China fears helped send market lower
Index & Sector performance 10/23/13
The Market:
Today was a gap own and meander day where the majority f the losses were seen in very early trading and the rest of the day was mostly choppy. News attributed the drop to tightening fears out of China which sent international markets lower but as we have discussed here the market seemed ripe for a pullback. More lower..
In economic data there was not too much today with import prices coming in roughly as expected while the Home Price Index was well below expectations (0.3% vs 0.8%) . Yesterday we had the Non-Farm jobs coming in well below expectations (148K vs 182K) expectations but saw the Unemployment rate drop 0.1% (possibly due to discouraged workers). Tomorrow we get Flash Manufacturing PMI as well as New Home Sales and things get started with the Trade Balance data at 8:30 am EST.
Leading today on the WSC Scoreboard was the Transportation index (IYT) closing up 0.7% and leading on the downside was Energy (XLE) losing 1.47%. Leading inside the IYT was Norfolk Southern (NSC) closing up 6.77% and Kansas City Southern (KSU) up 2.39%.
Story Stocks:
Boeing (BA) reported EPS of $1.80 vs $1.55 expectation and on better than expected review of $22.13B vs $21.68B. BA closed up over 5% on the positive report and closed at fresh 52 week highs.
Moving in the other direction after reporting earnings was Caterpillar (CAT) after reporting EPS of $1.45 vs $1.67 on revenue of $13.42B vs $14.32B. CAT closed down over 6% on the news.
Corning (GLW) has been a relatively quiet stock but shocked investors today with a 14.14% gain after announcing the company will take full ownership of its joint venture with Samsung, Samsung Corning Precision Materials Co. Ltd. Samsung will receive $1.9 billion worth of preferred shares in GLW for their 43% stake. GLW also announced that Samsung will be using their Gorilla Glass until 2023 and if that wasn’t enough they topped it off by announcing an additional $2B share repurchase program.
Other notable names moving on earnings included Apollo Group (APOL) up 27.98%, Cree (CREE) down 16.89% and Juniper Networks (JNPR), down 6.43%.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: MMM, MO, F, CELG, CL, DOW, PCP, BEN, MCK, NBL, SIRI, RTN, HSY, CAB, IP, BSX, XEL, HOT, XRX, LUV, UAL
Analyst Comments:
Upgrades 10/23/13
Downgrades 10/23/13
Initiations 10/23/13
Price Target Changes 10/23/13
The Game Plan:
Today’s move lower so far looks contained but long traders should still exercise caution and losing the previously noted levels of $1720 and $1700 could start to become concerning for the market on the long side. Negative divergence is starting to build on the RSI while the MACD does not have as bearish a tone.
