U.S. EQUITIES FALL FOR SECOND SESSION; FAIL TO FIND FOOTING AS FUTURE OF FINANCIALS CONTINUES TO REMAIN IN QUESTION.
U.S. equities fell for a second session, after attempting several rallies, as concerns regarding the viability of the global financial system continue to press on investor confidence and erode the appeal and appeal of riskier assets such as stocks. The major indices swung between gains and losses as a worsening housing picture combined with testimony from Fed Chairman Bernanke stating that the size of the bank rescue package remains uncertain and will depend upon bank “stress tests” as well as continuing developments in the economy. Based on that assessment, it does not offer a lot of surprise that equities failed to find a support level in this no man’s land of multiyear lows.
Equities continue to remain under pressure in the wake of employment data due for release beginning tomorrow and continuing up to the monthly non farm payroll and unemployment number due out on Friday. Staying true to its pattern, the week of the employment data release places a negative tone on the markets, with the additional pressure of a highly publicized closing of HSBC’s North American operations and the loss of nearly 8000 jobs, it would seem that the pattern will hold, with negative sentiment maintaining its grasp on equities until short covering and the digestion of the employment picture takes place.
Energy and material stocks bucked some of the downward trend, as a rebound in crude prices was supported by a longer term speculation that OPEC cuts will continue to take supply off the market during the buildup to the summer driving season. Material stocks posted gains as copper continues to rebound on hopes that China’s stimulus focus will result in the purchase of large quantities of depleted LME (London Metals Exchange) stores of the base metals.
Technically, March Dow futures continue to skate near a significantly oversold level. The market should look to fill in the gap left from 6860. This should be the initial resistance point. If this level holds, look for a test of 6950. Support should settle in near the 6490 level, with a break of this setting up to test 6200.
EQUITY RANGES
OPEN
HIGH
LOW
CLOSE
CHANGE
DJH9 (MARCH DOW)
6825
6845
6666
6669
-121
SPH9 (MARCH S&P)
710.80
712.00
689.00
689.50
-16.00
NDH9 (MAR NASDAQ)
1090.00
1102.00
1070.00
1072.00
-14.00
Prepared by Rich Roscelli & 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.
