| Index | Last | Change | % Chg |
| DJ Industrials | 13567.87 | -362.14 | -2.60% |
| Nasdaq Comp | 2794.83 | -64.29 | -2.25% |
| S&P 500 | 1508.44 | -40.94 | -2.64% |
| DJ Wilshire 5K | 15261.09 | -412.27 | -2.63% |
| Russell 2000 | 795.18 | -32.84 | -3.97% |
| Nasdaq 100 | 2197.07 | -41.91 | -1.87% |
Comments: Yesterday the response to the Fed cut was a 1% pop across most of the averages, then today on no apparent catalyst we are down 2% plus! It felt like whoever was "pulling the levers" wanted this market to come down. An expected negative earnings report from Exxon, a downgrade of Citigroup or the realization that the Fed may not be cutting further all seem highly suspect as triggers to me. Bill Gross of PIMCO told Bloomberg TV yesterday that today's unemployment claims number was key for the "pros" and tomorrow's often revised BLS employment number is for the "amateurs"...well today's number was "in-line" today so the market sold off big? It doesn't add up to me. So what happens tomorrow? We get a decent employment number and the market rallies? Right now we are sitting on a net negative week-to-date losses on all indexes (except Nas-100 which is showing a miniscule gain of 0.10%). I have a funny feeling that a rally will ensue tomorrow to end the week on positive % gain across all the indexes...with perhaps Russell 2000 the only exception.
If you watched Fast Money on CNBC last night you would have heard Barton Biggs forecast a year-end "stampede" in stocks since his sources tell him that a record low (8%) of hedge fund managers are bullish on U.S. stocks. Doug Kass, the bear, gave his retort to the Biggs comment here. November is shaping up very interesting so far...historically the market is strongest between Nov. 1 - April 1.
| Issues | NYSE | Nasdaq | Amex |
| Advancing | 435 | 566 | 332 |
| Declining | 2,830 | 2,444 | 952 |
| Unchanged | 60 | 84 | 83 |
| Total | 3,325 | 3,094 | 1,367 |
| New 52 WkHigh | 67 | 82 | 35 |
| New 52 Wk Low | 170 | 235 | 32 |
| Total | 1,746,496,320 | 2,568,169,836 | 50,075,522 |
| Advancing | 119,919,620 | 383,827,601 | 10,825,100 |
| Declining | 1,621,957,600 | 2,147,483,627 | 38,039,522 |
| Unchanged | 4,619,100 | 36,858,608 | 1,210,900 |
| Futures | Last | Change |
| Crude Oil | 93.14 | -1.39 |
| Natural Gas | 8.602 | 0.272 |
| Gold, Dec. | 791 | -4.3 |
From Briefing.com:
| Moving the Market |  | Sector Watch |
| Exxon Mobil reports worse than expected third quarter earnings A CIBC analyst asserts that Citigroup may be forced to cut its dividend or sell off assets to meet a $30 billion capital shortfall Financial sector lags, broad-based sell off Core PCE Inflation in-line; weekly initial jobless claims in-line; ISM Index disappoints | Strong: healthcare services Weak: steel; other diversified financial services; thrifts & mortgages; homebuilding; coal & consumable fuels; residential REITs; real estate management & development; diversified banks; multi-line insurance companies; general merchandise stores |
The stock market started November on a sharply lower note. On Thursday, a downgrade of Citigroup (C 38.51, -2.85), a disappointing earnings report from Exxon Mobil (XOM 88.48, -3.52), and a less than stellar ISM Index reading in the wake of Wednesday's questionable rally prompted a broad-based sell off. Yesterday, the stock market rallied following the Fed's decision to cut policy rates by 25 basis points. Briefing.com believes the market got ahead of itself, considering a 25 basis point cut was expected. Additionally, wording in the Fed's directive indicates that future rate cuts are far from certain. Citigroup was downgraded by CIBC to Sector Perform from Sector Outperform this morning. The downgrade, though, isn't the focal point for investors so much as the thesis behind the ratings change. CIBC analyst Meredith Whitney believes that Citigroup will need to raise more than $30 billion in capital over the near-term through either asset sales, a dividend cut, a capital raise, or a combination thereof. Whitney adds that Citigroup's tangible capital ratio stands at just 2.8 percent versus an average of 5.0 percent for its peers. Meanwhile, Exxon Mobil, the world's largest company by market cap, reported its biggest drop in quarterly profits in more than three years. The company reported net income of $9.41 billion or $1.70 per share - four cents below estimates. Economic data were mixed on Thursday. The national ISM survey of manufacturing conditions for October disappointedly dipped to 50.9 from 52.0 in September. This was only a bit below expectations of a 51.5 reading, but gave investors a reason to take additional profits. A reading above 50 is intended to reflect manufacturing growth. The Core PCE Deflator, income and spending for September were generally in-line with expectations. The core PCE deflator for September was up only 0.2 percent, indicating that inflation remains well contained. New claims for unemployment for the week ended October 27 fell to 327,000 from 333,000 the week before. Despite sluggish economic growth, layoffs are low. When the recession started in 2001, claims jumped to 450,000 per month. This won't alter expectations of an 80,000 to 100,000 October payroll gain to be reported tomorrow. All ten of the economic sectors spent the day in the red. Given the negative Citigroup headlines, it was not surprising that the financial sector (-4.6%) was the main laggard. The materials (-3.4%) and telecom (-2.9%) sectors also underperformed. The tech (-1.7%), healthcare (-1.7%) and consumer staples (-1.9%) sectors outperformed on a relative basis. There was risk aversion in the market today as indicated by the rally in bonds and the relative outperformance of the defensive sectors. Also, the small-cap Russell 2000 Index had a steep 4.0 percent drop. Crude oil hit an all-time high of $96.24 in electronic trade, but retreated during the day to $92.86. |
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