David Fry's Daily Market Outlook

 |  Includes: AAPL, EWP, IEF, IFN, IYR, QQQ, WMT, XLY
by: David Fry

Apple Computer Inc. (NASDAQ:AAPL) led things off negatively for tech today by featuring a downgrade from buy to hold. That took the rest of the tech sector lower:

Wal-Mart Stores Inc. (NYSE:WMT) surprised investors by reporting somewhat lower than expected sales with monthly data at 1.8% vs. the expected 1-3% forecast. While that seems in-line, there were hopes for even higher numbers since the previous year was noted for heavy Katrina related sales. So hopes were high but dashed. It didn’t seem to affect the consumer sector negatively however:

Elsewhere factory activity fell as measured by the ISM index (52.9%), but stayed above 50% which indicated continued expansion at a slower level. At the same time construction spending rose 3%. But, inside the numbers, residential construction fell 1.5% making it a 14% decline year over year. Pending U.S. home sales rose 4.3% in August, no doubt caused by a drop in mortgage rates and buyer incentives (ahem, price drops).

Bond and equity investors will be scrutinizing important employment data due on Friday. Just remember, the chart below reflects the reality of housing to employment data. This is the early warning chart that astute bears are monitoring.

Meanwhile, overseas markets, particularly in Europe are behaving well.

September was supposed to be a crummy month for stock market investors -— but it was good. October isn’t supposed to be any better. Go figure? But that’s why they play the game!

Disclaimer: The ETF Digest maintains positions in iShares Dow Jones US Real Estate ETF (NYSEARCA:IYR), iShares Lehman 7-10 Yr Treasury Bond ETF (NYSEARCA:IEF), iShares MSCI Spain (NYSEARCA:EWP) and India Fund Inc. (NYSE:IFN).