Not a good day in the stock world. It started off bad, and just never got any better. The major indices all gave up ground, advance/decline numbers were lousy, and the Utilities jumped on the ever-growing ‘breakdown pile’:
| Dow |
12398.01 |
-82.68 |
-0.66% |
| S&P 500 |
1409.71 |
-8.63 |
-0.61% |
| Nasdaq |
2434.25 |
-19.17 |
-0.78% |
|
| Russell 2000 |
775.87 |
-14.08 |
-1.78% |
| Dow Transports |
4612.35 |
-60.72 |
-1.30% |
| Dow Utilities |
447.65 |
-7.91 |
-1.74% |
|
Bonds sold off hard early, pushing yields up, but about half of that move was gone by day’s end. Yields still finished higher, as the jobs report helped change a few minds on Fed rate cuts:
6-month: 5.08% 2-yr: 4.76% 5-yr: 4.65% 10-yr: 4.65% 30-yr: 4.74%.
Market internals start off lousy, and just never got far out of the gutter, but volume fell right around yesterday’s level, if not a little lighter. Advances/declines were 1 to 3 on the NYSE and 5 to 14 on the Nasdaq, with up down volume 1 to 3 on the NYSE and 3 to 7 on the Nasdaq. New highs have been contracted as the market struggles - new highs/lows today were 101/35 on the NYSE and 68/53 on the Nasdaq.
In the groups, the only green to be found was in the energies, which managed to stop the bleeding, at least for now. But those gains were slight, less than 0.5%. Everything else was on the losing side, led by airlines (-2.0%), paper stocks (-2.0%), utilities (-1.8%), telecoms (-1.8%), REITs (-1.6%), disk drives (-1.5%), transportation (-1.5%), insurance (-1.3%), hospitals (-1.2%), retail (-1.2%) and semiconductors (-1.1%).
Crude oil prices bounced after dipping below $55/barrel early in the day, and finished higher at $56.31/barrel. Gasoline held steady at $1.49/gallon, and natural gas gained a couple of cents to $6.18mmBTU. The dollar index gained for the third straight day, moving up to 84.63. The trouncing of the precious metals continued, with gold getting slammed down to $606/ounce, and silver dropping to $12.12/ounce.
BMB Note: More unpredicable, choppy action, that didn’t make a heck of a lot of sense - if the employment report was ‘good’ economic news for the bond market, where the initial reaction was to send interest rates higher, wouldn’t you think that stocks would be pleased that the economy was maybe a little ’stronger’ than originally thought? But no, stocks sold off. Somehow, I’m not buying the notion that stocks were reacting with disappointment that the Fed might not cut rates - seemed more like there was more of an itch to sell a little. If you’re a money manager, so far this year you’re beating the indices by staying in cash - so why would you rush to jump in?
Some of the major indices are starting to show a little stress again, and the utilities broke down hard today. Since the utes had been somewhat of a leading group, that can’t be real good news. The market seems like it wants to test the downside a bit here - we’ll have to see if it really does or not, and how far it might go.
I would be extremely careful about entering new positions on the long side, and I’d be watching my stop zones pretty closely. I’m keeping my eyes open for some short opportunities, but am still a little gun shy. Obviously the energy/commodity areas are pretty sold out short term, so I’ll watch areas like the Transports, which may have ended their bounce today, the REITs, which are thinking about rolling over, and maybe the utilities on a bounce. Just don’t know yet. I’m hesitant to try too much too soon - what I have been trying hasn’t been working very well of late.
So, I have all weekend to dwell on what a lousy week it’s been…
