Reply #55: 12:15 EST numbers and blather [View All]

[UpInArms]

Dow 10,408.20 -13.85 (-0.13%)
Nasdaq 2,109.76 -1.02 (-0.05%)
S&P 500 1,213.81 -0.81 (-0.07%)
10-Yr Bond 4.243 +0.67 (+1.60%)

NYSE Volume 910,278,000
Nasdaq Volume 758,866,000

Remaining on Rita watch, the equity market trades at its best levels midday, as investors weigh disappointments from Alcoa (AA 24.16 -1.74) and Oracle (ORCL 12.33 -1.19) against further deterioration in oil prices following an encouraging update on Rita... Within the last hour, it has been reported that Hurricane Rita's winds have weakened to 135 MPH, which has sparked hope that that the storm will be downgraded to a Category 3 hurricane and pushed oil prices ($64.75/bbl -$1.75) even lower...

Nonetheless, the market's major averages still trade within a tight range around the flat line, supported somewhat by pulled back energy prices that suggest the market believes Rita's damage will not be that severe, but ultimately bogged down by the degree of uncertainty surrounding its impending arrival... The Q3 profit warning from Alcoa and weak sales growth at Oracle, coupled with a dearth of market-moving data on the economic front, have also underpinned traders' cautious stance ahead of the weekend...

Aside from the Energy sector's 1.6% decline, fueled by the 2% slide in crude and subsequent consolidation of the sector's 40.2% year-to-date gain, Materials (-0.7%) has been a loser today, languishing on account of the Alcoa-induced aluminum (-6.4%) loss. Although Oracle delivered in-line earnings results last night, the market was disappointed by its lower than expected Q1 (Aug) sales and earnings that reflect decelerating growth. As such, shares have plummeted 9.3% and have stunted both the Tech sector's (-0.2%) the Nasdaq's upward efforts... On the flip side, though, pockets of strength in networking (+0.7%) and diskdrives (+0.4%), along with a recently recovered semiconductor group (+0.03%) have helped minimize Oracle's effect...

Industrials, however, have climbed 0.3% on Goodyear's (GT 15.57 +0.57) announced turnaround plan and 3.8% rise, while Healthcare has matched that performance on account of strength in HMOs... The influential Financials sector has also lent a bit of muscle with its 0.2% rise, but continues to be pressured by banks, which are trending negative alongside a weak Treasury market...

While the air of uncertainty may likely prevail, and as lower than average trading volume evidences a lack of conviction today, week to date respective losses of 3.1%, 1.8%, and 2.3% in the Dow, S&P, and Nasdaq may give traders some reason to bargain hunt, especially if Rita continues to lose steam...NYSE Adv/Dec 1274/1771, Nasdaq Adv/Dec 1334/1434