Read Larry Connors' blog – Short Term Trading Strategies
The pullback by the Dow followed the Federal Reserve's announcement of its latest decision on interest rates, although the Fed announced no change to its rate target and reiterated its commitment to the quantitative easing measures first announced in March.
The Fed also noted that information received since the April meeting suggests that the pace of economic contraction is slowing. The central bank said conditions in financial markets have generally improved and housing spending has shown further signs of stabilizing.
Some of the day's early optimism was generate by a report from the Commerce Department that showed that durable goods orders for May rose by 1.8 percent, matching a revised increase in April. The increase surprised economists, who had expected a decline of 0.9 percent.
Another notable increase in orders for transportation equipment contributed to the bigger than expected increase in durable goods orders. Orders for transportation equipment increased by 3.6 percent in May, following a 6.2 percent increase in April.
Excluding the continued increase in orders for transportation equipment, durable goods orders still rose 1.1 percent in May compared to a 0.4 percent increase in April. Economists had expected ex-transportation orders to fall 0.5 percent.
In a separate report, the Commerce Department said that new home sales slipped by 0.6 percent to an annual rate of 342,000 in May from a revised April rate of 344,000. Economists had expected sales to jump 2.3 percent to 360,000 from the 352,000 originally reported for the previous month.
On the corporate front, Oracle (ORCL | Quote | Chart | News | PowerRating) said Tuesday after the markets closed that its fourth quarter profit fell about 7 percent from last year, as a stronger U.S. dollar ate into its sales. Nonetheless, the results beat analyst estimates, and shares of Oracle closed up 7 percent.
Contract electronics manufacturer Jabil Circuit (JBL | Quote | Chart | News | PowerRating) announced a third quarter net loss due to restructuring and impairment charges and lower revenues. The company's fourth quarter revenue forecast was also lower than analyst estimates. Nonetheless, the stock rose 2.8 percent on the day.
While the Dow climbed back towards the unchanged line going into the close of trading, it ended the session down 23.05 points or 0.3 percent at 8,299.86. On the other hand, the Nasdaq jumped 27.42 points or 1.6 percent to 1,792.34 and the S&P 500 rose 5.84 points or 0.7 percent to 900.94.
Sector News
Some of the day's best performances were turned in by healthcare provider stocks, as reflected by the 3.7 percent climb by the Morgan Stanley Healthcare Provider Index. With the gain, the index moved well off the one-month closing low it set in the previous session.
Gold stocks also posted strong gains, with the NYSE Arca Gold Bugs Index rising by 3.3 percent for the day. The index moved further off of its worst closing level in nearly two months, helped by an increase in the price of the precious metal, which climbed $10.10 to $934.40 an ounce.
Electronic storage stocks also saw a notable move to the upside, resulting in a 2.4 percent gain by the NYSE Arca Disk Drive Index. The day's advance helped the index continue its move off Monday's two-month closing low.
One of the sector's best performers was Seagate Technologies (STX | Quote | Chart | News | PowerRating), which rose by 2.8 percent on the session. The stock ended the session at its best closing level in well over eight months.
While most other sectors also moved higher, some health insurance and defense stocks finished in negative territory, as reflected by a 1.1 percent pullback by the Morgan Stanley Healthcare Payor Index and a 1.4 percent retreat by the Philadelphia Defense Sector. Notably, the defense index finished at its lowest closing level in nearly two months.
Dow Components
The Dow components finished roughly split, prompting another lackluster finish by the blue chip index.
Aerospace giant Boeing (BA | Quote | Chart | News | PowerRating) extended its weakness for the fourth session in a row falling by 5.8 percent. The day's decline dragged the stock down to its lowest closing price in almost two months.
American Express (AXP | Quote | Chart | News | PowerRating) and United Technologies UTX) also saw notable pullbacks, with both stocks dropping by 2 percent. With the losses, both stocks set fresh multi-week lows.
On the other hand, Alcoa (AA | Quote | Chart | News | PowerRating) saw one of the day's strongest gains, rising by 2.1 percent. The day's climb lifted the stock well off the three-week low set Tuesday.
Intel (INTC | Quote | Chart | News | PowerRating) and DuPont (DD | Quote | Chart | News | PowerRating) saw comparable gains, with both rising by 1.8 percent. While shares of tech giant Intel moved further off their lowest closing level in nearly a month, chemical stalwart DuPont rose further off of its worst closing price in nearly three months.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region ended Wednesday's session on the upside. Japan's benchmark Nikkei 225 Index closed up 0.4 percent, while Hong Kong's Hang Seng Index jumped 2 percent.
The major European markets also closed notably higher, with the French CAC 40 Index and the German DAX Index finishing up by 2.2 percent and 2.7 percent, respectively, while the U.K.'s FTSE 100 Index jumped 1.2 percent.
In the bond markets, treasuries closed moderately lower, showing a notable move to the downside following the Fed announcement. Subsequently, the yield on the benchmark ten-year note finished at 3.685 percent, an increase of 4.5 basis points on the day.
Looking Ahead
Thursday's trading is likely to be impacted by the Labor Department's weekly jobless claims figures for the week ended June 20th. Economists expect the figure to come in at 608,000, unchanged from last week's report. The data will be released at 8:30 a.m. ET.
The Commerce Department will also release its final revision to gross domestic product for the first quarter. Analysts expect the pace of contraction in GDP to be unrevised from the previously reported 5.7 percent drop. The report will also be released at 8:30 a.m. ET.
For comments and feedback: contact editorial@rttnews.com Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
