18 Apr 2013 AMC

18 Apr 2013 AMC

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Stock Market Update 16:10 ET Dow -81.45 at 14537.14, Nasdaq -38.31 at 3166.36, S&P -10.40 at 1541.61 :[BRIEFING.COM] The major averages followed yesterday's decline with another round of selling. The S&P 500 shed 0.7% while Nasdaq lost 1.2%. Interestingly, the S&P 500 closed below its 50-day average for the first time this year.  The Nasdaq underperformed as technology stocks displayed broad weakness. The largest tech stock, Apple (AAPL 392.05, -10.75), lost 2.7% to extend its decline below the $400 level. Other large caps were also among the laggards as Google (GOOG 765.91, -16.65) surrendered 2.1% ahead of its after-hours earnings report.  Meanwhile, Taiwan Semiconductor (TSM 17.94, +0.86) was a notable outperformer after beating on earnings and revenue. However, other chipmakers did not benefit from the company's earnings as the PHLX Semiconductor Index slid 0.9%.  Notably, the continued weakness in technology has caused the sector to surrender all of its year-to-date gains. The tech space and materials are the only two sectors trading in the red this year.  The cyclical discretionary sector also finished among the laggards as homebuilders slumped. The iShares Dow Jones US Home Construction ETF (ITB 21.76, -0.51) lost 2.3%.  While most growth-oriented sectors lagged, the energy space outperformed thanks in part to a rise in crude oil. The energy component rose 2.0% to $88.39 per barrel.  On the flip side, most defensively-geared groups outperformed with the health care sector as the lone exception. The strongest segment of the year saw some selling after Dow component UnitedHealth Group (UNH 59.69, -2.34) reported its results. Though the company beat on earnings, its full-year 2013 revenue guidance fell short of the Capital IQ consensus estimate.  One of the key developments of the week has been the sharp rise of the CBOE Volatility Index (VIX 17.31, +0.80). After spiking nearly 45.0% on Monday, the near-term volatility measure took a step back on Tuesday, but resumed its climb yesterday.  With today's uptick, the VIX is back above Monday's highs as it holds at levels not seen since late February. The recent rise in volatility expectations comes after VIX spent the majority of the year trapped between 12.00 and 14.00.  Above-average volume has been a recurring theme this week, and it continued today as nearly 800 million shares changed hands on the floor of the New York Stock Exchange.  Reviewing today's economic data, the initial claims level increased from an upwardly revised 348,000 (from 346,000) for the week ending April 6 to 352,000 for the week ending April 13. The Briefing.com consensus expected the initial claims level to increase to 355,000.  The Conference Board's Index of Leading Indicators declined 0.1% in March after increasing 0.5% in both January and February. The Briefing.com consensus expected the index would be flat.  Manufacturing activities in the Philadelphia region slowed, but remained in an expansion in April. The Philly Fed's Business Outlook Survey dropped from 2.0 in March to 1.3. The Briefing.com consensus expected the index to increase to 3.0.  There are no notable data points on tomorrow's economic calendar. On the earnings front, look for General Electric (GE 22.67, -0.09) and McDonald's (MCD 101.91, -0.63) to report their first quarter results prior to the opening bell. ..NYSE Adv/Dec 1320/1653. ..NASDAQ Adv/Dec 927/1475.

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Jason's Commentaries


A 81 point drop on the DJI... It looks bearish but in fact, it's not. While we're looking at the internals, the bears aren't really outpacing the bulls by much. The fact that Dow is being dragged down that much is that a significant number of Dow components that are having significant weightage are weighing down the index. UNH lost -3.77% after missing its earnings, BAC lost 2.22% due to lousy earnings announced yesterday. Walmart lagging by 1.72%, United Technologies lost 1.4%. And IBM, the heaviest weighted stock lost 1.2%. After market closed, IBM sunk another 3%  after announcing earnings. 

Needless to say, the Healthcare, Consumer Discretionary and the Tech were the main laggards for the day. While the Energy and Utilities sectors made gains. That's why I would say Thursday was a in fact a flat day. On the Technicals side, the DJI just managed to went below the 20MA and we might be seeing some serious action in the coming few trading days. After market closed. IBM, Google and Microsoft announced earnings. Only IBM report lousy earnings while Google and Microsoft managed to edge up during the after-market hours. 

On the economic report, Initial Claims increased from 348k to 352k. On top of that, Philly Fed sunk to 1.3 from 2 in March. Also, we have to note some movement in the Treasuries with the 10y and 30y rallying. Commodities remained rather flat. For 19 Apr, we do not have much economic report coming out but before market open, we have a few notable earnings coming out.  
 
 GE, Honeywell, Kansas City Southern, Kimberly-Clark Corp, Macdonalds, Schlumberger. 

19 April will be a very very rocky Friday as 4 Dow components announced their earnings within 24 hours. If anymore of them suck, we're going down big time.

Market Call: DOWN

Date: 5 Mar 2013