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 Post subject: October 6th Wednesday 2010 Emini TF ($TF_F) points +3.00
PostPosted: Fri Oct 08, 2010 5:49 pm 
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Special thanks to Bloomberg, CNNMoney and Yahoo! Finance for their market summaries. gm

Dow Hits 5-Month High, Nasdaq Sinks

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By Hibah Yousuf, staff reporter
October 6, 2010: 4:31 PM ET

NEW YORK (CNNMoney.com) -- Stocks ended Wednesday's choppy session mixed, as cautious investors mulled two reports showing continued weakness in the job market. The news comes ahead of the closely-watched monthly jobs report due Friday.

The Dow Jones industrial average (INDU) added 23 points, or 0.2%, with GE (GE, Fortune 500) and Alcoa (AA, Fortune 500) leading the advance. The modest gains allowed the blue chip index to close at a fresh five-month high. The index's laggards included AT&T (T, Fortune 500) and Bank of America (BAC, Fortune 500).

The S&P 500 (SPX) seesawed between gains and losses, but ended the session flat, down less than one point from the five-month high it closed at Tuesday.

The Nasdaq (COMP) slumped throughout the day, and ended the session 19 points lower, or 0.8%. The tech-heavy index was dragged down as telecommunications company Equinix (EQIX) plunged 33% and computer software firm Citrix Systems (CTXS) sank 14.3%.

All three major indexes rallied 2% Tuesday to the highest levels since May. A report showing that service sector activity improved in September, and a surprise move by Japan's central bank to cut interest rates, sparked a broad-based rally.

But the enthusiasm evaporated Wednesday, as the dour jobs numbers weighed on investor sentiment ahead of the government's September jobs report on tap for Friday.

"The market remains focused on economic news, and most of the concerns are over the employment picture. So anything like today's payroll numbers reminds investors that the economy is still far from perfect, which leads to some weakness," said Matt King, chief investment officer at Bell Investment Advisors.

According to a consensus of economists polled by Briefing.com, the number of jobs is expected to remain flat in the upcoming monthly report. At the same time, the unemployment rate is expected to have ticked up to 9.7% from 9.6%.

But King said corporate earnings season, which unofficially kicks off after the closing bell on Thursday when Alcoa (AA, Fortune 500) reports its results, could lift the markets.

"We're expecting company results to show the same type of improvement we've seen for most of this year, and regain the market's attention," King said. "As those come in, stocks should move higher throughout the fourth quarter."

Economy: Payroll processing firm ADP reported the private sector jobs plunged in September, trouncing the forecast of an increase.

The U.S. economy lost 39,000 private sector jobs last month, said ADP on Wednesday -- which was much worse than expected. Economists were forecasting the report to show private sector employers added 18,000 jobs in September.

The number of job cuts planned by employers edged up slightly in September. However, the number remained near a rock bottom 10-year low reported in August, according to a report from outplacement firm Challenger, Gray & Christmas.

Employers said they would cut 37,151 jobs in September, up 7% from the 34,768 job cuts reported in August.

As traders look ahead to the government's jobs report due on Friday, they will use the ADP and Challenger reports as a gauge of the national unemployment picture.

Meanwhile, the International Monetary Fund said a double dip recession is unlikely, but global economic growth will slow from 4.8% this year to 4.2% in 2011.

Companies: Johnson & Johnson (JNJ, Fortune 500) announced a deal to aquire Dutch biotechnology company Crucell (CRXL) for about $2.43 billion. J&J already owns 17.9% of Crucell's outstanding shares and last year, the two companies started working together on a flu vaccine. Both companies' stocks finished higher.

* Holiday sales hinge on bargains

Costco (COST, Fortune 500) said its fourth-quarter income rose 16% to $432 million, or 97 cents per share -- beating analysts' estimates of 95 cents per share. The wholesaler's earnings got a boost from increased membership sales and strength overseas. Shares rallied 1.2%.

In a continued effort to expand its $40 billion energy business, GE (GE, Fortune 500) said it is buying energy technology and service provider Dressing Inc. for $3 billion. GE's stock rose 2.4%.

Shares of AMR (AMR, Fortune 500), the parent company of American Airlines, rose 1.6% after the airline said it is bringing back hundreds of furloughed pilots and attendants, after forming joint businesses with several other airlines.

Verizon's (VZ, Fortune 500) stock climbed out of negative territory and spiked 0.9% after rumors that Apple (AAPL, Fortune 500) is building a "Verizon-ready" iPhone resurfaced in a story in the Wall Street Journal.

World markets: European shares closed with solid gains. Britain's FTSE 100 climbed 0.8%, while France's CAC 40 and the DAX in Germany advanced 0.9%.

Asian shares finished sharply higher. Japan's Nikkei index leapt 1.8% and the Hang Seng in Hong Kong jumped nearly 1.1%. The Shanghai Composite is closed for a week-long holiday.

Currencies and commodities: The dollar slipped against the euro, the British pound and the Japanese yen.

Gold futures for December delivery rose $7.40 to settle at an all-time high of $1,347.70 an ounce, after reaching a fresh intraday record trading high of $1,351 an ounce earlier.

The price of crude oil for November delivery added 41 cents to settle at $83.23 a barrel.

Bonds: Prices for U.S. Treasurys rose, pushing the yield on the 10-year note down to 2.40% from 2.48% late Tuesday. Bond prices and yields move in opposite directions.

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Yahoo! Finance

4:30 pm : The Dow and S&P 500 essentially followed up a choppy, lackluster session with a flat finish, but the Nasdaq underperformed as large-cap tech issues acted as a drag.

Broader market trade lacked direction in the early going. Stocks were unable to build on the prior session's big bounce mostly because of disappointment over the September ADP Employment Change. The report indicated that private payrolls fell by 39,000 last month, but economists polled by Briefing.com had expected, on average, an increase of 18,000. On a positive note, data for the prior month was revised upward to reflect an addition of 10,000 payrolls. Still, the downside surprise of September adds to the uncertainty of the official nonfarm payrolls report due Friday.

Selling pressure picked up midsession, but both the Dow and S&P 500 were able to retrace the slide. For a time the Dow fractionally extended its five-month high, but the S&P 500 could not confirm the move. Blue chips were led by integrated energy giants Exxon Mobil (XOM 63.94, +0.68) and Chevron (CVX 83.89, +0.50) while the broader market was led by Massey Energy (MEE 33.82, +1.94) and Constellation Brands (STZ 18.52, +0.76), which posted better-than-expected bottom line and reaffirmed its earnings outlook for fiscal 2011.

Monsanto (MON 48.65, +0.13) was also out with its latest quarterly results. The company came short of earnings expectations and even issued downside guidance, but still advanced as materials stocks attracted broad support. Materials stocks settled with a 0.8% gain, which was matched only by the energy sector.

Tech stocks sagged all session, though. The sector's 0.6% slide came as semiconductor stocks fell 1.6% and the likes of Amazon.com (AMZN 155.40, -5.47) and Citrix Systems (CTXS 60.15, -9.85) fell out of favor. Weakness among large-cap tech issues weighed heavily on the Nasdaq, which lagged its counterparts for the entire afternoon.

Treasuries traded with strength all session. So strong were their gains that yields on Notes with 2-year, 3-year, 5-year, and 7-year maturities set record lows. The benchmark 10-year Note saw its yield settle below 2.40% after it had been as low as 2.36%, its lowest level since January 2009. The yield on the 30-year Bond fell to 3.67% after it was as low as 3.63%. During the session the yield curve hit its flattest level in about five weeks.

The dollar's doldrums continued as it dropped another 0.5% against competing currencies. That put it at a new eight-month low. Most of the move lower is owed to strength in the euro, which gained 0.7% against the greenback even though analysts at Fitch downgraded Ireland's debt.

On deck for tomorrow are the latest weekly jobless claims count and consumer credit figures for August. Earnings season gets its unofficial start after the close when Dow component Alcoa (AA 12.37, +0.23) reports its latest quarterly results.

Advancing Sectors: Materials (+0.8%), Energy (+0.8%), Industrials (+0.6%), Consumer Staples (+0.4%)
Declining Sectors: Telecom (-1.6%), Tech (-0.6%), Consumer Discretionary (-0.5%), Utilities (-0.4%), Health Care (-0.4%)
Unchanged: FinancialsDJ30 +22.93 NASDAQ -19.17 NQ100 -0.9% R2K -0.6% SP400 -0.8% SP500 -0.78 NASDAQ Adv/Vol/Dec 1083/2.13 bln/1535 NYSE Adv/Vol/Dec 1399/979 mln/1574

3:30 pm : Oil prices were down a bit at the start of pit trade, but they recovered to settle with a 0.5% gain at $83.23 per barrel in the face of bearish inventory data, which showed a build of 3.09 million barrels for the week ending October 1 when a build of just 413,000 barrels had been expected. At their session high oil prices were above $84 per barrel, which made for a five-month high.

Natural gas traded with strength all session. The energy component settled 3.3% higher at $3.87 per MMBtu.

Precious metals continued to climb. As such, gold prices settled 0.6% higher at $1347.70 per ounce and silver settled 1.3% higher at $23.04 per ounce. Ahead of pit trade the continuous gold contract set a new record high of $1349 per ounce, but the continuous silver contract set a new 30-year high of $23.19 per ounce in electronic trade following the close.

Despite their collective strength, the CRB Commodity Index ended just 0.3% higher. DJ30 +3.40 NASDAQ -25.73 SP500 -3.19 NASDAQ Adv/Vol/Dec 927/1.78 bln/1675 NYSE Adv/Vol/Dec 1245/715 mln/171

3:00 pm : The Dow is back at the neutral line and the S&P 500 has reduced its loss, but the Nasdaq continues to grapple with much more pronounced weakness.

Tech is still the culprit behind the Nasdaq's outsized loss, but tech isn't even the worst performing sector in the S&P 500. That dubious honor belongs to the telecom sector, which is down 1.7%. DJ30 +7.49 NASDAQ -23.33 SP500 -2.52 NASDAQ Adv/Vol/Dec 990/1.60 bln/1590 NYSE Adv/Vol/Dec 1274/630 mln/1696

2:30 pm : Treasuries are still in strong shape, but they have handed over some of their gains. Specifically, the 10-year Note was up about a full point at its session high, but it is now up 23 ticks. Still, its yield remains a couple of basis points below 2.40%.

The dollar remains under steady pressure as it contends with a 0.5% loss. Though that puts it at eight-month lows, the dollar is only down 0.6% year-to-date. DJ30 -0.23 NASDAQ -24.86 SP500 -3.54 NASDAQ Adv/Vol/Dec 959/1.46 bln/1601 NYSE Adv/Vol/Dec 1213/575 mln/1739

2:00 pm : Stocks have yet to recover from their recent slide. In turn, they remain near session lows.

Of the major sectors, only energy (+0.6%), materials (+0.5%), industrials (+0.4%), and consumer staples (+0.3%) are in higher ground.

Following a session of heavy trade, share volume is back to the unimpressive pace seen during recent weeks as only a bit more than a half billion shares have been traded on the NYSE. DJ30 +3.55 NASDAQ -24.33 SP500 -3.12 NASDAQ Adv/Vol/Dec 975/1.34 bln/1574 NYSE Adv/Vol/Dec 1253/525 mln/1702

1:30 pm : Selling pressure has intensified over the past few minutes. The effort has taken the major indices to new session lows.

The Nasdaq continues outpace its counterparts in the move lower. Its loss is now more than double that of the S&P 500 and about six times that of the Dow.

Tech stocks are still a primary point of weakness. The sector, which is the largest by market weight, is now down 1.3%. DJ30 -19.53 NASDAQ -30.13 SP500 -5.18 NASDAQ Adv/Vol/Dec 924/1.21 bln/1616 NYSE Adv/Vol/Dec 1145/482 mln/1780

1:05 pm : Trade has been choppy since the open, but the broader market has mostly managed to remain near the neutral line while the tech-rich Nasdaq takes heat.

The September ADP Employment Change damaged the tone of trade early on. The report revealed a surprise drop of 39,000 private payrolls and, in turn, fed uncertainty about the official nonfarm payrolls report that is due on Friday.

Though the S&P 500 hasn't been able to build on the big gains it recorded in the prior session, it hasn't really been backed down either.

Natural resource plays have been a solid source of support for the broader market.

Materials stocks are up 1.0% at the moment. Monsanto (MON 49.40, +0.88) has provided leadership, even though the company missed the consensus earnings estimate and issued downside guidance.

Continued strength among commodities has helped the sector. The CRB Commodity Index is up 0.4% after both gold and silver prices extended their climbs as high as $1349 per ounce and $23.09 per ounce, respectively.

Even oil prices have rallied to a 0.8% gain at $83.50 per barrel, a five-month high, in the face of a bearish weekly inventory report. That has helped prop up the energy sector, which currently trades 0.5% higher.

Down 1.0%, tech stocks have had some trouble this session. Weakness in the space has weighed heavily on the Nasdaq 100, which is down 1.1% as semiconductor stocks drop to a 2.0% loss. However, Equinix (EQIX 70.17, -34.92) is the Nasdaq's worst performer this session. It has lost about one-third of its market cap after the company cut guidance and was subsequently hit with several analyst downgrades.

Lackluster action among stocks has supported buying in Treasuries. The benchmark 10-year Note is up a full point and the 30-year Bond is up two full points so that their yields stand at 2.36% and 3.64%, respectively. Yields on Notes with 2-year, 3-year, 5-year, and 7-year maturities set record lows earlier today.

Meanwhile, the dollar has extended its decline to a new multi-month low. It currently lags a basket of currencies by 0.5%. Most of the move lower is owed to strength in the euro, which has gained in the face of Fitch's decision to downgrade Ireland's debt. DJ30 -22.33 NASDAQ -26.77 SP500 -4.98 NASDAQ Adv/Vol/Dec 998/1.13 bln/1521 NYSE Adv/Vol/Dec 1215/445 mln/1708

12:30 pm : A flurry of selling pressure has sent the major equity averages back to their session lows. Though that means the S&P 500 is still only down modestly, the Nasdaq Composite is in much worse shape. Its underperformance is owed to weakness in large-cap tech stocks, which have collectively taken down the Nasdaq 100 down 1.1%. DJ30 +0.07 NASDAQ -19.82 SP500 -2.53 NASDAQ Adv/Vol/Dec 1126/998 mln/1368 NYSE Adv/Vol/Dec 1396/397 mln/1503

12:00 pm : Natural resource plays recently helped lead the S&P 500 back to positive territory, but the broad market measure has had a hard time turning the move into anything more. Despite such sluggishness, materials stocks and energy stocks are still up 1.1% and 1.0%, respectively.

Strength among natural resource plays is partly owed to buying among commodities. Commodities are collectively up 0.6%, based on the CRB Commodity Index, which is now at its best level since the beginning of January. DJ30 +19.71 NASDAQ -12.11 SP500 +0.24 NASDAQ Adv/Vol/Dec 1188/873 mln/1290 NYSE Adv/Vol/Dec 1502/355 mln/1369

11:30 am : Shares of American Airlines (AMR 6.20, +0.09) are up nicely following an announcement that the company saw a boost in traffic during September. Despite that positive development, AMR's peers remain caught up in some moderate selling pressure that has the Amex Airline Index down 0.3%. Still, the Amex Airline Index is up 29% year-to-date, while the S&P 500 is up less than 4% in 2010. DJ30 +18.12 NASDAQ -14.92 SP500 -0.72 NASDAQ Adv/Vol/Dec 1115/754 mln/1325 NYSE Adv/Vol/Dec 1412/308 mln/1407

11:00 am : The broader market continues to oscillate near the neutral line, but the Nasdaq has dropped to a marked loss. The Nasdaq's outsized slide comes amid renewed weakness in tech issues like semiconductor and semiconductor equipment stocks, which are collectively down 1.4%.

Despite the weight of semiconductor stocks on the tech sector, telecom is actually the worst performing sector in the S&P 500. Telecom stocks are collectively down 1.5%. DJ30 +6.51 NASDAQ -16.85 SP500 -1.77 NASDAQ Adv/Vol/Dec 1038/628 mln/1364 NYSE Adv/Vol/Dec 1321/255 mln/1494

10:30 am : Oil prices were down fractionally ahead of the latest weekly inventory data. They haven't really moved much in the wake of the report, which showed a build of 3.09 million barrels in the face of a consensus call for a build of just 413,000 barrels. Oil was last quoted with a 0.2% loss at $82.65 per barrel.

Natural gas prices are up sharply at the moment. The energy component was last quoted with a 3.2% gain at $3.86 per MMBtu.

Precious metals continue to climb. The continuous gold contract is currently up 0.6% to $1346.80 per ounce. It set a record high of $1349 per ounce overnight. Silver prices set a fresh 30-year high of $23.09 per ounce overnight, but have eased back to $22.91 per ounce to trade with a 0.8% gain. DJ30 +2.42 NASDAQ -15.44 SP500 -1.26 NASDAQ Adv/Vol/Dec 1019/460 mln/1319 NYSE Adv/Vol/Dec 1313/192 mln/1442

10:00 am : The stock market continues to seek direction. As such, it is back near the neutral line.

Though the early indication may suggest otherwise, trade this session should be interesting in that it comes on the heels of a 2% surge by the S&P 500 and there is no more economic data on tap to guide participants.

Weekly oil inventory figures are scheduled to be released at the bottom of the hour. Oil prices are down fractionally at $82.75 per barrel ahead of the report. DJ30 +11.24 NASDAQ -7.10 SP500 -0.24 NASDAQ Adv/Vol/Dec 940/245 mln/1274 NYSE Adv/Vol/Dec 1234/120 mln/1438

09:45 am : The broader market recently worked its way into positive territory following a slightly negative start, but it has since slipped back into the red.

Despite a moderately weak tone to trade, materials stocks continue to show strength. Coming off of a 2.8% surge the sector is up another 0.7% this session. Monsanto (MON 50.83, +2.31) is a leader in the group, even though the company both missed the consensus quarterly earnings estimate and issued downside guidance.

Treasuries are up markedly as the stock market seeks direction. The benchmark 10-year Note is up an impressive 20 ticks, which is enough to drop its yield fractionally below 2.40%. DJ30 +1.74 NASDAQ -8.53 SP500 -1.59 NASDAQ Adv/Vol/Dec 839/156 mln/1289 NYSE Adv/Vol/Dec 1180/87 mln/1436

09:15 am : S&P futures vs fair value: -0.20. Nasdaq futures vs fair value: -4.00. Disappointment over the latest ADP Employment Change has left stock futures to trade flat against fair value after they had been up with modest strength earlier this morning. However, renewed weakness in the dollar has provided some support to premarket trade. The dollar is currently down 0.2% amid strength in both the euro, which is at a fresh eight-month high, and the yen, which hit its best level against the greenback in 15 years this morning. Meanwhile, buying among Treasuries caused yields to hit record lows on Notes with 2-year, 3-year, 5-year, and 7-year maturities; the 10-year Note's yield is at its lowest level since January 2009.

09:05 am : S&P futures vs fair value: +0.20. Nasdaq futures vs fair value: -4.30. Futures for the S&P 500 have come up from their morning lows, but remain weakened by disappointment over the latest ADP Employment Change. Dampened sentiment has also cut into the major bourses of Europe, where Germany's DAX has pulled back to trade with a 0.6% gain. Despite its slip, the German bourse continues to benefit from broad support as Deutsche Post and Volkswagen remain in strong shape. German data indicated factory orders in August spiked 3.4% after they fell 1.6% in July. In France, the CAC has pulled back so that it now trades with a 0.8% gain. BNP Paribas, Societe Generale, and Total (TOT) have been steady sources of support. Britain's FTSE is up 0.6% at the moment. Natural resource plays like Rio Tinto (RTP), Anglo American, and BHP Billiton (BHP) are currently leaders. In eurozone data, the final reading on second quarter GDP showed that output increased 1.0%, unchanged from the prior reading. The euro currently trades with a 0.1% gain against the greenback. It set a fresh eight-month high earlier this morning.

In Asia, Japan's yen climbed to 82.8 yen per dollar -- its best level since 1995. The yen has since weakened a bit so that it trades with a 0.3% gain against the greenback at 83.0 yen per dollar. Meanwhile, Nikkei spiked 1.8% overnight as nearly 90% of its members staged gains. That puts the Nikkei back near the top end of its three-month trading range. Fast Retailing and Tokyo Electron were primary leaders in the move. Canon (CAJ) was atop the short list of declining issues. Hong Kong's Hang Seng also spiked, but it failed to set a new 52-week high. Still, it settled with a 1.1% gain at its highest level since November 2009. Heavyweights like HSBC (HBC), China Mobile, and CNOOC (CEO) were leaders, but Hutchison Whampoa showed marked weakness. Mainland China's Shanghai Composite remained closed for holiday observance.

08:30 am : S&P futures vs fair value: -0.80. Nasdaq futures vs fair value: -5.50. Stock futures have dropped sharply since the release of the report on September ADP Employment Change. The report showed that private payrolls fell by 39,000, which contrasts considerably with the consensus call for an increase of 18,000 by economists polled by Briefing.com. However, data for the prior month was revised upward to reflect an addition of 10,000 payrolls after it had been previously reported that payrolls fell by 10,000. Despite the upward revision to data for August, most focus is on the downside surprise of September since it suggests that some disappointment may be in store for the official nonfarm payrolls report that is due on Friday. The consensus among economists polled by Briefing.com currently calls for no change to nonfarm payrolls for September.

08:05 am : S&P futures vs fair value: +3.70. Nasdaq futures vs fair value: +2.00. A moderately positive tone to premarket trade follows the prior session's big gains. Continued strength has been helped by renewed weakness in the dollar, which is now down 0.2% against competing currencies after it briefly rallied in response to news that analysts at Fitch downgraded Ireland's debt and assigned it a Negative outlook. Still, there is a bit of caution ahead of the ADP Employment Change for September. The report is due at 8:15 AM ET and is expected to offer a glimpse into the always pivotal monthly nonfarm payrolls report from the government (due Friday). A handful of companies are out with quarterly results ahead of earnings season's unofficial start on Thursday evening, when Dow component Alcoa (AA) reports. So far, results have been upbeat with only a couple of disappointments.

06:30 am : S&P futures vs fair value: +2.90. Nasdaq futures vs fair value: +0.80.

06:30 am : Nikkei...9691.43...+172.70...+1.80%. Hang Seng...22880.41...+241.30...+1.10%.

06:30 am : FTSE...5689.61...+53.90...+1.00%. DAX...6274.50...+58.90...+1.00%.

Special thanks to Bloomberg, CNNMoney and Yahoo! Finance for their market summaries. gm

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body analysis)
Image@ http://twitter.com/wrbtrader and http://stocktwits.com/wrbtrader

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