Waiting on Washington
Index & Sector performance 9/30/13
The Market:
The lack of a deal from Washington on the impending government shutdown seemed to eight on trader’s mind. While the S&P was able to rally after a gap down in early trading, the rally was short lived and around 1:30 pm EST the market again lost ground although was able to remain above the early morning lows
In economic data we had Chicago PMI which came in slight better than expected with a 55.7 reading when 54.5 was expected. Tomorrow we have Final Manufacturing PMI, ISM, Construction spending and Total Vehicle Sales.
In today’s trading the Russell 2000 index was able to just barely make it into the Green but all the other major indices as well as tracked ETF sectors were lower. The least worst on the WSC Scoreboard was the Utilities via the XLU and leading inside that sector today was Edison (EIX) up 0.55%. The bigest losers in the XLU were NRG Energy (NRG) down 1.41% and The AES Corporation (AES) down 1.34%.
Story Stocks:
A nice pop today for Brookfield Office Properties (BPO) as Brookfield Property Partners (BPY) announced they will purchase the remaining outstanding shares they do not own at a price of $19.34 per share. BPO closed up 13.71% on the day.
Also moving on takeover news was Active Network (ACTV) which agreed to be purchased by Vista Equity Partners for $14.50 per share in cash. ACTV closed up 25.53% on the day.
Big loser today was Achillion Pharmaceuticals (ACHN) after announcing Friday that the FDA is keeping a hold on hepatitis C drug sovaprevir which triggered a slew of downgrades you can see below. ACHN closed down 58.29% today.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: WAG, AYI, ATU
Analyst Comments:
Upgrades 9/30/13
Downgrades 9/30/13
Initiations 9/30/13
- Price Target Changes 9/30/13
The Game Plan:
The S&P 500 continues to consolidate after reaching the highlighted longer term MACD trend line. So far the action on the MACD could simply be recycling to set-up the next rally. In the meantime the 50 day SMA held on a closing basis but was lost in intraday trading. Tomorrow should mark the move into a government shutdown and with the headline risk over, shorter term traders can start to look for long opportunities but anything longer than shorter term trades are likely not ideal and waiting for a better set-up, even if that meant paying slightly higher prices, would be better. We have a new moon scheduled for 10/4 and a Bradley turn date on 10/8. That could be a turn window for the market so will be a time cluster to watch.
