At one point today the bulls were on the ropes, and I mean Rocky in the 14th round against Apollo Creed on the ropes. The Dow was down 180 and falling like a stone. The S&P 500 was clinging to the 1080 level with desperation. The whole thing looked like it was about to crack wide open, and various charts don’t show much holding up the market below 1080. But the market did hold. Like Rocky, the bulls came back with powerful body blows, and sent their attacker back to his corner clutching his side. For now.
Alright, maybe that’s a bit over the top, but not by much. The market was on the verge of a major selloff this morning, and with the Dow still closing down 116, and the 10000 mark back on the radar, a big one may not be far off.
Which brings us to tomorrow’s main event: fourth-quarter gross domestic product. This is the one that’s going to give the V-shapers their bonafides, prove that the economy’s rocketing up and the recession is behind. According to a Dow Jones survey, it’s expected to come in at 4.8%. A good many people are speculating it could be even higher.
Forget for a second that the rise is going to come very largely from the internal math that determines how GDP is calculated, like the way inventories are handled. Falling inventories subtract from GDP, rising inventories add to it. So even without a strong inventory build, if they merely stop falling, they will add to GDP just by virtue of their not subtracting from it any more. Neat, huh?
But, to get back to our main point, what if GDP comes in merely in step with expectations, or, God forbid, even worse. The market, like I said, was on the verge of a major selloff late this morning, and remains vulnerable. What do you think traders will do if GDP doesn’t meet the lofty expectations set for it?
Even if you’ve had enough of me, certainly there’s always more to say about Apple, and who doesn’t love Lady Gaga? Really, I’m asking, because I can’t name a single thing she’s ever done.
Stocks slide in a volatile session, as the selloff that began two weeks ago continues apace.
DJIA drops 116 (1.1%) to 10120, falling as much as 181 early. S&P 500 loses 13 (1.2%) to 1085, Nasdaq Comp drops 42 (1.9%) to 2179. The indexes are poised for their worst month since the rally began. Selloff verged on a freefall late in the morning, with the S&P 500 falling as far as 1078. But the bears couldn’t punch through support that lies around 1080. That allowed the bulls to circle the wagons, and they almost pulled the thing back to the black before a final bout of selling toward the close.
Tech shares take the worst drubbing; Apple drops 4.1% on a bout of profit-taking. Ford posts its first annual profit since 2005. Durables rise, but not as much as expected. Bernanke, after all the agita, gets confirmed for a second term.
Somebody must have, because the only major American auto maker not to declare bankruptcy just posted its first annual profit since 2005. There are some other good signs amid the earnings reports, and this morning’s durable goods report.
But remember, we’re coming up from a very long, deep dive.
- So much for all the political drama surrounding Bernanke’s confirmation. Senate votes 70-30 to reappoint Bernanke for second four-year term as Fed chairman.
- Seamy AIG bailout details aren’t exactly flattering for the Fed. “No matter which way you look at it, the picture that is emerging of the Federal Reserve, as revealed by the ongoing probes into its AIG bailout, is singularly unflattering,” Yves Smith writes at naked capitalism.
- Is the decline in emergency claims a blip on the screen or start of a new trend? Next week should offer better clues. “Bottom line, the labor market data in terms of hiring is still very cloudy and the pace of firings has stopped getting better,” says Miller Tabak’s Peter Boockvar.
- Year-long downward trend in initial jobless claims seems to remain intact, but job growth doesn’t seem to be coming anytime soon. “The great question is whether we can generate net growth on a sustained basis,” James Picerno writes at The Capital Spectator. “We are knee-deep in the middle of this transition and early clues of how the shift is faring will come,” over the next few weeks.
- Still, the four-week moving average of initial jobless claims rose for the third consecutive week, a trend that will “drive both the Fed and the administration crazy if it lasts too much longer,” Mish says.
- With Google (GOOG) out of the picture, local review site Yelp turns to Elevation Partners for funding. “The Elevation bet means any public offering has likely been pushed back by a year or more,” MediaMemo blogger Peter Kafka says.
- Newsosaur blogger Alan Mutter rounds up a list of media pundits who are skeptical that Apple’s (AAPL) iPad can save the struggling print media.
- Kansas City Fed President Thomas Hoenig’s dissent yesterday doesn’t necessarily represent a huge shift in FOMC’s policy environment. “I find it inconceivable that the Fed would be keen on normalizing rate policy without a substantial decline in unemployment, absent of course an unexpected surge of inflation,” Tim Duy writes at Economist’s View.
- A frosty January for stocks and what some folks think it means looking forward.
US stocks remain down, although they’re sharply off the lows with only 30 minutes remaining in today’s session.
Hard to pinpoint exactly what’s driving today’s move. Technology leading the declines a day after Apple’s (AAPL) iPad announcement. Jobless claims and durable goods reports also came in below expectations. S&P 500 up held at support around 1080, so there’s that to consider as well.
But, as Tom Petruno points out, it just seems investors are finding more reasons lately to sell rather than motivation to buy. And issues overseas may be the biggest factors driving this recent slide. From LA Times’ Money & Co blog:
Europe may be the bigger worry at the moment. Stocks were broadly lower there today amid more signs of contagion from Greece’s financial woes. Investors continued to demand sharply higher yields on Greek government bonds, even though the country successfully borrowed more than $11 billion early this week via five-year notes to give itself more breathing room.
This is going to be one heck of a reclamation project.
One of the jobs of reporters is to report the news — well, I guess that’s their only job, really — and the first three letters of “news,” incidentally, spell “new,” which explains why we’re always looking for something new to report to you, the reader. That’s why today, every paper in the country, every wire service, quite a few online aggregators even (to the extent that there’s a human being there doing the aggregating,) will all be looking for a new reason to explain today’s drop in stock prices (should the decline stick through the closing bell.)
Profit taking on Apple? Check. Renewed “jitters”? Check. Disappointing earnings, disappointing data? Check, check. But the reality is this selloff started nearly two weeks ago, and the reasons for it will remain mainly the same until it’s over.
The selling began two Friday’s ago, if you recall, with that 100-point slide in the Dow. That slide was erased the next Tuesday, and indexes struck nominal fresh highs, which made everybody forget about Friday. But then on Wednesday the indexes slumped again, and we’ve been off to the races since.
On one level, this is all very simple. Stocks are up roughly 60% since March, a blistering, historical-level rally that must inevitably cool. A correction has to occur at some point, indeed it’s a necessary safety valve. Stocks are down about 6% since those highs last week, and it it drops another 4%, will represent the first “real” correction since March, a 10% reversal being the rule of thumb for defining a correction.
On another level, though, this selloff is about resetting expectations after year in which most folks were content to be told things were getting less bad. And that issue will remain no matter where indexes finish today.
US stocks taking it on the chin this afternoon, with technology sector getting slapped around the hardest – off more than 3%.
Worse-than-expected weekly jobless claims and durable goods reports this morning, as well as some disappointment surrounding Apple’s (AAPL) new tablet, weighing on stocks. But it also seems like this is just another pullback amid the larger correction the market has been experiencing throughout the last two weeks.
And the Dow Jones Industrial Average is slip-sliding away back toward the always important, from a psychological point at least, 10000 level.
It seems as if investors are largely ignoring many of the better-than-expected earnings reports recently, suggesting the bulls’ 10-month run may be running out of steam. Since the Dow’s close on Jan. 14, it has dropped about 625 points, or 5.9%.
DJIA and S&P 500 are both on pace to close lower for the third consecutive week. Each are set to record their longest weekly losing streaks since July 10. And if current trends hold true, January is turning out to be the worst month for stocks since February 2009.
From a technical perspective, keep an eye on 1085 as a closing level on S&P 500, FusionIQ CEO Barry Ritholtz says. “A close below this sets up another 5% leg down towards 1035 area,” he notes.
Dow industrials were recently off 151 at 10084; S&P 500 down 17 at 1080.
To say the blogosphere is buzzing about the iPad is certainly an understatement. It seems like everyone has something to say about Apple’s (AAPL) new device.
From your typicaltechblogs, to twitter, to even Paul Krugman, folks everywhere are weighing in on the new tablet. Some positive thoughts, fair amount of skepticism, but for the most part people seem excited to get their hands on the device and test it out.
And for Apple, this is all unfolding exactly according to plan. And if it seems like it’s a plan that’s been implemented before, well, it has. Seems like Apple’s got a blueprint for how they do this stuff, doesn’t it?
Phase one of a typical Apple product announcement is now complete as months of hype and speculation gave way to the iPad’s actual unveiling, David Pogue chronicles on his NYT blog.
Now phase two – blogger bashing and criticizing of the yet-to-be released product – is beginning and will continue over the next few months until the iPad actually goes on sale, he says.
“Then phase three will begin: positive reviews, people lining up to buy the thing, best-sellerdom, and the mysterious disappearance of the basher-bloggers,” Pogue notes.
So what’s the takeaway? IPad has vast potential, but “it’s too early to draw any conclusions,” he says. “And anyone who claims to know what will happen will wind up looking like a fool.” Continue reading…
Geared up for heavy flow of 4Q earnings reports this morning, including AT&T, P&G, 3M and Ford; Microsoft and Amazon report after the closing bell.
Premarket tone so far is slightly more firm, following some solid gains in Asia overnight and higher European markets. December durable goods, weekly jobless claims due at 8:30am; Kansas City Fed’s January manufacturing index set for 11:00am.
US dollar index edging higher. S&P futures up 5.80, Dow futures up 41; 10-yr lower, yield at 3.66%.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
The bridge that collapsed on Interstate 5 bridge over the Skagit River in Washington was listed as “functionally obsolete” and “fracture critical,” which means the whole sha-bang could come tumbling down if one major part fails. Click here to read the details from USAToday. This sort of thing shouldn’t be happening in a modern, developed nation. Barry LePatn […]
