Friends
Stocks suffered losses for the third day in a row, as bond yields in Spain and Italy spike and domestic economic conditions continue to slow. Today’s report from the Richmond Fed was much worse than expected, showing contraction with a minus 17 number (expectations were for a flat number). New orders fell and backlogs are continuing to contract. On a positive note home prices rose .8 % for the month, the best increase in over 3 years. Housing seems to be trying to come back to life, which would help, but until the employment picture brightens it is difficult to believe that housing is totally out of the woods.
For the day, the Dow Jones Industrial Average was down 104 points to finish the day at 12,617, after, once again, being down nearly 200 points. The S&P 500 was down 12 points to close at 1338. Gold was up $4.40 to trade at $1581 per ounce, while oil was up $.55 to trade at $88.69 per barrel WTI. As for the S&P 500, even though we seem to rally in the last hour of each down day, cutting the losses, we are still doing technical damage. Now, 1342 has been violated, and the next support level looks to be around 1335. We’ll keep an eye on the technical damage and let you know how the rest of the week unfolds.
On the earnings front, we continue to see companies doing well on the bottom line, but revenues are definitely disappointing. Stocks that had been trading up into earnings seem to sell off afterwards, and those that had already experienced selling seem to bounce once the news is out. Once again, expectations are driving stock prices.
Have a nice evening everyone.
