Equity futures end weekly rally with extended fall off, as earnings and economic data disappoints
U.S. Equities fell for the first time in four sessions as dismal earnings and outlook from major consumer based companies combined with downward volatility in financials and worse than expected reports on new home sales, employment, and durable goods orders all combined to eliminate nearly all of the gains from the last two sessions. In addition, profit taking that began in the European indices also pressured the market, as the next round of U.S. earnings are likely to be concentrated in consumer and energy based industries- two sectors that are likely to report near the low end of expectations. Also waiting in the wings is the specter of the February nonfarm payroll and unemployment which is likely to increase negative sentiment on equities.
Allstate Insurance, a consumer based P&C insurer, posted its first annual loss since becoming a public company. The company’s dividend is possibly at risk as well. Eastman Kodak, Citigroup, BOA all posted double digit percentage losses on present and future earnings. Buy the rumor; sell the fact appeared to come home to hit the financial sector today. Equities were also damaged by a report showing new home sales fell to a near record low level, below 400,000 units. Lower mortgage rates and homebuilder incentives appear to be unable to stimulate the market by traditional means. It is likely that alternative, direct stimulus programs will need to have the opportunity to work.
Technically, March Dow futures broke through its near term support level of 8170 and made a try for the next key level of support at 8080. The market appears to be setting up to hold above this support level and may be setting up for a period of range trading between 7950 and 8190.
EQUITY RANGES
OPEN
HIGH
LOW
CLOSE
CHANGE
DJH9 (MARCH DOW)
8210
8245
8085
8112
-210
SPH9 (MARCH S&P)
856.50
859.50
840.00
842.80
-28.70
NDH9 (MAR NASDAQ)
1216.50
1220.00
1195.00
1206.00
-25.25
Rich Roscelli and Paul Brittain
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may, in the normal course of business, have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
