Reply #51: Closing time...suspended animation most of the afternoon [View All]

[54anickel]

Dow 12,090.26 73.40 (0.60%)
Nasdaq 2,350.62 28.48 (1.20%)
S&P 500 1,377.34 11.74 (0.85%)
10-yr Bond 4.6750% 0.0460
30-yr Bond 4.7960% 0.0450
NYSE Volume 2,384,861,000
Nasdaq Volume 2,268,945,000

4:20 pm : After several failed attempts to lock in some of the market's impressive gains of late, sellers finally finished what they started, closing stocks lower across the board.

With the Dow just a day removed from hitting its 13th record high in 18 days, a sense that stocks were overbought on a short-term basis left the market looking tired and vulnerable in pre-market action. Also acting as a constraint before the opening bell even sounded was a weaker than expected GDP report.

At 8:30 ET, the Commerce Dept. reported that Q3 GDP rose only 1.6% (consensus 2.1%) in Q3, the slowest pace in three years, due primarily to a huge 17% drop in residential construction activity which shaved 1.1% off the GDP gain. That wasn't all that surprising, though, since Fed Chairman Bernanke said on October 4th that the U.S. housing market is in a "substantial correction,'' which will lop about one percentage point off economic growth in the second half of the year.

The GDP report also showed that consumer spending picked up and that inflation, as reflected in a lower than expected 1.8% rise on the chain deflator, remains contained, indicative of a soft landing. Be that as it may, the weak GDP headline left investors questioning the sustainability of the recent advance, which opened the door for anything negative to push stocks even lower.

Then, as it appeared the bulls might simply surrender a modest pullback to some characteristic consolidation following such a huge run-up, sellers wrapped their arms around a negative research note and ran wit hit. Between 1:00 and 2:00 ET, it was reported that Goldman Sachs is cutting its growth forecast for motherboard shipments. After the broker reportedly said motherboard demand is "falling off a cliff," tech stocks did just that, selling off and removing notable sector leadership that took a toll on overall sentiment.

Better than expected reports from blue chips like Microsoft (MSFT 28.34 -0.01) and Chevron (CVX 67.64 +0.14) were all but forgotten. DJ30 -73.40 NASDAQ -28.48 SP500 -11.74 NASDAQ Dec/Adv/Vol 2023/1004/2.24 bln NYSE Dec/Adv/Vol 2116/1162/1.55 bln

3:30 pm : The major averages continue to languish near their worst levels of the day as the bulk of industry leadership remains negative. Should losses hold going into the close, today's sell-off snaps a four-day winning streak for the Dow and S&P 500. On a positive note, the S&P 500 is still on track for its best monthly performance (+3.2%) since last November and aggregate operating earnings for Q3 are on pace to grow a stronger than expected 18%. DJ30 -72.20 NASDAQ -27.19 SP500 -11.23 NASDAQ Dec/Adv/Vol 1932/1048/1.89 bln NYSE Dec/Adv/Vol 2038/1208/1.22 bln

3:00 pm : Selling remains the name of the game as a reversal in Materials now leaves all 10 sectors in the red. Technology (-1.8%), though, continues to be the biggest drag on sentiment. To wit, the sector now accounts for six of today's worst performing S&P industry groups: Semiconductor Equipment (-3.3%), Semiconductors (-2.9%), Computer Storage (-2.3%), Application Software (-2.3%), Communication Equipment (-2.0%) and Internet Software & Services (-1.8%). DJ30 -77.40 DOT -1.1% NASDAQ -28.15 SOX -2.2% SP500 -11.61 NASDAQ Dec/Adv/Vol 1939/1020/1.70 bln NYSE Dec/Adv/Vol 2010/1230/1.09 bln

2:30 pm : The bottom continues to fall out of the market as losses continue to mount in the absence of spirited leadership from a number of blue chips. Of the 21 Dow components under pressure, Intel (INTC 21.12 -0.65) and Hewlett-Packard (HPQ 38.60 -0.57) are pacing the way lower following reports that Goldman Sachs is out with a negative call on motherboard shipments saying demand has fallen quickly in October, prompting them to cut forecasts. Other tech names selling off include AMD (-1.7%), MU (-2.8%), AMAT (-2.3%), KLAC (-2.8%), NVLS (-2.1%), TER (-1.9%), and DELL (-1.3%). DJ30 -73.24 NASDAQ -27.37 SOX -1.5% SP500 -11.30 NASDAQ Dec/Adv/Vol 1811/1124/1.53 bln NYSE Dec/Adv/Vol 1853/1362/982 mln

2:00 pm : Selling continues to intensify as the indices extend their reach into negative territory. Adding to the market's recent struggles has been the inability by the Dow, S&P 500 and Nasdaq to find support above key technical levels of 12120, 1382 and 2359, respectively. The tech-heavy Composite continues to feel the brunt of the selling pressure and is now down 1.0%, which is understandable since it is leading the majors in October with a 5.4% advance. As of yesterday's close, the Dow and S&P 500 were up 4.0% each this month.DJ30 -48.11 NASDAQ -22.50 SP500 -8.19 NASDAQ Dec/Adv/Vol 1710/1201/1.38 bln NYSE Dec/Adv/Vol 1808/1398/894 mln

1:30 pm : Albeit not trading sharply lower, a renewed wave of selling interest within the last 10 minutes has pushed the indices to afternoon lows. A reversal in the hardware group now has Technology pacing the way to the downside (-0.8%) among the eight sectors posting losses. A similar pullback in the Dow Jones Transportation Average now has the Industrials sector -- another influential sector -- ranking second among today's laggards.DJ30 -33.30 DJTA -0.3% NASDAQ -11.79 SP500 -6.19 NASDAQ Dec/Adv/Vol 1569/1308/1.21 bln NYSE Dec/Adv/Vol 1635/1545/802 mln

1:00 pm : Little changed since the last update as the major averages settle into a narrow trading range. The market's holding pattern has been further evidenced in the A/D line, as advancers and decliners on the NYSE are now evenly matched while declining issues only hold a slim 15-to-13 margin over advancing issues on the Nasdaq. Like yesterday's action, above average volume is lending some added credibility behind trading efforts, as the Nasdaq eclipsed the 1.0 bln share mark an hour ago. This time around, however, sellers have the upper hand. DJ30 -17.56 NASDAQ -4.02 SP500 -3.71 NASDAQ Dec/Adv/Vol 1541/1310/1.15 bln NYSE Dec/Adv/Vol 1548/1598/734 mln

12:30 pm : Market remains in negative territory but stocks are kicking off the afternoon session at their best levels of the day. However, investors now find themselves weighing a rebound in oil prices and the commodity's inflationary characteristics against subsequent leadership in the Energy sector. DJ30 -14.81 NASDAQ -3.48 SP500 -3.50 XOI +0.6% NASDAQ Dec/Adv/Vol 1620/1214/1.03 bln NYSE Dec/Adv/Vol 1654/1482/668 mln


Have a great weekend! :hi: