Last Friday it was MMM that warned and Monday it was EMC’s turn. Just before the market opened, EMC lowered its outlook for second quarter results. EMC is a tech company and led the NASDAQ down on Monday turning in nearly a 7% loss for itself by the end of the day. The NASDAQ 100 traded up 11 points early Monday but two hours into the day it couldn’t stay green and by the end of the day ended down about 12 or just less than 1%. The Merrill Lynch strategist Richard Bernstein downgraded the tech sector because of interest rates hikes by the Fed.
Meanwhile back at the funny farm, the Dow opened up and kept going up for about an hour and a half to plus 80 on the day making up for some of the 134 gouging it took on Friday. But, from there the Dow basically slide all day long and was trading in negative territory before rallying in the last hour to close up about 12 points.
In case you haven’t noticed, the stock market is having trouble holding its head above water and the “bear” is reasserting itself. We saw the little “Fed is done” rally last week but that has quickly crumbled especially in the broader market and more particularly in tech. Looking at the NDX, the NASDAQ 100, it is now trying to hold the 52 week lows and probably will fail very soon. The low there is 1502.20 and it closed Monday at 1520.90 so about 1 percent above the year low.
The semiconductor index we generally follow is the SOX. Looking at the SOX this evening we see that it dropped over 2% today and broke through the October/November 2005 lows. The semi’s are struggling to say the least and this is going on while the Dow is still above the 11K mark.
After the market closed on Monday, AA, Alcoa, reported second quarter earnings. The company failed to meet market expectations for sales and fell 4.5% in after hours trading. Still the futures are showing a positive opening for the market on Tuesday. We’ll see if that holds true or not. Likewise, Lucent warned of lower revenue and profit. I’d tell you that the stock traded lower in after hours trading but that would not surprise anyone. This is a $2 stock and it is known for its “wild” trading, please.
We expect very little strength to develop in the market any time soon. The market is Overbought right now and at any moment is ready to roll over Hard. We hope you have unloaded your stocks and if not…
Be careful out there.
Dow Industrials: 11,103.55 +12.88
RYVNX: 23.11
RYAIX: 24.77
TLT: 84.37
BEGBX: 13.41
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment