Daily Wrap
DJIA +62.90 (+0.42%) to 14,865.14; S&P 500 +5.64 (+0.36%) to 1,593.37; NASDAQ -0.14 (0.00%) to 2,859.07
A brief trip down for the day eventually became a moderate up day for the S&P 500 after having been on a tear. Helping the cause was an Unemployment claims number which came in much better than expected at 346K when I had expectations around 362K. While the highs of the day were made before noon EST, the remainder of the day’s action in the S&P seemed only like a consolidation and factoring in the strength of the recent rally and being at all time highs, I think it digested today well.
Microsoft (MSFT) lost 4.44% today after two firms came out with research suggesting that PC sales declined by double digits in the first quarter of the year. This drop in MSFT essentially brought them back down to where they started a strong rally along with the market in general. Also losing ground on this news was Intel (INTC) which lost nearly 2% on the day also essentially dropping down to its recent breakout level. Getting the worst of it on the news was Hewlett-Packard (HPQ) which lost 6.45% but also remember that HPQ has doubled since December ’12.
In analyst notes today, Boyd Gaming (BYD) was upgraded at Morgan Stanley to Overweight, Adobe (ADBE) was upgraded to Neutral at Goldman with a $48 price target and Hecla Mining (HL) caught multiple upgrades but while Canaccord went to a Buy, Deutsche Bank went to a Hold with $4 Price target. Besides some downgrades on Microsoft (MSFT) based on the weak PC sales and recent rise, two gold names caught downgrades at Societe General, AngloGold (AU) and IAMGOLD (IAG). Some of these and other upgrades and downgrades for the day can be found each morning when I post my 9 @ 9 in the Upgrades/Downgrades section.
Today was small update for the Dow and S&P while the Nasdaq lagged but predominantly due to the PC sales report. Today seemed more like a consolidation day and was warranted after such a strong move. I would like to see some additional consolidation action and as long as the S&P 500 remains above $1575 it has a productive tone. I posted a 4hr futures chart at Stocktwits (WSConsensus) which showed a potential Inverse Head & Shoulders (IHS) pattern and today posted a chart on the S&P 500 cash index showing the target for the IHS is roughly $1605. Doesn’t mean we are going there but definitely looks to be an option, especially after a consolidation. Depending on how it plays out that could be a level from which we then see a larger, in price & time, pullback.
