Closing Update for Thursday, June 16

4:16 PM, Jul 16, 2009 --

• NYSE up 49.8 (0.8%) to 6,043.05.
• DJIA up 95 (1.1%) to 8,710.
• S&P 500 up 8 (0.9%) to 940.69.
• Nasdaq up 22 (1.2%) to 1,885.

GLOBAL SENTIMENT

• Hang Seng up 0.57%
• Nikkei up 0.81%
• FTSE up 0.46%

UPSIDE MOVERS

(+) UFPI beats with Q2 results.

(+) AXP gets upgrade.

(+) HOG rebounds from early decline; reports earnings below year ago, cuts shipments outlook.

(+) BFRM gets FDA okay for mixing Lidocaine with RADIESSE Dermal filler.

(+) SNDK gets favorable coverage from Jim Cramer.

(+) MOS jumps as Vale reportedly mulling bid.

(+) KNL turns higher; reports nearly in line with Q2 results.

DOWNSIDE MOVERS

(-) MOT gets analyst downgrade.

(-) NOK reports results below year-ago quarter.

(-) JPM slips after earnings beat; had gained sharply in lead-up to report.

(-) MAR guides for Q3 below Street.

MARKET DIRECTION

Stocks end near the best levels of the day. The Dow Jones Industrial Average closed up 95.1 points, or 1.1%, to 8,710, just a few ticks off the high of the day. The Nasdaq Composite closed up 22 points, or 1.2%, at 1,885, the high of the session. The S&P 500 is up 8 points, or 0.9%, to 940.69, just off the high. Among the factors contributing to the afternoon rally were comments from well-regarded professor Nouriel Roubini who said the U.S. economy would emerge from recession toward the end of the year.

Stocks traded mixed earlier as investors grapple with the latest earnings reports and attempt to decipher crossed signals on the economy from the latest reports on jobless claims, foreclosures and Philly Fed data.

The Philadelphia Fed's manufacturing index slipped to negative 7.5 in July from negative 2.2 in June. Economists were expecting a slide, but the drop was more than the expected negative 3.3 reading. The index has jumped from negative 22.6 in May to negative 2.2 in June and analysts thought this probably overstated the improvement. The Philly Fed index has been below zero since last September.

The number of initial claims in the week ending July 11 fell 47,000 to 522,000 - the lowest level since early January. The less-volatile four-week average of initial claims fell 22,500 to 584,500. The four-week average smoothes out some distortions in the week-to-week data. For the week ending July 4, the number of Americans receiving state jobless benefits fell 642,000 to 6.27 million.

But the number of U.S. households on the verge of losing their homes soared by nearly 15% in the first half of the year as more people lost their jobs. The mushrooming foreclosure crisis affected more than 1.5 million homes in the first six months of the year, according to a report released this morning by foreclosure listing service RealtyTrac Inc.

The possible bankruptcy of small-business lender CIT Group Inc. (CIT) could throw a wrench in the nascent recovery. While the impact on the financial system might be small, CIT could trigger a cascade of small business bankruptcies that could deepen and prolong the recession. CIT is still working feverishly to line up $2 billion to $3 billion in financing to avoid going under, CNBC.com reports. Some retail stocks were pressured on the CIT news because many retailers borrow from the finance company.

Comments

[Mad Hedge F...:]

OK. .The “head and shoulders” is off the table, and now the S&P 500 is looking at a double top at 950. This is why I hate listening to technical analysts, and why they shop at Men’s Warehouse and drive Hyundai’s instead of Bentley’s (see my earlier piece at www.madhedgefundtrader...). Generally, technical analysts tell you to buy every rally, sell every dip, and in a market that’s going nowhere this is a perfect formula for losing money. Watch them tell you to load up if we hit 950. It is clear from the ferociousness of the 70 point, three day rally that too many hedge funds were drinking the Kool Aid, and the blood is flowing as a result. One meekly explained to me that “head and shoulders” formations fail only 6% of the time. Well, welcome to the 6%. They are going to have to invent a new name to describe this formation (“head and shoulders with a hump back?). This is why I issued my now famous “Sell in May and Go Away” piece at www.madhedgefundtrader..., because the quality of the trades you usually get in the three months that follow is uncommonly low. Look at the chart that has ensued so far at www.madhedgefundtrader...). It looks like a lot of nothing.

Jul 16 05:36 PM

[Screwloose:]

Epic fail by the tape-painting boyz this afternoon. They went too soon, got ambushed, couldn't hold on and the S&P ended up lower than when they started.

Timing chaps; it's all in the timing.

Jul 16 06:06 PM

[The Too Sma...:]

Did you see that 30 million shares selling on SPY at the last 15 minutes of the market today? GS and the like kicked in selling now that they are ready to drive the market down I supposed. No wonder they made so much money. I claim part of that is my money and you GS mother-f_____ better give it back to me.

Jul 16 08:19 PM

[The Too Sma...:]

The H & S is not dead. Remember we have a double left shoulder. Top today would have gotten too high but for the last 15 minutes selling which take it right back into the right shoulder. We are to have double right shoulders I suppose.

Jul 16 08:22 PM

[DumbAss:]

why are you guys blabbering on about H&S when it is clearly now a megaphone :)

Stands out a mile (and I'm only an amateur), and megaphone is bearish so hang onto your SDS. I did (famous last words..)

Jul 17 01:02 AM