Not a bad day today, as investors get a little relief from the selling that’s been dominating the action for the past few days. The Dow Industrials got back 109 points (+1.0%) to 10859, the S&P 500 gained 11 points (+0.9%) to 1266 and the Nasdaq recovered 22 points (+1.0%) to 2267. The Russell 2000 lagged a little, adding 4 points (+0.6%) to 721. The Dow Transports were higher by 1.2%, but the Utilities fell 0.3%. Bonds were lower, and yields higher: the 6-month now yields 4.66%, the 2-year 4.63%, the 5-year 4.55%, the 10-year 4.59% and the 30-year 4.68%.
Market internals surged late in the day, and made the day look a little better than it was looking with a couple of hours to go. Volume ran about the same as yesterday’s levels. Advance/declines were 11 to 8 on both exchanges, and up/down volume was about 15 to 8 on the NYSE and 5 to 2 on the Nasdaq. New highs/lows were 71/34 on the NYSE and 118/32 on the Nasdaq.
More groups up than down, and some groups posted good gains: networking (+3.4%), airlines (+2.2%), disk drives (+2.1%), computer hardware (+2.0%), telecom (+1.9%), internet (+1.6%), drugs (+1.5%), semiconductors (+1.4%), health care (+1.3%), brokers (+1.1%) and transportation (+1.1%). Steel stocks were the only sizeable losers, falling 1.3%.
Energy prices fell slightly again today: crude oil to $62.61/barrel, gasoline to $1.55/gallon and natural gas to $7.69/mBTU. The dollar index was higher by 0.1% to 90.36, and the price of gold held its ground at $551/ounce after yesterday’s big dive.
BMB Note: Not much change here. It wasn’t unusual to get a bit of a bounce after the selling we’ve seen, but it really doesn’t change the outlook just yet. We may very well see a little more bouncing over the next few days. As for now, caution is still recommended. Make the market prove itself here. It has to firm up and prove it can move higher.
And we need to see better action in the groups. The way I see it right now, we have only a few groups in good shape: semiconductors, brokers, defense stocks, and I’ll toss in the energy/commodities for now, although they’re in a sharp pullback after yesterday’s fall, and some of the energies look like they’re rolling over a bit rather than pulling back. I’d remain a little cautious around the energies for now. On the other hand, there are plenty of groups in rough shape: banks, chemicals, consumer/retail, big pharmas, internet, housing, insurance, hospitals, utilities, big-cap tech and big oils. That many groups on shaky ground doesn’t make for a very strong market.