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Minyanville's Market Recap: A Day of Divergence; Stocks End Mixed

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It was a day of negative news and positive reactions. Stocks ended the day flat.

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Stocks were mixed today following yesterday's impressive rally. The Dow Industrials lost -0.29% to finish at 14,047 and the S&P 500 edged slightly lower by -0.03% to finish at 1,546. The Nasdaq Composite diverged; however, adding +0.22% to close at 2,747.

Divergence seemed to be the theme of the day. Financials, which had been trading in tandem with the major indexes, gained on the day. The Philadelphia KBW Bank Index (KBX) added +0.50%. Goldman Sachs (GS) gained +2.26% not far off its 52 week high. Other notables include Morgan Stanley (MS) adding +3.27% and Bear Stearns (BSC) adding +2.45%. Click on Minyan Peter's new article, A Look Inside Citigroup's Writedowns, as he may provide more insight into the sector.

In economic data, pending home sales came in less than expected at -6.5% versus consensus figures of -2.1%. The prior figure was revised upwards, however, to -10.7% from -12.2%. Again the divergence theme, homebuilders reacted well to the data with the Philadelphia Housing Sector (HGX) index adding almost 3%. Individual stocks surged with Meritage Homes (MTH) leading the way with a +10% gain, Ryland Group (RYL) with a +8.3% gain, and Toll Brothers (TOL) adding +7.6%. Toddo wondered which story the markets were trying to tell with the action out of the commodity-based stocks and into financials and homebuilders. Get his views in his daily Random Thoughts. In addition, get Professor Depew's thoughts on the data in his daily column Five Things You Need To Know.

September Auto sales in the U.S. were announced as well. Ford Motor (F) saw a 21% drop in sales with General Motors (GM) showing sales were flat. Again, Ford and GM shares gained +4.13% and +2.77% respectively.

The iShares China 25 Index ETF (FXI) was a frequented topic at the 'ville. The debate began with Minyan Peter's Buzz comparing commodity-based equity play Freeport McMoRan (FCX) and the FXI. Toddo noted that the ETF had gained +73% from the August low. The talk proved to be actionable as Professor Cooper and Professor Udall both contemplated testing FXI on the short side.

The action in commodities was also another hot topic on the Buzz. Crude prices gained +$0.05 to $80.29 a barrel. Gold futures fell sharply losing -$15.90 to finish at $738.20. Professor Limantour reaffirmed her long term bullish position in energy and metals, but noted "Markets correct and couple with an oversold dollar we could correct 10% without it being meaningful in the big picture." Toddo also wondered on the Buzz whether the action told the story of a healthy rotation out of commodity-based stocks into the financials. For more in-depth summaries of what happened on Minyanville's Buzz & Banter, click here for our 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: SMH, ANDE, HGX, BA, CIEN, OPTM, X, WWW, RIMM, BRCM, QMAR, PHM, FNSR, FRX, JDSU, BBOX, INTC, MAT, KBH, JDSU, SPG, SKS, SNE, TXN, HAS, JAKK, BZH, INFN

Some bearish trade or investment ideas: Crude Oil, PALM, FXI, DXY, CRY, WAG, WYNN, NUE

Tomorrow's already Wednesday! Here's a preview of what to expect for the trading session. Click here for the full trading radar.

Economics


10:00 ISM Services: 55.0 cons.
10:30 Crude Inventories: 1842 k prior

The week is flying by! Make sure you keep checking in with us as Hoofy & Boo have got another special video waiting for you. Be safe and have a great night!
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.

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