15 Feb 2013 AMC

15 Feb 2013 AMC

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Commentaries 

Stock Market Update 16:25 ET Dow +8.37 at 13981.76, Nasdaq -6.63 at 3192.03, S&P -1.59 at 1519.79 :[BRIEFING.COM] The major averages ended today's session on a mixed note. The Dow added 0.1% while S&P 500 shed 0.1% after late-afternoon weakness pressured the index to its lows.  Equities saw little change into the final two hours of trade when reports indicated Wal-Mart (WMT 69.30, -1.52) saw a slow start to its February sales. Bloomberg obtained emails from the company's vice president of finance and logistics who said "February [month-to-date] sales are a total disaster." The vice president also said this was the worst start to a month he has seen in his seven years with the company.  Shares of Wal-Mart fell to session lows on heavy volume, but managed to recover a portion of their losses. In addition, the news weighed on other retailers. Target (TGT 61.71, -1.02) and Family Dollar (FDO 55.94, -0.67) saw respective losses of 1.6% and 1.2%. Meanwhile, the broader SPDR Retail ETF (XRT 67.47, -0.26) lost 0.4% after being up as much as 1.4% in earlier trade.  The consumer staples sector saw activity throughout the day. This morning, Campbell Soup (CPB 39.40, +0.68) J.M. Smucker (SJM 92.40, +0.24), and Kraft Foods (KRFT 47.17, +0.01) reported earnings. All three names beat on the bottom line and Kraft was the only one of the three which missed on revenue.  Consumer stocks fared relatively well into the afternoon and the discretionary sector was the top performer until the Wal-Mart news spilled over to several other retail names.  Contributing to the early strength was an upbeat January consumer sentiment survey from the University of Michigan. According to the preliminary reading, the survey rose to 76.3 from its prior reading of 73.8. Today's report surprised to the upside as the Briefing.com consensus had expected the survey would climb to 73.5.  While consumer stocks were in focus for the bulk of the day, the energy sector was the day's biggest laggard. The SPDR Energy Select Sector ETF (XLE 78.45, -0.91) lost 1.2% amid weakness in crude oil. The energy component fell 1.4% to $95.99.  The CBOE Volatility Index (VIX 12.51, -0.15) settled in the red despite a brief jump into positive territory. However, the term structure of VIX futures reveals some buying interest at the distant end of the curve as June, July, September, and October contracts settled with slight gains.  When the dust from today's active afternoon—and not so active remainder of the day—settled, defensively-oriented sectors ended in the lead. Telecoms (+0.3%), utilities (+0.3%), health care (+0.2%), and consumer staples (+0.2%) outperformed while energy (-1.1%), financials (-0.3%), and technology (-0.1%) lagged.  Today's volume represented the highest total of the week as 940 million shares changed hands on the floor of the New York Stock Exchange. However, February options expiration did its part to push the total above its 50-day average, which sits in the neighborhood of 700 million.  Comments from this weekend's G20 summit taking place in Russia have begun making the rounds. Earlier, Jens Weidmann of Germany's Bundesbank said the euro is not overvalued and the European Central Bank President Mario Draghi is not talking down the common currency. Meanwhile, Mr. Draghi said euro exchange rate is not a policy target for the central bank.  Looking at the day's remaining economic data, January industrial production decreased 0.1%, which was worse than the 0.2% uptick that had been expected by the Briefing.com consensus. Meanwhile, capacity utilization hit 79.1%, which was better than the 78.9% expected by the Briefing.com consensus.  February Empire Manufacturing Survey climbed to 10.0 from its prior reading of -7.8. The report was a positive surprise as the Briefing.com consensus expected the survey to rise to 0.0.  Lastly, net long-term TIC flows showed an inflow of $52.3 billion in foreign funds into USD-denominated assets during November.  Note that equity and bond markets will be closed on Monday in observance of Presidents Day.  On Tuesday, the NAHB Housing Market Index will be reported at 10:00 ET. Among earnings of note, Barnes & Noble (BKS 13.03, -0.11) and RadioShack (RSH 3.27, -0.06) will report their quarterly results prior to the open.

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Briefing's Commentaries

Week in Review: S&P 500 Inches Higher

On Monday, the S&P 500 ended a quiet session with a slim loss of 0.1%. Equities started the day amid mixed European trade where Italian and Spanish stocks trailed behind the remainder of the region. The relative weakness came amid continued political turmoil as Silvio Berlusconi speculated his party may be closing in on the lead ahead of the February 24/25 general elections. Meanwhile, Spanish equities underperformed as Prime Minister Mariano Rajoy continued facing increased scrutiny following allegations of having accepted secret payments from his party's slush fund. A weekend poll indicated almost 80% of respondents have found Mr. Rajoy's explanations to be insufficient.Nasdaq (NDAQ 31.07, +0.47) rose 3.1% after reports indicated the exchange has held preliminary talks with Carlyle Group regarding a possible deal to go private. However, negotiations have stalled over a purchase price.

Tuesday saw equities settle on a mixed note. The Dow climbed 0.3% and registered its highest close of the year while the S&P 500 added 0.2%, and Nasdaq shed 0.2%. The day got off to a slow start as the major averages spent the entire morning near their respective unchanged levels. However, key indices were able to climb to their highs in afternoon trade as financials paced the advance. The financial sector led throughout the session, and the S&P 500 Financials Index climbed above 240 for the first time since October 2008. Bank of America (BAC 12.03, -0.10) and Citigroup (C 43.84, -0.48) both gained near 3.0% as the two supported the space.

Wednesday's session also ended on a mixed note despite initial strength. The Dow slipped 0.3%, while the S&P 500 and Nasdaq eked out gains of 0.1% and 0.3% respectively. The S&P 500 began the day on an upbeat note amid strength in industrials and discretionary shares. The two sectors outperformed after Comcast (CMCSA 41.24, +0.90) reported strong earnings and announced the acquisition of General Electric's (GE 23.29, -0.12) 49% stake in NBCUniversal. General Electric gained 3.6%, and settled near its highs while Comcast added 3.0% after being up as much as 7.6% in early trade.

On Thursday, the major averages ended little changed with the S&P 500 tacking on 0.1%. The benchmark index settled slightly higher after spending the majority of the day within a two point range of Wednesday's close. Equities slipped out of the gate with the downbeat European trade contributing to early weakness. This resulted from disappointing fourth quarter GDP reports from France, Germany, Greece, Italy, and Portugal. All five countries saw their economies contract during the final three months of 2012. As a result, the fourth quarter Eurozone GDP shrank 0.6% quarter-over-quarter. H.J. Heinz (HNZ 72.29, -0.22) surged 20% after agreeing to be acquired by a group including Warren Buffet's Berkshire Hathaway (BRK.B 99.77, +0.56) for $28 billion, or $72.50 per share. The agreed price represents a 20% premium to Heinz's Wednesday close.

Next Week In View


Jason's Commentaries

What a flat week to begin with... Ended flat on the week as well... Most sectors were flat last week. However, Friday, the consumer discretionary sector were dragged down by Walmart, S&P500 and NASDAQ COMPOSITE  were down, while DJIA were held up by IBM.. So if we look at the internals, we have more than 800 million shares traded on the NYSE, on the Feb expiration Friday. Friday ended with a slight bound to make back its losses the market suffered at the start of the trading session. I'm seeing that as a bullish momentum towards the end of the trading day and I'm definitely expected Tuesday(Monday is a non-trading session) to be bullish. However, we saw the VIX slipping slightly, TRIN in the bearish region, the bears outpacing the bulls slightly throughout the session, I'm still expecting the market to continue to move sideways for at least one more week. While next week we're having the FOMC minutes coming out again on Wednesday, the Tuesday might just go flat in expectation of Wednesday's minutes.

Market Call: FLAT to upside
Market Call(Weekly): FLAT 

Date: 19 Feb 2013