Fundamentals

U.S. Equities Mixed On Another Low Volume Trading Day

U.S. Session Key Developments

•    Crude Oil Falls, Gold Surges to New High
•    S&P Rally Fails to Hold on Low Volume Trading Day

Most U.S. stocks fell today following disappointing earnings from a variety of companies and general concern over the strength of the economic recovery.  U.S. equities followed those of Europe into the red after both U.S. and German economic sentiment fell in November according to the ZEW and IBD surveys.  Approximately eight stocks dropped for every five that rose on the New York Stock Exchange as MBIA, Fluor, and Electronic Arts posted disappointing earnings.  Crude oil and silver both fell alongside equities as each commodity has industrial use and will generally trade in the direction of economic sentiment going forward.  Gold, on the other hand, reached a new historic high as investors remain concerned about the quantitative easing and easy credit that has been supplied by worldwide governments and central banks.

DJIA 30                      10,246.97                   +20.03               +0.20%
The Dow Jones Industrial Average set a 13-month high for a second consecutive day as financial firms Bank of America and American Express rallied over 1.6 percent each.  American Express announced that worldwide spending climbed 3 percent in October, increasing investor confidence in the largest credit-card issuer.  A total of twenty Dow stocks rose today compared to nine total losers.  Boeing fell over 2 percent after Wells Fargo cut the plane builder’s 2010 and 2011 profit estimates.  From a technical perspective, the Dow traded to its top Bollinger Band for a second consecutive day and volume remains weak, possibly indicating a pullback in the near-future.

S&P 500                      1,093.01                       -0.07                 -0.01%
The S&P appeared headed towards its seventh consecutive up-day during the last hour of trading, but ended up selling off its minimal gains by close.  The index fell by a fraction of a point as there were approximately 70 more losers than winners on the day.  MBIA, the world’s largest bond guarantor, fell 27 percent after reporting a wider-than-projected $727.8 million net loss in the third quarter.  Electronic Arts also reported larger losses than expected and shares tumbled 6.4 percent.  Despite these disappointments, approximately 83 percent of S&P companies to report earnings since October 7 have exceeded expectations.  Retailers Macy’s Inc., Wal-Mart Stores Inc. and J.C. Penney Co. are among companies to release results this week.

NASDAQ                         2,151.08                    -2.98                 -0.14%
The tech-heavy NASDAQ ended the session lower as its technology portion fell by a tenth of a percent.  Cisco Systems and Comcast fell over a point each, while Dell fell just under a point on the day.  Adobe Systems announced that it plans to cut 680 jobs, or about 9 percent of its global workforce due to a sales slump.

Written by James Russell, CFD Trading Research