3 Apr 2013 AMC

3 Apr 2013

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Stock Market Update 16:20 ET Dow -111.66 at 14550.35, Nasdaq -36.26 at 3218.6, S&P -16.56 at 1553.69 : [BRIEFING.COM] The S&P 500 spent today's session in a steady decline before settling lower by 1.1%. Notably, small cap stocks extended their recent weakness as indicated by a 1.7% decline in the Russell 2000. Including today's weakness, the small cap index is down more than 3.0% since Monday's open. However, the small cap index was not the only casualty of today's selling. Growth-oriented sectors pressured the broader market from the open as financials and energy led to the downside. The financial sector ended as the biggest laggard. Citigroup (C 42.50, -1.61) was the weakest performer among the majors, and the broader SPDR Financial Select Sector ETF (XLF 17.92, -0.30) fell 1.7%. Elsewhere, the energy sector was pressured by a notable drop in the price of crude oil. The energy component slid 2.9% to $94.41. In response, the SPDR Energy Select Sector ETF (XLE 77.23, -1.47) lost 1.9%. Commodity-related stocks in the materials space also finished among the biggest decliners. The SPDR Materials Select Sector ETF (XLB 38.14, -0.32) dropped 0.8%, and the sector ETF is down almost 5.0% since March 14. The continued global growth concerns were also reflected by the price of copper, which fell 1.5% to $3.327 per pound, its lowest level since early August. While today's selling weighed on all ten sectors, two groups which were key to the first quarter rally, registered wider losses than the broader market. The Dow Jones Transportation Average finished lower by 1.3% with airlines leading the decline. Delta Air Lines (DAL 14.56, -0.38) and United Continental (UAL 28.66, -0.72) both lost 2.5%. Today marked the third consecutive session which saw the bellwether complex end with a loss of at least 1.0%. In addition, the 20-stock group ended the day on its 50-day moving average. The index has not closed below this closely-watched indicator since November 21. Homebuilders also saw outsized losses and the SPDR S&P Homebuilders ETF (XHB 28.52, -0.83) slid 2.8%. Today's selling also caused the homebuilders ETF to end below its 50-day average, and down 5.0% on the week. Also of note, the recent saber-rattling out of North Korea continued today with reports indicating the North Korean army has received the approval for a nuclear attack on the United States. Although the headline crossed late this afternoon, defense-related stocks outperformed throughout the session. The PHLX Defense Sector Index ended with a loss of just 0.3%. Today's volume was well above average as more than 810 million shares changed hands on the floor of the New York Stock Exchange. Reviewing today's final sector performance, financials (-1.7%), energy (-1.6%), consumer staples (-1.1%), and consumer discretionary (-1.0%) ended as the weakest sectors. Meanwhile, utilities (-0.3%), health care (-0.6%), and industrials (-0.7%) outperformed the broader market. Looking back at today's economic data, the weekly MBA Mortgage Applications fell 4.0% to follow last week's rise of 7.7%. According to today's ADP National Employment Report, employment in the nonfarm private business sector rose by 158K in March. This was below the increase of 197K expected by the Briefing.com consensus. The ISM Non-manufacturing index softened in March, falling from 56.0 in February to 54.4. The Briefing.com consensus expected the index to drop to 55.5. Tomorrow, March Challenger Job Cuts will be reported at 7:30 ET while initial and continuing claims will be announced at 8:30 ET. In addition, the Bank of Japan and the European Central Bank are both scheduled to announce their latest interest rate decisions. ..NYSE Adv/Dec 649/2358. ..NASDAQ Adv/Dec 572/1891.

Commodities

Treasuries

Next Day In View 

Jason's Commentaries

In other news...

North Korea has permitted a nuclear attack against US.

For details, refer to http://www.channelnewsasia.com/news/asiapacific/n-korea-approves-nuclear-strike-on-us/626650.html

BOJ announces open-ended bond purchase plan ... Can purchase all maturities up to 40 years, sets two year timeline for 2% inflation target ... Monetary base will increase at an annual pace of about JPY60-70 trln

For details of this release, click here:http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf

While on the market, market came down much more than what I've expected, with the financials and the energy lagging the market heavily. While on the internals, we're having much higher than expected volumes at 800million shares traded on the NYSE, and the bears clearly outpacing the bears. VIX spiked to 14.21. While having the financials, industrials lagging the market clearly, and the defensive sectors like healthcare, transportation and telecom performing much better than the S&P500. I reckon we're going to correct very soon. However, we're having Bernanke's talk tonight and the NFP tomorrow and that will likely to be a deciding factor to whether the market will correct before earnings season. The ISM and ADP job report came in much disappointing data which contributed to the 100 points drop in the Dow. However, I believe the BOJ's decision will likely to cause a knee jerk reaction tonight. If Bernanke don't screw up his speech, we're likely to end up higher tonight. 

Market Call: DOWN

Date: 5 Mar 2013