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Mondays are usually a good bet for an upside tilt, but if you blinked you missed any bullish indications. The early going was like trying to do butterfly in a pool full of cold porridge, and the afternoon was almost a panic.
Still, I had some fun: I've been experimenting with CFD accounts to try and get a handle on them, and although their 'embedded fees' - i.e., their bid-ask spreads - are very high (relative to discount futures brokerage), their low capital requirement makes thenm potentially useful as an entry-level vehicle for the beginner. And nowadays you can trade single-stock CFDs as well, which is nifty.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation - a $6.75billion, overnight repurchase with $6.582billion in T-backed collateral undertaken at a 1.6 basis point discount to the Fed Funds Rate (FFR). No real discount to speak of, and hence the bouncelet at 10 a.m. was weak as a baby kitten.
Major US Indices
The Dow Jones Industrial Average lost 99.34 points (0.91%), closing out the day at 10792.58 points. The index hit an intraday high of 10927.12 just after 10 a.m., and fell as low as 10790.26 during the session - in other words, it closed pretty much on its low. A 130-point trip, pretty much one-way.
That size of a dump would be impressive regardless of the intraday pattern, but today's was even more better (as Hop Sing might say). Y'see, at 1 p.m. NY time, the Dow was still above 10900, and at 1:30 it was still above 10890. Then the "afternoon craptacular" kicked in, and down she went.
Within the blue-chip index, 4 stocks rose, the biggest gainers being General Motors (GM, +1.70% to $25.78) and AT&T (T, +0.15% to $26.66), which accounted for 4 Dow points between them. Losers in the Dow numbered 25 and were led by Boeing (BA, -3.25% to $77.88) and Home Depot (HD, -1.87% to $36.26), with these two stocks contributing -26 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 324.9m shares to 46.9m.
The broader S&P500 shed 15.9 points (1.27%), to 1236.4. Within the index, gainers numbered 51, while 411 S&P500 stocks fell for the day. Volume was tilted 8.3:1 in favour of the losers with 1671.43 million units traded in the losers as compared with 200.60 million traded in the winners .
Over at Times Square, the Nasdaq Composite dipped 43.74 points (2.05%), to close at 2091.32, while larger-cap technology issues fared better with the Nasdaq100 losing 30.66 points (1.98%), to end at 1520.31 points. Within the tech benchmark, gainers numbered 10, while 83 Nasdaq100 stocks fell for the day. Volume was tilted 14.8:1 in favour of the losers with 756.95 million traded in the losers compared to 51.26 million in the winners .
NYSE Volume was super-chunky, with 2.19 billion shares changing hands, while Nasdaq Volume was soft, with 1.89 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood). Tomorrow will be a bounce day.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10792.58 | -99.34 | -0.91% |
| S&P500 | 1236.4 | -15.9 | -1.27% |
| Nasdaq Composite | 2091.32 | -43.74 | -2.05% |
| Nasdaq100 | 1520.31 | -30.66 | -1.98% |
| NYSE Volume | 2.19bn | - | - |
| Nasdaq Volume | 1.89bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 1.37%
- General Electric (GE) -$0.20 (0.59%) to $33.87;
- Citigroup (C) -$0.44 (0.88%) to $49.33;
- Wal Mart (WMT) -$0.14 (0.3%) to $46.99;
- I.B.M. (IBM) -$0.61 (0.79%) to $77.02;
- Intel (INTC) -$0.30 (1.75%) to $16.86;
- Cisco Systems (CSCO) -$0.49 (2.45%) to $19.48;
- eBay (EBAY) -$0.47 (1.54%) to $30.11;
- Fannie Mae (FNM) -$1.36 (2.76%) to $47.90; and
- Freddie Mac (FRE) -$0.76 (1.32%) to $56.80.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2546 to 722, for a single-day A/D reading of -1824; and Nasdaq losers exceeded gainers by 2462 to 613. The 10-day moving average of the A/D line fell to -849.1 on the NYSE, while the 10dma of the Nasdaq A/D fell to -833.2. All of these readings point to a bounce - the question is whether the bounce will be worth a damn. The talking heads would have you believe that this is a vote of no confidence in Ben Bernanke, but if you simply take a look at bond yields you get drawn ineluctably to the conclusion that the mainswamp media would not know their arse from a hot rock.
On the NYSE declining volume was greater than volume in advancing issues by 1938.7 to 228.3 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1719.3 to 162.5 million shares. Bouynce-time (I thin kI've mentioend that elsewhere).
24 NYSE-listed stocks rose to new 52-week highs, and 179 posted fresh 52-week lows, while on the Nasdaq there were 56 stocks that hit new 52-week highs, and 174 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 722 | 613 |
| Decliners | 2546 | 2462 |
| Advancing Volume (m) | 228.27 | 162.51 |
| Declining Volume (m) | 1938.71 | 1719.28 |
| New Highs | 24 | 56 |
| New Lows | 179 | 174 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 21.1 | 2.98 | 16.45% |
| CBOE Nasdaq Volatility Index | 25.82 | 2.6 | 11.2% |
| Equity Put-Call Ratio | 1.01 | 0.14 | 16.09% |
| 10-day PCR | 0.89 | 0.01 | 1.48% |
| SPX-VIX Ratio | 58.6 | -10.51 | -15.21% |
Bond Market Analysis
Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 0.1 bps to 5.032%.
The middle of the yield curve was broadly lower: five year yields rose to 4.954%, and ten-year yields rose to 4.987%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 3.0 bps tighter at 38.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 73.0 bps for 10-year AAA, and 105.5 bps for 20-years.
Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were broadly tighter with the AAA-A spread on 20-years 8.0 bps looser at 28.0 basis points and the 10-year AAA-A spread 2.0 bps looser at 20.0 bps.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 4.782 | 0.035 | 0.74% |
| UST 2Y (yld) | 5.01 | 0.01 | 0.2% |
| UST 5Y (yld) | 4.954 | 0.011 | 0.22% |
| UST 10Y (yld) | 4.987 | 0.006 | 0.12% |
| UST 30Y (yld) | 5.032 | -0.001 | -0.02% |
The Banks Index declined 0.96 points (0.88%), closing at 108.63; within the index,
- State Street (STT) -$1.54 (2.55%) to $58.78;
- Bank Of NY (BK) -$0.71 (2.19%) to $31.69;
- Mellon Financial (MEL) -$0.75 (2.1%) to $34.97;
- Northern Trust (NTRS) -$0.96 (1.73%) to $54.55; and
- Washington Mutual (WM) -$0.76 (1.67%) to $44.65.
The Broker-dealer Index slid 6.79 points (3.24%), to 202.92; the ticket clippers lined up as follows -
- Lehman Brothers (LEH) -$3.60 (5.49%) to $62.01;
- Ameritrade (AMTD) -$0.72 (4.56%) to $15.08;
- Jeffries Group (JEF) -$1.07 (3.85%) to $26.73;
- E*Trade (ET) -$0.86 (3.78%) to $21.90; and
- Merrill Lynch (MER) -$2.45 (3.45%) to $68.62.
The Philadelphia SOX (Semiconductor) index dipped 8.47 points (1.91%), closing at 435.69
- National Semiconductors (NSM) -$1.09 (4.45%) to $23.40;
- Advanced Micro Devices (AMD) -$1.07 (4%) to $25.68;
- Teradyne (TER) -$0.47 (3.27%) to $13.89;
- KLA-Tencor (KLAC) -$1.20 (2.96%) to $39.35; and
- Freescale Semiconductors (FSL-B) -$0.82 (2.89%) to $27.58.
Gold & Silver Markets
Gold fell by $1.50 (0.24%) to close at $611.30 per ounce (basis the September contract). Spot was down around $600... as soon as Bloomberg, Reuters and CNBC all climb back on the "weak Gold" bandwagon, buy the stuff.
The Gold Bugs Index lost 11.4 points (3.8%), to 288.31
- Golden Star (GSS) -$0.17 (5.99%) to $2.67;
- Meridian Gold (MDG) -$1.63 (5.64%) to $27.25;
- Hecla Mining (HL) -$0.26 (5.51%) to $4.46;
- Coeur d'Alene (CDE) -$0.25 (5.47%) to $4.32; and
- Eldorado Gold (EGO) -$0.25 (5.43%) to $4.35.
Silver fell by $0.15 (1.29%) to close at $11.07 per ounce. The Gold and Silver Index (XAU) lost 3.71 points (2.89%), at 124.71 points.
- Durban Rooderpoert Deep (DROOY) -$0.10 (7.63%) to $1.21;
- Meridian Gold (MDG) -$1.63 (5.64%) to $27.25;
- Goldcorp (GG) -$1.11 (4.2%) to $25.33; and
- Agnico Eagle (AEM) -$1.14 (3.98%) to $27.50.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 611.30 | -1.50 | -0.24% |
| Silver | 11.07 | -0.15 | -1.29% |
| PHLX Gold and Silver Index | 124.71 | -3.71 | -2.89% |
| AMEX Gold BUGS Index | 288.31 | -11.4 | -3.8% |
Oil Market
Oil lost ground, shedding $1.27 per barrel, closing at $70.36 per barrel - after soem early strength due to high winds in the Gulf of Mexicon and high drama in the Gulf of Arabia (well, close... Iran is not bending over willingly, which undermines the US's intention to make it another satrapy).
The Oil and Gas Index (XOI) shed 17.84 points (1.69%), to end the session at 1037.03
- Sunoco (SUN) -$2.26 (3.43%) to $63.64;
- Kerr Mcgee (KMG) -$3.11 (2.98%) to $101.25; and
- Repsol YPF (REP) -$0.45 (1.68%) to $26.28.
The Oil service stocks (OSX) Index lost 9.25 points (4.61%), ending the day at 191.41
- Global Industries (GLBL) -$1.26 (7.38%) to $15.81;
- Weatherford International (WFT) -$3.26 (6.61%) to $46.06; and
- Tidewater (TDW) -$3.00 (6.58%) to $42.59.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 374.37 | 0 | 0% |
| Crude Oil Light Sweet | 70.36 | -1.27 | -1.77% |
| Heating Oil | 1.9913 | -0.05 | -2.67% |
| Natural Gas | 6.224 | 0.05 | 0.84% |
| Unleaded Gas | 2.1243 | -0.03 | -1.32% |
| AMEX Oil Index | 1037.03 | -17.84 | -1.69% |
| Oil Service Index | 191.41 | -9.25 | -4.61% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 85.4 | -0.31 | -0.36% |
| Euro | 1.2588 | -0.0054 | -0.43% |
| Yen | 114.355 | 0.37 | 0.32% |
| Sterling | 1.8426 | 0.002 | 0.11% |
| Australian Dollar | 0.7456 | -0.0024 | -0.32% |
| Swiss Franc | 1.2335 | 0.0026 | 0.21% |
| Canadian Dollar | 0.9096 | 0.0061 | 0.68% |
