26 Apr 2013 AMC

26 Apr 2013 AMC

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Commentaries 

Stock Market Update

16:20 ET Dow +11.75 at 14712.55, Nasdaq -10.73 at 3279.25, S&P -2.92 at 1582.24 :[BRIEFING.COM] The major averages entered the weekend on a mixed note as the S&P 500 slipped 0.2% while the Dow Jones Industrial Average added 0.1%.  The final session of the week began on a cautious note as downbeat overseas trade and mixed corporate earnings pressured equity futures. In addition, a disappointing first quarter GDP report contributed to the lower open.  According to the advance report, first quarter GDP grew at an annualized rate of 2.5%. That was up from a 0.4% gain in the final quarter of last year, but below the Briefing.com consensus expectation of a 2.8% gain.  A deeper look into the data sets the tone for a likely severe deceleration in trends during the second quarter.  Just about all of the gains in the first quarter came from consumption and inventories, both of which are likely to experience a pullback over the next three months. Furthermore, government spending, which fell 4.1% in the first quarter after declining 7.1% in Q4 2012, is set to fall by a larger amount during the second quarter as the effects of the sequestration become more pronounced.  With below-consensus growth, the growth-sensitive materials sector was the weakest performer of the day as steelmakers weighed. The Market Vectors Steel ETF (SLX 41.35, -0.71) settled lower by 1.7%. Metal prices also saw a decline as gold slipped 0.4% to $1456.60 per troy ounce while silver declined 1.2% to $23.86 per troy ounce. Also of note, copper futures fell 1.8% to $3.180 per pound.  While the sluggish GDP report weighed on producers of basic materials, the materials sector was the only group which slumped more than 1.0%. Meanwhile, the second weakest sector, financials, ended with a loss of just 0.4%.  Although first quarter economic growth missed expectations, the broader market appeared unconcerned as market participants are well aware of the Federal Reserve's commitment to maintain its accommodative monetary policy for as long as conditions warrant continued easing. As such, the disappointing report resulted in a morning dip, which was met with enough afternoon buying interest to bring the S&P back to its flat line. Those levels held until the final 20 minutes when sellers reemerged and pushed the benchmark average back into the red.  As mentioned earlier, quarterly earnings were in focus this morning. The discretionary sector underperformed as retailers displayed some weakness. Amazon.com (AMZN 254.81, -19.89) lost 7.2% after its above-consensus results were overshadowed by disappointing operating income guidance.  In addition, Starbucks (SBUX 60.00, -0.50) shed 0.8% after its revenue fell short of the Capital IQ consensus estimate. Guidance was also a point of concern as the company lowered its third quarter earnings expectations below consensus.  On the upside, the industrial sector outperformed the broader market as Dow components, Boeing (BA 92.85, +1.18) and General Electric (GE 22.21, +0.26) ended with respective gains of 1.3% and 1.2%. Shares of Boeing rallied following reports indicating Japan will allow the 787 Dreamliner to return to service after the jet experienced battery problems in recent months.  Transportation-related stocks also traded ahead of the broader market. The Dow Jones Transportation Average added 0.1% with airlines providing the leadership. Delta Air Lines (DAL 16.81, +0.52) rose 3.2% after the House of Representatives passed a bill to end sequester-related Federal Aviation Administration furloughs.  Today's economic data also included the University of Michigan Consumer Sentiment Index, which was revised up to 76.4 from 72.3 in the final April reading. That is still down from 78.6 in March and the weakest reading since January. The Briefing.com consensus expected the sentiment index would be essentially unchanged at 72.4.  On Monday, March personal income, personal spending, and core PCE prices will all be reported at 8:30 ET while March pending home sales will be announced at 10:00 ET.

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Weekly Analysis
Week 38



Technical Updates
























Briefing's Commentaries

On Monday, the S&P 500 settled higher by 0.5% despite enduring some intraday weakness while the Dow added 0.1%, and the tech-heavy Nasdaq gained 0.9%. Technology stocks led from the start with Microsoft (MSFT 31.79, -0.15) providing considerable support after ValueAct announced a $2 billion stake in the software company. Other tech shares also displayed strength as Apple (AAPL 417.20, +8.82) climbed 2.1%. Although most large tech names ended with gains, IBM (IBM 194.31, +0.36) shed 1.1% to follow Friday's earnings-driven 8.3% drop. 

Tuesday's session ended with strong gains as the S&P 500 climbed 1.0%. Financials and technology led the advance with bank stocks outperforming notably. The SPDR Financial Select Sector ETF (XLF 18.56, -0.08) settled higher by 1.8% after Discover Financial Services (DFS 43.92, -0.36) and Dow component Travelers (TRV 85.15, -0.12) reported better-than-expected earnings. 

The major averages ended Wednesday's session on a mixed note as the Dow shed 0.3% while Nasdaq and S&P 500 ended flat. Consumer staples lagged after Procter & Gamble (PG 77.10, +0.52) reported revenue below the Capital IQ consensus estimate. In addition, the company issued cautious fourth quarter earnings and revenue guidance. The top performing sector of the year, health care, declined steadily throughout the day afterAmgen (AMGN 108.38, -0.28), Edwards Lifesciences (EW 64.17, -1.22), and Eli Lilly(LLY 56.46, +0.03) all reported below-consensus revenues. 

Thursday saw equities settle with modest gains. The S&P 500 climbed 0.4% as materials outperformed throughout the session. Miners were among top sector components as precious metals rallied. Gold futures advanced 2.8% to $1462.80 per troy ounce while silver futures spiked 6.2% to $24.25 per troy ounce. Also of note, copper rose 2.8% to $3.247 per pound. ..NYSE Adv/Dec 1211/1750. ..NASDAQ Adv/Dec 933/1510.

Next Week In View


Jason's Commentaries

On the weekly perspective, it seems that we're had a slightly bullish and very volatile week with many big companies announcing earnings. It seems that the earnings of those companies are keeping the market up. However, here's some summary of the Dow components that has announced their earnings.

Negative reaction to earnings
IBM
BAC
GE
MMM
PG
T
UNH
UTX
 XOM


Positive reaction to earnings
AXP
BA
CAT
CVX
DD
INTC
JNJ
KO
MSFT
VZ

Mixed Reactions
AA
JPM
MCD
TRV

Here it seems that quite a few Dow components are having negative reactions and it's definitely not a bull sign. We have a few more companies to announce their earnings. Despite that, we're coming to an end of April and we might have a sell in may coming.Amongst the main sectors, the financials and utilities are moving up together, while the other sectors are getting sideways. Maybe a sideways trend for a while more before the market get knocks off from its high?

Turning back from the weekly view to Friday's close. While we're having a flat Friday and it seems to me that the market is likely to go down on Monday. Market is having a volume of 625million shares traded on the NYSE and it's definitely more bearish than bullish on Friday. VIX came down slightly though. Most sectors were flat except for Utilities and Materials. Materials lagged more than 1% while the Utilities managed to rack up some gains which managed to keep the market afloat. While we're having an earnings craze, we're definitely going to go through more volatility next week, with the employment reports coming out. 

Market Call: DOWN

Date: 29 Apr 2013