Thursday, July 03, 2008
Enter the Bear
The major market indices entered into bear market territory Wednesday as stocks fell heavily again. The Dow gave up 166.75 points to close the session at 11,215.51. The SPX fell 23.39 points to 1,261.52. The The Nasdaq lost 53.51 points to finish on 2251.46. We have no play on.
Wednesday was not a good day at the office for the markets.
Both the Dow and the Naz officially entered bear market territory Wednesday, closing 20 percent below their October highs. The SPX is now just 10 points away from this decline as well. Wednesday’s losses came as oil prices moved to record highs and traders got disappointing news dealing with the jobs market. Merrill Lynch (MER) was in the spotlight and fell over 3% on the news that they would have more writedowns and Microsoft (MSFT) fell as it continued its "will they won' they" courtship with Yahoo (YHOO).
Oil prices hit a high of $144.15 before closing with a gain of $2.60 a barrel to $143.57. Crude inventory levels fell by 2.0 million barrels for the week ending June 27. In the past year, demand has fallen 1.7 percent, yet prices remain at record levels and this is a huge concern for the Fed and traders alike.
In economic news, the ADP Employment report showed a decline of 79,000 nonfarm private payrolls in June. This was much worse than expected, lowering expectations for Thursday’s payrolls report. However, data on factory orders was solid, rising 0.6 percent. This, along with a better than expected ISM Mfg. Survey, has helped alleviate some concerns about the manufacturing sector.
We see the payroll data later today and an ECB (European Central Bank) interest rate decision. Also today is half day trading in the markets.
Where does this latest drop leave us. Not sure really. I was looking at some plays yesterday which looked ok but I'm afraid its back to the drawing board.
Until next time.
Wednesday was not a good day at the office for the markets.
Both the Dow and the Naz officially entered bear market territory Wednesday, closing 20 percent below their October highs. The SPX is now just 10 points away from this decline as well. Wednesday’s losses came as oil prices moved to record highs and traders got disappointing news dealing with the jobs market. Merrill Lynch (MER) was in the spotlight and fell over 3% on the news that they would have more writedowns and Microsoft (MSFT) fell as it continued its "will they won' they" courtship with Yahoo (YHOO).
Oil prices hit a high of $144.15 before closing with a gain of $2.60 a barrel to $143.57. Crude inventory levels fell by 2.0 million barrels for the week ending June 27. In the past year, demand has fallen 1.7 percent, yet prices remain at record levels and this is a huge concern for the Fed and traders alike.
In economic news, the ADP Employment report showed a decline of 79,000 nonfarm private payrolls in June. This was much worse than expected, lowering expectations for Thursday’s payrolls report. However, data on factory orders was solid, rising 0.6 percent. This, along with a better than expected ISM Mfg. Survey, has helped alleviate some concerns about the manufacturing sector.
We see the payroll data later today and an ECB (European Central Bank) interest rate decision. Also today is half day trading in the markets.
Where does this latest drop leave us. Not sure really. I was looking at some plays yesterday which looked ok but I'm afraid its back to the drawing board.
Until next time.
# posted by Paul @ 6:15 AM 
