Thursday, March 25, 2010

Market and Equity Sectors Update $SPY

·         Market Update – stocks were set for another impressive rally as of ~1pmET today (helped higher by the ECB collateral adjustment and strong #s out of QCOM and BBY in the US) before coming for sale into the bell.  Equities weakened ostensibly after ECB president Trichet made comments in a television interview concerning IMF assistance for a Eurozone country being “very bad”; the remark hit just as the wires were reporting that a deal had been reached among the major Eurozone principles (i.e. Germany and France) for a joint EU-IMF aid package for Greece.  Another weak TSY auction (the 7yr results today were the 3rd sloppy auction of the week, following the 2s on Tues and 5s on Wed).  However, neither of these headlines was really a surprise (Trichet has never been a fan of having the IMF sort out Eurozone fiscal/monetary problems while we have been seeing poor auctions and a steep TSY sell-off all week yet stocks didn’t seem to care).  The close was certainly an ugly one - after hitting an intra-day high of 1180, we finished at 1165 and at the lows.  The desk was pretty quiet on the pullback (as it was on the rally this morning), although volumes did pick up some into the bell.  Sellers were quick to exit positions as the market cracked this afternoon…people remain jittery when it comes to this tape and a lot of faster money investors sold/shorted out of those groups that had seen the quickest rallies these past couple days (esp. the materials/metals).  That said, long onlys didn’t do much of anything (they kept existing positions although didn’t really buy either).  Technically, we traded north of 1177 intra-day but couldn’t close there; on the downside the next big levels are 1153 and 1150. 

·         Equity Sectors – the most dramatic intra-day reversal came in the materials, as the metals came heavily for sale on back of a stronger dollar (TIE, CLF, AKS, X all saw steep drops into the bell) – there had been a lot of relatively quicker money in this group and it seems like many rushed for the exits into the close.  Energy stocks also were hit hard into the close, dropping more than 1% (the stronger buck a culprit for the weakness here too).  Tech and financials remained the market’s best groups, although both were well off their highs (fins up ~0.7% and tech up ~0.5%).  The SOX ended flattish-to-down after leading the market earlier (SOX was hit despite QCOM trading up 5% post its preannouncement).  Hardware stocks were also weak.  In the financials, banks continue to see buy demand, although this group like everything else came for sale into the close as well (C and BoA both were among the strongest banks). 

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