Monday, February 11, 2008

Minimalist Movement

Left to their own devices in a beaten down market, investors generally buy stocks. Such was the case on Monday, a day in which a dearth of news and/or economic reports left traders mostly on their own.

After an early mishap - the Dow was down more than 110 points - traders got just enough urging from the PPT to push stocks into the green and kept them there for the duration of the session.

Volume was once again on the "who cares?" side of the ledger, as all but hard-core day-traders and bullish lemmings are content to sit back and wait for the next economic shoe to fall.

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One feature of the recent market is that today marked the sixth straight day that the Dow failed to reach the previous day's high, an indication that the bears are having their way overall.

The president delivered his annual economic report to congress amid much yawning and little else, restating his opinion that the economy was essentially sound (it's not) but there are short-term concerns (understatement of the year).

With few paying attention, the Financial Times released their version of good news, with this story: A repeat of the Great Depression is unlikely - a commentary that was neither concise nor convincing.

Of the Dow stocks, 11 were down and 19 up, with American International Group (AIG, -5.49, -11.72%) taking down insurers and General Motors (GM +1.32, +5/12%) leading the gainers, mostly on valuation.

AIG, the world's largest insurer, faced renewed calls that their exposure to subprime and other risky credit products had been underreported in filings.

Bargain hunters pumped up General Motors, despite reports of engine fires in Chevy Tahoe and Yukon SUVs.

In the broader market, advancers garnered a slender edge over losing issues, 3305-3009, though new lows continued to dominate new highs, 254-92.

Dow 12,240.01 +57.88; NASDAQ 2,320.06 +15.21; S&P 500 1,339.13 +7.84; NYSE Composite 8,868.28 +45.16

Commodities generally priced higher, with crude oil for March delivery registering a gain of $1.82, to end the day at $93.59. Gold added $4.40 to $926.70 and silver gained 36 cents to $17.47, nearly closing off the bargain window which has only been left open less than two weeks.

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The balance of the week looks to be dominated by Fedspeak, as a number of Fed governors, including Chairman Bernanke himself (slated to testify to the Senate Banking Committee), are scheduled to address a variety of groups.

The guvs should take pains to avoid use of the "R" word so as to not spook the markets. Investors are still clearly on edge and it doesn't take much to trigger an avalanche of selling, as we've seen in recent weeks.

Wednesday's retail sales figures, Thursday's initial unemployment claims and Friday's capacity utilization and NY Empire State Index should provide most of the economic chatter.

Earnings reports continue to flow. On Tuesday, Applied Materials (AMAT), General Motors (GM), Schering-Plough (SGP) and Credit Suisse Group (CS) will give traders plenty to mull over, as all but AMAT report prior to the opening bell. Caveat emptor.

NYSE Volume 3,507,467,750
NASDAQ Volume 2,072,297,125

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