Wednesday, February 10, 2010

Looking In The Rear View Mirror

· Equity Levels: SP500 dips 2.3 points/0.2% to 1068; the Nazz fell 0.139%; the DJIA fell 0.2%.

· Desk Color – volumes/activity VERY quiet all day, esp. into the afternoon (the pace of trading today rivaled some holidays). Combination of quiet corporate/eco newsflow and the NE snowstorm made for a non-event session. There was an important release from the Fed/Bernanke discussing exit strategies that caused a brief scare (due to the remark about raising the discount rate) but upon further review the commentary was very consistent w/expectations (“low for long” reiterated re the Fed Funds and balance sheet shrinkage wouldn’t occur until a recovery had taken hold). There were some big movers among smaller/mid-cap stocks following earnings (DF, CCE, WYN) but most of the market’s largest companies have reported at this point. On the Greek front, investors have been bombarded w/myriad headlines for the last 48 hrs (nearly everyone contradicting its predecessor it seems) and are starting to be tuned out (hopefully there will be a definitive statement from the EU and/or France+Germany to provide some clarity). In terms of trading flow, hard to read much into today’s patterns. Larger vanillas pretty much inactive (as has been the case for a few days now) while short-term HFs also not doing much of anything. On a technical basis, people looking for a break either north of 1071 (we have failed to hold above this level for a few sessions now) or south of 1056. The most notable action occurred away from stocks today as US TSYs sold off following a weak 10yr auction.

· Equity Sectors – trends have been pretty consistent for much of the session. Commodity-related stocks getting hit on back of the dollar strength and some disappointing earnings (in energy its EOG, which is off 6% on the day, and in metals/miners, its MT, which is down 7%). The SP500 Energy and Material sectors were the market’s weakest groups, although both closed off their worst levels. Financials have had a bid to them for most of the session and this largely persisted into the bell (strength was broad although banks outperformed). Tech, HC, industrials, discretionary, and telecom all traded pretty much inline (each group off ~0.3-0.5%). Media lags on back of selling following a bunch of smaller/mid-cap earnings (NYT and SNI both off ~6-7% while DISCA falls 4%; DIS opened down but rallied back steadily throughout the session to end up small). In telecoms, S and LVLT both drop ~9% after earnings (although VZ makes small gains). Among the consumer staple stocks, DF drops ~14% and CCE falls 4% (both on earnings).

· Best Performing SP500 stocks (from Bloomberg): AIG, LM, WYN, HIG, NYX, TIF, FHN, JBL, HAR, SCHW, RDC, SII, SLE, PFG, AMP, PLD, FITB, FII, CELG

· Weakest Performing SP500 stocks (from Bloomberg): DF, NYT, S, SNI, EOG, MU, CCE, PCS, X, ATI, FSLR, ETFC, ICE, MEE, CBS, TAP, SNDK, CME, TIE, WLP

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