Post by Conrad Alvin Lim on Nov 27, 2006 22:21:42 GMT -4
Market Recap
27 November 2006
I don't know that the phrase "rough day" really does today's performance on Wall Street justice. The wave of selling that washed over investors today could be attributed to many factors; Wal-Mart's same-store sales, tryptophan-induced drowsiness, rising crude prices. However, as one diligent Schaeffer's reader put it, "While it may be true that Black Friday focused on retail, the large drop in the dollar belies other more serious problems." And that was the true rub on the Street today, as a fresh plunge in the old greenback probably bears most of the responsibility for today's outflow of investment capital from equities into bonds, metals, and other safe-haven investments.
Against this backdrop, the Dow Jones Industrial Average (DJIA- 12,121.8) gave up more than 150 points and posted its first close below its 10-day and 20-day trendlines since November 3. Meanwhile, the S&P 500 Index (SPX - 1,381.96) put in a similar performance, dropping nearly 19 points to also finish below its 10-day and 20-day trendlines. What's more, the SPX is currently in the process of testing key support in the 1,380 region. Finally, the Nasdaq Composite (COMP - 2,405.9) plunged more than 54 points to test the 2,400 level and its rising 20-day moving average.
Light Appeal Up in Smoke
Tobacco related stocks found some positive momentum late in the session, but cigarette king Altria Group (MO) and Reynolds American (RAI) remained mired in the red. One year after the Illinois Supreme Court handed Philip Morris USA a victory in a "lights" cigarette case, the U.S. Supreme Court rejected the plaintiff's appeal. The high court said it will not hear the case that alleges that Morris, a unit of MO, defrauded people who smoked "light" cigarettes by marketing them as somehow less harmful than regular ones.
Tear Down this Wal
Wal-Mart Stores (WMT) announced over the weekend that U.S. same-store sales fell 0.1 percent during November, marking the company's first such drop since 1996. In other news, WMT also agreed to a joint venture with India's Bharti Enterprises in order to gain a foothold in a market that has been closed to foreign companies. On the news, shares of WMT fell more than two percent.
Swing Lowe's, Sweet Analyst Ratings
Home-improvement retailer Lowe's Companies (LOW) managed to buck the downtrend on the Street today, gaining more than one percent on the session. The company was upgraded to "buy" from "neutral" at Banc of America Securities this morning. The brokerage also lifted its price target on LOW to $43 per share. According to the brokerage, "Fundamentals have not bottomed, but valuation may have as we believe the market is beginning to look through the potential trough."
Commodity Catch-Up
Crude for December delivery resumed trading on the New York Mercantile Exchange today, rebounding from recent weakness to close back above the $60 mark. Lifted by comments from Saudi Arabia's oil minister that he would support additional cuts in production at OPEC's December meeting, the front-month crude contract advanced $1.08 on the session to close at $60.32 per barrel. Elsewhere in the energy pits, gasoline gained 0.5 cent to close at $1.5937 per gallon, heating oil was up 3.87 cents at $1.7052 per gallon, and natural-gas was up 28 cents at $7.998 per million British thermal units.
Meanwhile, gold for December delivery continued to benefit from the dollar's weakness while acting as a safe-haven bid for investors pulling their money out of the equity market on today's heavy selling. Against this backdrop, the malleable metal closed its first session of trading on the NYMEX following the holiday break higher by $11.60 an ounce at $640.60.
Dollar Details
Extending its losses against its major foreign competitors today, the U.S. dollar fell to a 20-month low versus the euro on Monday. Traders continue to wait for the week's economic reports in hopes of some positive drivers for the old greenback. What's more, many on the Street are on the edge of their seat for Federal Reserve comments later in the week that could offer up some clues as to the outlook for U.S. interest rates. By the end of the session, the dollar was quoted at 116.12 yen, while the euro traded at $1.3121.
Treasury Talk
Weakness in the U.S. dollar and the equity market also boosted Treasury prices, sending yields lower on the session. Despite a spot of early morning weakness, Treasurys gained strength as stock losses deepened through out the session. On the day, the 10-year Treasury note rose 5/32 to close at 100-23/32, with a yield of 4.536 percent.
Levels to Watch in Trading:
Dow Jones Industrial Average (DJIA – 12,121.71) - support at 12,000; resistance at 12,500
S&P 500 (SPX - 1,381.90) - support at 1,330; resistance at 1,450
Nasdaq Composite (COMP - 2,405.9) - support at 2,320; resistance at 2,600
27 November 2006
I don't know that the phrase "rough day" really does today's performance on Wall Street justice. The wave of selling that washed over investors today could be attributed to many factors; Wal-Mart's same-store sales, tryptophan-induced drowsiness, rising crude prices. However, as one diligent Schaeffer's reader put it, "While it may be true that Black Friday focused on retail, the large drop in the dollar belies other more serious problems." And that was the true rub on the Street today, as a fresh plunge in the old greenback probably bears most of the responsibility for today's outflow of investment capital from equities into bonds, metals, and other safe-haven investments.
Against this backdrop, the Dow Jones Industrial Average (DJIA- 12,121.8) gave up more than 150 points and posted its first close below its 10-day and 20-day trendlines since November 3. Meanwhile, the S&P 500 Index (SPX - 1,381.96) put in a similar performance, dropping nearly 19 points to also finish below its 10-day and 20-day trendlines. What's more, the SPX is currently in the process of testing key support in the 1,380 region. Finally, the Nasdaq Composite (COMP - 2,405.9) plunged more than 54 points to test the 2,400 level and its rising 20-day moving average.
Light Appeal Up in Smoke
Tobacco related stocks found some positive momentum late in the session, but cigarette king Altria Group (MO) and Reynolds American (RAI) remained mired in the red. One year after the Illinois Supreme Court handed Philip Morris USA a victory in a "lights" cigarette case, the U.S. Supreme Court rejected the plaintiff's appeal. The high court said it will not hear the case that alleges that Morris, a unit of MO, defrauded people who smoked "light" cigarettes by marketing them as somehow less harmful than regular ones.
Tear Down this Wal
Wal-Mart Stores (WMT) announced over the weekend that U.S. same-store sales fell 0.1 percent during November, marking the company's first such drop since 1996. In other news, WMT also agreed to a joint venture with India's Bharti Enterprises in order to gain a foothold in a market that has been closed to foreign companies. On the news, shares of WMT fell more than two percent.
Swing Lowe's, Sweet Analyst Ratings
Home-improvement retailer Lowe's Companies (LOW) managed to buck the downtrend on the Street today, gaining more than one percent on the session. The company was upgraded to "buy" from "neutral" at Banc of America Securities this morning. The brokerage also lifted its price target on LOW to $43 per share. According to the brokerage, "Fundamentals have not bottomed, but valuation may have as we believe the market is beginning to look through the potential trough."
Commodity Catch-Up
Crude for December delivery resumed trading on the New York Mercantile Exchange today, rebounding from recent weakness to close back above the $60 mark. Lifted by comments from Saudi Arabia's oil minister that he would support additional cuts in production at OPEC's December meeting, the front-month crude contract advanced $1.08 on the session to close at $60.32 per barrel. Elsewhere in the energy pits, gasoline gained 0.5 cent to close at $1.5937 per gallon, heating oil was up 3.87 cents at $1.7052 per gallon, and natural-gas was up 28 cents at $7.998 per million British thermal units.
Meanwhile, gold for December delivery continued to benefit from the dollar's weakness while acting as a safe-haven bid for investors pulling their money out of the equity market on today's heavy selling. Against this backdrop, the malleable metal closed its first session of trading on the NYMEX following the holiday break higher by $11.60 an ounce at $640.60.
Dollar Details
Extending its losses against its major foreign competitors today, the U.S. dollar fell to a 20-month low versus the euro on Monday. Traders continue to wait for the week's economic reports in hopes of some positive drivers for the old greenback. What's more, many on the Street are on the edge of their seat for Federal Reserve comments later in the week that could offer up some clues as to the outlook for U.S. interest rates. By the end of the session, the dollar was quoted at 116.12 yen, while the euro traded at $1.3121.
Treasury Talk
Weakness in the U.S. dollar and the equity market also boosted Treasury prices, sending yields lower on the session. Despite a spot of early morning weakness, Treasurys gained strength as stock losses deepened through out the session. On the day, the 10-year Treasury note rose 5/32 to close at 100-23/32, with a yield of 4.536 percent.
Levels to Watch in Trading:
Dow Jones Industrial Average (DJIA – 12,121.71) - support at 12,000; resistance at 12,500
S&P 500 (SPX - 1,381.90) - support at 1,330; resistance at 1,450
Nasdaq Composite (COMP - 2,405.9) - support at 2,320; resistance at 2,600