27 Feb 2013 AMC

27 Feb 2013

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Briefing's Commentaries 

Stock Market Update 16:25 ET Dow +175.24 at 14075.37, Nasdaq +32.61 at 3162.26, S&P +19.05 at 1515.99 : [BRIEFING.COM] Today's session saw an extension of yesterday's buying as the S&P 500 managed to erase the remainder of its losses from Monday. The broad rally occurred with six of 10 sectors adding in excess of 1.0%. Cyclical stocks led the way with industrials and materials exhibiting relative strength from the start of the session.  Today's economic data provided some support as January pending home sales rose 4.5%, which was ahead of the 1.0% increase that had been expected by the Briefing.com consensus.  In addition to January pending home sales, the market received news of durable goods orders for the same month. Although the headline number fell 5.2%, this was due to a 45.7% drop in defense and nondefense aircraft orders. Excluding transportation, orders rose a solid 1.9% in January.  Industrial shares led throughout the day. This was aided by the strong performance from transportation related stocks, which pushed the Dow Jones Transportation Average to a gain of 2.9%.  Elsewhere in industrials, Joy Global (JOY 63.45, +3.49) jumped 5.8% after its quarterly report beat on earnings and revenue.  Basic materials also finished near the lead after lagging notably in recent sessions. Today, material producers rallied broadly with miners as the lone weak spot. The SPDR Materials Select Sector ETF (XLB 38.42, +0.67) gained 1.8%.  The outperformance of cyclical stocks was also reflected by the consumer discretionary sector where homebuilders climbed on the back of the pending home sales report. Although this report does not have a direct impact on new homes, strong existing sales can be seen as a positive indicator of demand for new properties. The SPDR S&PHomebuilders ETF (XHB 28.37, +0.60) rose 2.2%.  Monday's downturn was sparked by fears that political uncertainty in Italy will upset the recent recovery observed in sovereign debt markets. This expectation caused investors to shun financial shares which exhibit heightened sensitivity to political and market fluctuations. However, today's rebound saw money return to the sector. JPMorgan Chase (JPM 49.28, +1.68) was the best performer among the majors, and the SPDR Financial Select Sector ETF (XLF 17.62, +0.27) gained 1.6%.  As the recent wave of investor fear was leaving the market, Federal Reserve Chairman Ben Bernanke did his best to help chase it away. Earlier today, the Fed Chair concluded his bi-annual, two-day testimony before Congress.  Appearing in front of the House Financial Services Committee, the Chairman continued stressing the benefits of the Fed's asset purchase plan. Today's testimony was largely a carbon copy of yesterday's remarks which confirmed the Federal Reserve's desire to continue its easy-money policy.  Reviewing S&P 500 sector performance, industrials (+1.9%), materials (+1.7%), and financials (+1.6%) settled in the lead while technology (+0.9%), telecoms (+0.9%), and utilities (+0.9%) trailed behind the broader market.  Today's volume was below average as just over 670 million shares changed hands on the floor of the New York Stock Exchange. Notably, today's final tally represented the lowest total since February 14.  Looking at tomorrow's economic news, weekly initial and continuing claims, as well as the second estimate of fourth quarter GDP will all be reported at 8:30 ET. The day's economic data will be topped off with the 9:45 ET release of the February Chicago PMI. ..NYSE Adv/Dec 2313/704. ..NASDAQ Adv/Dec 1648/814.

After Hours 18:45 ET BWC +8.8%, ANIK +3.3%, GRPN -26.1%, BSFT -24.5%, MCHX -20.8% following earnings/guidance : Today's session saw an extension of yesterday's buying as the S&P 500 managed to erase the remainder of its losses from Monday. The broad rally occurred with six of 10 sectors adding in excess of 1.0%. Cyclical stocks led the way with industrials and materials exhibiting relative strength from the start of the session. Other notable after hours movers on earnings: BWC +8.8%, ANIK +3.3%, RGR +2.7%, MYL +2.6%, CLR +2.4%, PANL +2.2%, UAN +1.9%, CBI +1.2%, GTAT +1.0%, CECO +0.9%, VALE +0.8%, MNST +0.7%, ICFI +0.4%, CSGP +0.2%, GRPN -26.1%, BSFT -24.5%, MCHX -20.8%, ANW -17.3%, JCP -14.9%, VCRA -10.9%, BOOM -2.8%, IILG -1.8%, ARI -1.7%, MBI -1.3%, DAR -1.2%, WES -1.1%, AFCE -0.9%, CHDN -0.9%, PODD -0.9%, PACD -0.8%, LTD -0.7%, DEL -0.5%, HNSN -0.4%, IOC -0.4%, WLL -0.4%, LINTA -0.3%, BEE -0.2%, MWE -0.1% Today after the close the following companies reported earnings: CBI, ITC, CSGP, MTSN, STNR, WLL, ELGX, MYL, BOOM, AHT, FARO, KRA, RGR, RJET, STAA, WES, AMSF, ARI, DXPE, GMED, MCHX, ICFI, BSFT, CBEY, CHDN, EXAM, MMLP, UAN, VCRA, CWT, DPM, IILG, AFCE, BWC, CDXS , CLR, DVR, EXL, HNSN, MBI, MNST, MWE, PANL, RLJ, AGO, CECO, DAR, EPAM, GRPN, PODD, JCP, ANW, LTD, IOC, CPRT, PLL, GEF, WGP Futures are mixed after hours: S&P 500 futures are +0.81 from fair value of 1514.59 and Nasdaq100 futures are -0.51 from fair value of 2740.76. Tomorrow morning before the open three economic reports are scheduled to be released: 1) Initial Claims (Consensus 360k) and Continuing Claims (Consensus 3150k), 2) GDP - Second Estimate (Consensus 0.5%), and 3) GDP Deflator - Second Estimate (Consensus 0.6%). Tomorrow before the open the following companies are scheduled to report earnings: DTEGY, DPZ, AIXG, LKQ, MTRN, MGLN, IRM, RDC, ANSS, AVD, BRY, CIR, CTRX, GTLS, IRDM, OCN, ORN, RNO, SNAK, VC, WNR, WPX, WWE, VRX, AWR, CVC, ISIS, PKT, TTI, BABY, GVA, NIHD, PQ, VITC, ACIW, FCN, HK, KSS, NXTM, SJI, BDBD, MTG, NAFC, SHLD, CHS, SDRL, BKS, MEI, TD

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Jason's Commentaries


This has totally caught me with my pants down... I went bear and suddenly the DJIA spiked a 200 points? I find this really disturbing when I got stopped out, I found out that there was no volumes, no news supporting this rally. The volatility is getting wilder now, especially before the congress sit down to discuss their plans about the Sequester on Friday. When I look into the internals, I find it bullish but not very convincing. Perhaps the market makers are coming together to wipe the short interest out? Despite the spike, I am maintaining my view that this will be range bounded especially we're at a high right now. Most sectors led the market by more than 1% gain yesterday. Industrials, especially the defense industry was led by General Dynamics for winning a $200 million contract, have pulling up Lockheed Martin and Boeing in sympathy. 

Market Call: DOWN

Date: 28 Feb 2013