Stocks closed higher for the second consecutive day Wednesday, but at the end of the session, it was touch-and-go as to whether some late profit-taking would rob the major indices of a gain. And, like Tuesday, the financial stocks led the list of winners.
Citigroup (C) was first on the list of Dow (DJI) winners, up 6.2%, and JPMorgan Chase (JPM) rose 4.6% after a key official there said that, like C, it too had been profitable in the first two months of the year.
The healthcare group was yesterday’s worst performer, down 2.0%, and Pfizer (PFE) led the group, off 2.29%, due to Moody’s (MCO) lowering its credit rating to Aa2 from Aa1.
The technology sector was mixed, but Apple Inc. (AAPL) rose 4.57% following the introduction of the new smaller four-gig iPod Shuffle. But observers aren’t exactly sure how to classify the new gadget — is it a netbook (tiny notebook) or is it an iPod Shuffle?
Apple created even more rumors when AppleInsider said that an order of 10″ screens may become part of the anticipated Newton/Web tablet. Even without Steve Jobs, Apple seems to keep the rumor mills rolling, garnering interest in its products and stock.
With little more in the way of news, the Dow Jones Industrials (DJI) eked out a gain of four points, closing at 6,930. The S&P 500 (SPX) was up two points at 721, and the Nasdaq (NASD) rose 13 points to 1,372.
On the New York Stock Exchange 1.7 billion shares traded, with advancers ahead of decliners by a margin of 3-to-2. The Nasdaq traded 808 million shares, with advancers just narrowly ahead of decliners.
The April crude oil contract fell $3.38 to $42.33 a barrel, while the Amex Energy SPDR (XLE) closed at $40.66, off 17 cents.
The April gold contract rose to $910.70 an ounce, up $14.80, and the PHLX Gold/Silver Index (XAU) gained $5.97 to $115.94.
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What the Markets Are Saying
Tuesday’s 6.4% rally on the S&P 500 (SPX) was the best single day in almost four months, and an internal indicator, the NYSE A/D ratio at 12.75, registered its highest number since Oct. 13. Also, volume was above the average volume of the past three months and was more than 40% over Monday’s volume on the NYSE.
Most analysts attributed the rally not only to very oversold readings but primarily to the announcement of profits by Citigroup (C) for both January and February. But if that’s the case, why then didn’t the market follow through yesterday afternoon when JPMorgan Chase (JPM) said that it too scored profits in those months?
Instead stocks rose slightly on the announcement and then headed south. The day’s advance was only won by running out of time — just a couple of more minutes and the Dow (DJI) would no doubt have been in negative territory.
Perhaps we will have a continuation of Monday’s buying, but yesterday afternoon’s tape action was horrible, with so little follow-through that I’m inclined to believe that, unless the major indices can put together several strong days and close above the 20-day moving average at SPX 749, this rally has already failed.
Today’s Trading Landscape
Earnings to be reported include: Aeropostale, Aldila, American States Water, Arena Pharmaceuticals, BioMimetic Therapeutics, Cadence Pharmaceuticals, Cardiac Science, CECO Environmental, Central Vermont Public Service, China Fire & Security Group, Citizens and Consolidated Communications.
Double Eagle Petroleum and Mining, E-House (China) Holdings Ltd, Endeavour Int’l Corp, Enert, Enzo Biochem, Flow Int’l, Fushi Copperweld, Global Partners LP, Global Sources Ltd, Gramercy Capital Corp, Herley Industries, Hibbett Sports and HQ Sustainable Maritime Industries.
IMAX Corp, Incredimail Ltd, InterNAP Network Services Corp, Interstate Hotels & Resorts, Javelin Pharmaceuticals, LIN TV Corp, LSB Industries, Luxotica Group, MDS, Medifast, Meridian Resource, Metalico, Methode Electronics, Micromet, Nash Finch Co, Nevada Gold & Casinos, NGP Capital Resources Co, Nobility Homes and NxStage Medical.
Ocean Power Technologies, Ocwen Financial, Orexigen Therapeutics, Orthovita, Pacific Sunwear of California, PowerSecure Int’l, Primedia, Princeton Review, Provident Energy Trust, PURE Bioscience, QAD, Raven Industries and ReneSola Ltd.
Safeguard Scientifics, SeaChange Int’l, Shuffle Master, Simcere Pharmaceutical Group, Smith & Wesson Holding Corp, Smithfield Foods, STEC, Stewart Enterprises, SureWest Communications, Transglobe Energy Corp, Universal Display, Winland Electronics, and Zumiez.
Several economic reports are due today including: initial jobless claims for the week of March 7 (the consensus expects an increase of 6,000), February retail sales (the consensus expects a 0.3% drop), February retail sales excluding autos (the consensus expects a 0.2% increase), January business inventories (the consensus expects negative 0.9%), DJ-BTMU Business Barometer for Feb. 28, and EIA Natural Gas Inventories for March 4.
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