor Prieur du Plessis' column Is Now Time To Buy?

But recessionary fears seemed to sink in throughout the rest of the day as Fed Chairman Ben Bernanke gave a scheduled testimony to the House Financial Services Committee in Washington. Among his comments, Bernanke hinted that the Fed would be willing to lower rates and do what was necessary to "act in a timely manner" needed to "support growth and provide adequate insurance against downside risks." "Translation: they'll hyperinflate as long [they] can," Toddo said on the Buzz. "He sees inflation slowing as energy costs flatten (It's finally happened, he's contradicted himself in the same statement!)" For more read today's Random Thoughts.

In other news, retail stocks were under pressure after Costco (COST) was downgraded by Goldman Sachs. The firm cut its rating from "buy" to "neutral" citing a slowdown in consumer spending. COST finished -3.28% to $64.28. Other notables included Kroger (KR) dropping -1.85% to $25.46, Gap (GPS) -2% to $19.87, and Walgreen (WAG) -0.90% to $37.41. The broader retail ETF (RTH) fell -0.68% to $94.16. See Professor Kevin Depew's Five Things You Need To Know.

In commodities crude oil fell -1.31 to 99.57. Gold continued to move higher adding +12.10 to 958.20. Silver gained +0.525 to 19.245 and copper finished +5.90 to 384.00.

The dollar index fell -0.541 to 74.22.

Check out Professor Lance Lewis' column Bright Future For Gold.

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: INTC, AAPL, GOOG, ITRI, FNM, AMAT, AAPL, SMH

Some bearish trade or investment ideas: DELL, MBI, AEM

Catch you on the flip side! Goodnight!
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No positions in stocks mentioned.

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