Bears continue dominance, sending Dow ($INDU) below support. The Dow fell 125.18 points Thursday to close the session at 10,278.75. The S&P 500 ($SPX) gave up 11.74 points to 1,162.05. The Nasdaq ($COMPQ) continued to fall, down 27.66 points, or 1.4 percent, to 1,946.71. Volume was heavy with the NYSE trading 1.89 billion shares and the Naz turning over 1.93 billion shares. Market breadth was sharply negative by a 7-to-25 and 7-to-23 margin on the Big Board and Naz respectively.
Earnings news was one problem for stocks today after Apple Computer (AAPL) and Advanced Micro Devices (AMD) announced last night. Both stocks saw declines Thursday on what was viewed as disappointing outlooks. AAPL was able to best expectations for the quarter, but its outlook was not up to par. Apple is its own worst enemy, with expectations sending the stock higher this past year. On Thursday, AAPL shares fell nearly 10 percent to close at $37.26.
Shares of AMD fell 4.69 percent after the chip maker announced a loss in the first quarter. This was unexpected and took a toll on the stock even though AMD announced it would move to offer its flash memory division in an IPO. Overall, the Philly Semiconductor Index ($SOX) fell 1.55 percent, closing below 400 for the first time since January.
Oil prices briefly moved below $50 a barrel today, but ultimately closed with a gain of $0.91 to $51.13. Analysts feel this bounce was a bit of short covering and isn’t the start of a new bull trend. Recent comments from various sector experts have provided a bearish view for oil prices and this has resulted in a sharp decline in the past ten sessions.
There were some key technical events Thursday, including a break of support by the Dow. On Wednesday, the Dow moved below 10,400, but was able to recapture it by the close. On Thursday, this break held and did so on rather strong volume. However, the SPX was able to remain just above support at 1,600. The SOX also broke support at 400. All this points to further declines in the future, but how earnings fare in the weeks to come will be the key. However, after the bell, IBM (IBM) disappointed, sending the stock down sharply in after hours trading.
Jody Osborne Senior Staff Writer & Options Strategist Optionetics.com ~ Your Options Education Site
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