Just when things started to look weak, the market makes a fool of the bearish crowd by making a nice gain today. After a few days of weakness, the DOW jumped up 112 points today. The S&P climbed higher by 14 points and the NASDAQ added 48 points by the closing bell.
Earnings were the big story today as the DOW was helped by gains in DD and the financial components GS and JPM. In addition, a strong belated advance in IBM after its good report last week was beneficial to the DOW along with gains in BA and CAT which report later this week. On the other hand, a few components were lower today: JNJ, 3M, TRV and VZ.
The overall market was boosted by earnings-related advances in BABA, homebuilder DHI and YHOO. This resulted in breadth numbers being really strong at a 21/8 upside ratio. The VIX was down to 11.07 for a decline of .70. One more higher stock day will probably take the VIX to the 11 level that will most likely halt the equities upside once again.
Bond yields were higher with the 10-year Treasury Note up to 2.43%. The dollar was a little stronger with the Euro and Japanese yen weakening a bit. This caused gold to fall back to $1.208 an ounce. Crude oil was down slightly at $52.96 a barrel, still remaining in that recent narrow range.
The one important economic report today showed that December existing home sales declined by more than expected at 2.8%. This was due to a decrease in inventory levels to their lowest since 1999.
This week brings us the following earnings reports: Tonight– ISRG and TXN; Wednesday – BA and UTX plus ABT, T, CTXS, EBAY, FFIV, FCX, MCK, NSC, QCOM, ROK and WAC; Thursday – CAT, INTC and MSFT plus GOOG, BHI, BMY, JBLU, KLAC, JNPR, RCL, SBUX and VMW; Friday – AAL, CL, GD, HON, WHR plus CVX.
Donald M. Selkin
These are excerpts from Don Selkin’s Daily Market Notes, abbreviated and updated with permission from the author. Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: Bloomberg Financial, Reuters, and the Associated Press.