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Stocks Drop in a Mirror Opposite of Yesterday's Trading

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Today's financial recap and tomorrow's financial outlook.

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US equities opened weaker and continued to sell off throughout the day. This is important after Monday's deep sell-off saw an equally sharp bounce yesterday and it marks the biggest 3-day decline this year. Market internals were also very weak. NYSE breadth was sharply negative at over 5:1 declines vs advances. Down volume accounted for 93% of the day's volume, typically signifying a change-in-trend day. However, over the past three trading sessions, we have seen a 90% down day, a 90% up day, and a 90% down day today, so the picture is somewhat muddy.

Some sectors were notably weak today. Financials, which saw earnings reports from Bank of America (NYSE:BAC) and other major banks this week, were down 2% while Bank of America was down more than 6% at one point during the day, despite so-so earnings. Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) were also notable laggards after leading the rally higher yesterday. Apple fell 5.75% on reports that one of its main suppliers, Cirrus Logic (NASDAQ:CRUS), had a decline in its chip orders.

There was no major economic data in the US today besides the Fed's Beige Book. This survey of economic conditions in the 12 Fed districts didn't show any great changes. Overall, moderate retail sales and auto sales demand were the key headlines that led to moderate growth.

In global equities, the German DAX took a sudden 2% plunge at the open of European trading on chatter that the country's sovereign debt rating had been downgraded by a credit rating agency. The French CAC was down an equal amount on corresponding chatter that its sovereign credit rating was downgraded. Comments from a Chinese auditor that local Chinese governments have taken on too much debt through off balance sheet investment vehicles prompted concern that slowing China growth would negatively affect global economies.

Tomorrow's Financial Outlook

Tomorrow's economic data comes in the form of weekly initial jobless claims and the Philadelphia regional manufacturing survey. Weekly jobless claims are expected to be at 350,000, under the 4-week moving average of 358,000. The Philadelphia manufacturing survey is expected to increase modestly to 3.0 from March's 2.0.

Globally the economic calendar is light. The only notable reports are Chinese property prices and UK retail sales. During the past few months, the Chinese government has sought to rein in any property price increases by tightening monetary controls, so these results will be highly scrutinized.

Tomorrow will be the busiest days of the week for US earnings with 21 major companies reporting. Notable reports include Union Pacific (UNP), Pepsi (PEP), Morgan Stanley (MS), Verizon (VZ), Chipotle Mexican Grill (CMG), IBM (IBM), Microsoft (MSFT), and Google.

Twitter: @Minyanville

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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.

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