Closing Update for Friday, July 24: Salvaging a Gain

4:11 PM, Jul 24, 2009 --

• NYSE up 34.92 (0.6%) to 6,337.44.
• DJIA up 23.9 (0.3%) to 9,093.
• S&P 500 up 2.9 (0.3%) to 979.26.
• Nasdaq down 7.6 (0.4%) to 1,966.

GLOBAL SENTIMENT

• Hang Seng up 0.83%
• Nikkei up 1.55%
• FTSE up 0.37%

DOWNSIDE MOVERS

(-) MSFT sees continued downside reaction to evening earnings miss.

(-) AMZN remains lower but off worst levels following disappointing results.

(-) ERIC misses with results.

(-) DECK beats with Q2 profit but disappoints with outlook.

(-) RIGL says rheumatoid arthritis trial fails to meet primary endpoint.

(-) SLB lower as earnings sharply below last year, beat Street.

UPSIDE MOVERS

(+) ACI misses Q2 estimates.

(+) IMMU partners with Alexis Biotech to develop cancer, AIDS vaccines.

(+) SPWRA leading broad solar-sector gains after results.

(+) CIT seeks to avoid bankruptcy through amended note offering.

(+) ALGN beats with Q2 results.

(+) LJPC says BioMarin suit dismissed.

(+) IR beats with Q2 and guides above Street.

(+) BDK beats with Q2, offers mixed guidance.

(+) SEPR easily beats with Q2 results, hikes guidance.

MARKET DIRECTION

Major stock averages close mixed, with the Nasdaq Composite snapping a 12-day run. Microsoft (MSFT) and Amazon.com (AMZN) were a drag on the broader tech space after their respective revenue disappointments.

The DJIA scratches out a narrow gain and ends up 4% for the week. Its two-week gain is the strongest for the blue-chip index since 2000. The S&P 500 and the Nasdaq both advance some 4% for the week, as well. That advance keeps the S&P 500 at levels not seen since last November.

A pullback was expected today amid profit-taking ahead of the weekend, after the Dow and the Standard & Poor's 500 index soared 11% over the past nine days. Earnings reports are the key drivers and mixed results late in the week held investors at bay after an earnings-driven march began last week. Retailers will provide more insight into the economy next week.

The slide by major stock indexes picked up after a key index of consumer confidence fell to 66.0 in July compared with 70.8 in June. The index still managed to top economists' expectations and was up slightly from an earlier July reading of 64.4.

On Capitol Hill, Treasury Secretary Timothy Geithner, and Federal Reserve Chairman Ben Bernanke squared off in a public dispute on who should become the top U.S. consumer watchdog. In testimony prepared for a House hearing, Geithner said it was important to strip the Fed and other regulators of their consumer protection duties and create a new federal agency dedicated solely to such a mission. Bernanke disagreed, saying that the Fed is best suited to the task.

Separately, Geithner told the French newspaper Le Monde in an interview today that he is more optimistic on the economic outlook than he was three months ago. But earnings are shaping investor sentiment and after a strong gain yesterday, profit taking may also be on tap ahead of the weekend.

American Express (AXP) reported lower profit while Capital One Financial Corp (COF) reported a third quarterly loss because of weak consumer spending. The companies said rising customer delinquencies cut Q2 earnings, and the stocks are down 2.41% and 3% respectively.

On the tech front, Microsoft posted a steeper-than-expected 17% drop in quarterly revenue. Amazon fell after its sales missed analyst estimates.

Solar stocks were a rare bright spots in today's trading, with the sector up across the board, as earnings reports or guidance from such companies as SunPower (SPWRA) and China Sunergy Co. Ltd. (CSUN) provide lift. LDK Solar Co. Ltd. (LDK) also made a strong move at the bell and is up near 10% after the Chinese company lifted its Q2 revenue and shipment guidance.

Comments

[Moon Kil Woong:]

Another day of light trading reflecting little in the way of real market fundamentals. We need to see either a resumption of normal non-program trading volume or a giant spike in volume to solidify some lasting gain or a reversion back downwards.

Jul 24 07:43 PM

[wendling_r:]

You are wrong in your assessment of the market today and recently. Specialists and their system want the market to move higher on light volume as it has done in recent weeks. This allows them to manipulate stocks higher without the participation of the average investor because they are out on summer vacation and not paying attention to their investments. Then when September comes around volume will increase dramatically along with the advance of the DJIA. This will indicate the end of the current market rally as those same specialists will be selling out their personal trading accounts and then selling short preparing the market place for the sharp decline I am expecting in the later part of the year.

For more information on how the system is able to manipulate the market as it is now and more information on what I expect in the DJIA click on the website attached to this posting and read the recent market reports on the Dow.

You will be amazed on how the system works.

Richard W. Wendling

Jul 24 08:21 PM

[enigmaman:]

The recent stock market rally started when investors realized " We would not fall into the abyss", then the market started to run up based on very bad financial reports that could have been worse, it continued its run based on companies ability to post profits and survive through drastic cost cutting measures, and now they may have run into a wall, we could be at the markets tipping point, with the market considered fully valued, the market mayl retest recent lows if investors continue to believe this will be a jobless recovery, which means companies will only be profitable if they continue to rob Peter to pay Paul, that being the case investors will want to lock in recent ousttanding gains and stampede for the exit door.

Jul 25 07:40 AM

[MarvinMBA:]

Market gains so far not withstanding, it seems as soon as a bit of good news comes along we start the upward momentum....this is the time to buy before the evidence comes in that we are on a positive trajectory. If we do get inflation and reduced unemployment stocks will be the place to be as well as gold...MarvinMBZ

Jul 25 08:44 PM