The bears owned the session from start to finish except for a minor attempt at a bounce between 2 and 3 p.m. EST. It looks like the biggest three day decline since March. On the NYSE declining issues outnumbered advancers by a whopping 10.3 to 1. The NASDAQ was not nearly as severe with a ratio of 3.5:1.00. Extreme readings usually foreshadow market turns, however, the NAZ reading does not qualify as extreme.Market Internals:
The Dow decreased 1.48% closing at 13267, the Nasdaq was down 1.77% to finish at 2541, and the S&P was down 1.76% to finish at 1491. Leading sectors included: Photo Products +0.77%, Healthcare Services +0.46%, Drug Retail +0.15%, Health Care Suppliers +0.04%, Airport Services +n/a. Lagging sectors included: Industrial REITS -4.5%, Special Consumer Services -4.3%, Homebuilding -4.2%, Construction and Engineering --3.9%, Office REITS -3.8%. Today's movement came from lower than avg volume on the NYSE and higher than avg on the Nasdaq (NYSE 1480, vs. 1513 avg, Nasdaq 2444, vs. 2022 avg), with decliners outpacing advancers (NYSE 271/3013, Nasdaq 668/2370) with new lows outpacing new highs (NYSE 40/104; Nasdaq 80/86).
In addition to higher volume, we closed on the lows of the session (thanks to Pimco's Bill Gross late day bearish comments). The technical damage is a broken trendline, however, we should get some sort of technical bounce at the 50 DMA level. I would expect that we will retest the trendline from the underside in the very near term.
The McClellan oscillator is approaching oversold, however, here again extreme readings seem to occur more frequently in the oversold zone than the overbought as depicted in the chart above .
Trade Balance tomorrow at 8:30
Companies moving in after hours trading in reaction to earnings: Trading Up: NSM +10.0%; CAE +6.4%; HRLY +3.4%; GENT +1.1%; NMGC +1.0%... Trading Down: QSII -1.5%... Companies moving in reaction to news: Trading Up: YMI +5.6% (Cleared to Initiate Clinical trial of Nimotuzumab in Children with inoperable recurrent Brain Cancer); QCOM +1.7% (Broadcom wins bid to block mobile phones with Qualcomm chips, order doesn't affect types of phone imported before June 7th- Bloomberg); ACTL +1.3% (reaffirms Q2 revs of flat to plus of minus 2%; co's stock options review is still ongoing); BRCM +1.3% (wins ITC order barring certain Qualcomm baseband chips and cellular phones from importation into the U.S.); UNH +1.3% (and Adventist Midwest Health reach new multi-year agreement); BRS +1.2% (announces pricing of 7 1/2% $300 mln senior notes due 2017); LNC +1.1% (to explore strategic options for media business)... Trading Down: OPWV -4.1% (Harbinger clarifies tender offer price and announces an extension of its tender offer for Openwave).
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