Nasdaq Holds the Line for U.S. Markets

[Excerpted from Bill Cara's Daily Report]

The NASDAQ managed to hold the line for the US equity market. Utilities and Energy (XLU -1.6%, XLE -1.5%) pulled the DJIA and S&P lower. At the closing bell, the S&P 500 (979.62 -2.56 -0.26%) and the DJIA (9,096.72 -11.79 -0.13%) dropped a tad while the NASDAQ Composite (1,975.51 +7.62 +0.39%) was higher, but not by much. The recent short-term S&P high follows a lower low, which must be tested soon.

Healthcare (XLV +0.7%) was the leading sector, pulled up by Hospitals ($RSH +3.8%). Aetna (AET +12.6%) was the leading Cara 100 company stock. On the down side, lower commodity prices, affected by a Fed supported US Dollar early in the day, negatively impacted Goldminers ($XAU -4.0%) and Oil Services ($OSX -2.6%).

On Monday, Aetna had acknowledged problems with the recession and rising costs. The company also lowered guidance. The stock dropped almost -3%, and so Tuesday’s move was unexpected.

The $USD (78.88 +0.24 +0.31%) was given some support and the Yen (105.76 +0.68 +0.65%) was even stronger against the Dollar. The Euro (141.74 -0.69 -0.48%) and Pound (164.34 -0.65 -0.39%) were losers against the Dollar and the Yen, which also pulled the commodity prices down.

The Crude Oil price on Tuesday was weaker ($WTIC 67.23 -1.15 -1.68%) following the surge in the Dollar. Wednesday morning Crude is also softer (65.82 -1.41 -2.11% 07:24am ET), which is a significant drop in 24 hours.

$GOLD on Tuesday was hammered in the space of an hour, ($GOLD 937.50 -16.20 -1.70%), and Wednesday morning was down a bit in the spot market (934.56 -4.24 -0.45% 07:35am ET).

In the commodity price affected Canadian equity markets Tuesday, the Toronto Composite (10,570.54 -186.89 -1.74%) and Toronto Venture bourse (1,128.11 -18.93 -1.65%) were hit hard. But like Friday and Monday, the Cdn Loonie was a winner, although it gained only +1 basis point (92.55 +0.01 +0.01%) on the day.
http://stockcharts.com/charts/gallery.html?$CDW

The US long bond ($USB 115.95 +0.44 +0.38%) recovered from Monday’s loss. Treasury yields for the 30-year (4.559 -0.54 -1.17%) and 10-year (3.688 -0.25 -0.67%) were lower, but were higher for the 5-year (2.599 +0.25 +0.97%) instruments.

The Treasury bill yield gained a tad to 0.185.

Earlier Wednesday, Austral-Asian markets gave quite a surprise as China stocks in Shanghai (3,266.4 -5.00%) and also on Hong Kong (20,135.5 -2.37%), where most of the big cap China-centric company stocks trade, were hammered. But, significantly, Japan’s Nikkei 225 (10,113.2 +0.26%) was up. Australia (4,148.9 -0.60%) and India (15,173.5 -1.03%) took China’s lead in selling off. This issue in China seems to be that traders are getting nervous with the RSI-7’s in the mid-80s and even 90’s, which is unsustainable, so profit-taking swept over the market late in the session, which sent prices down to a low of about -8% at one point.

Then the European bourses rebounded: the French CAC (3,381.0 7:33AM ET +1.50%), German DAX (5,275.5 7:18AM ET +1.95%) and FTSE 100 (4,574.7 7:18AM ET +1.01%) were all up sharply in the mid day. Chemicals, as usual, were strong.

Earlier Wednesday morning in the spot (cash) market, gold, palladium, platinum and silver were a tad lower, but not breaking down below yesterday morning’s low: (934.56 -4.24 -0.45% 07:35am ET); (254 -1 -0.39% 07:35am ET); (1176 -22 -1.84% 07:35am ET); and (13.5700 -0.0825 -0.60% 07:35am ET), respectively. Prices have been volatile in the past 90 minutes.

The US equity market has just opened – down about -0.6% across the board, which could set up a later in the morning bounce.

Comments

[ksmithdc:]

Thanks for an interesting read, Bill.

Jul 30 12:51 PM