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Market Updates

Indexes firm after rough opening

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So far this morning, markets in the U.S. are holding together much better than some had expected. As stocks began opening for trading (it was a process as not all stocks opened in the first 15-minutes of trading) many of the broader market indexes declined. The Dow Industrials was an example of this as that indexes value declined with the opening of each additional component. Once all of the stocks in the Dow Industrials (INDU) had opened, prices firmed as many Americans and participants from around the world began casting their votes in regard to their longer-term faith in the U.S. economy.

Dow Industrials Chart - 15-minute interval

As you can see, the first three intervals (45-minutes of trading) for the Dow Industrials were rough. After all stocks were open for trading, the market became more "rational." We'd expect some volatility in coming sessions, but early action is positive. Traders that have been around long enough have seen days when the Dow Industrial have fallen more than 5%. They were not pleasant days, but traders that can properly manage their accounts and make prudent choices have fared well.

Two stocks that we mentioned in this mornings market commentary (that we've mentioned before) are doing OK. In the "hot list" on OptionInvestor.com we mentioned shares of Campbell's Soup (NYSE:CPB) at $27.93 as a stock that might be a decent looking play to the bullish side. Not long after, the stock was setting off our upside alert at $29.

Jeff Bailey

Travel Stocks

Not surprisingly, travel stocks are attracting some of the most selling today.

Travel Stocks (sorted by volume)

Cruise lines Royal Caribbean and Carnival are suffering some of the biggest percentage drops today. A Carnival spokesperson said he saw no increase in cancellations yet, but it still too early to tell just what the impact will be on this industry.

Nervous investors are unsure how travelers will react, and online travel sites Travelocity and Expedia are also attracting selling. Priceline (PCLN) was one of the first travel sites to reach pro forma profitability, but current conditions should alter that outlook. The stock is down 36% today.

Relatively speaking, hotel stocks are holding up better, but Starwood, Four Seasons, and Choice Hotel are still down significantly.

Mandalay Resort Group (MBG) is down 14.43%, and casino gaming product stocks International Gaming (IGT) and Anchor Gaming (SLOT) are down over 10%.

Six Flags (PKS) is down 16.07%.

One theory going around is that if families aren't going on vacation they are going to stay home and watch movies. Blockbuster (BBI) is up 6.53% today, and Movie Gallery (MOVI) is up 8.26%.

Investors must also be thinking that families will be putting in swimming pools instead of going to Walt Disney World. Anthony and Sylvan Pools (SWIM) is up 19.86%.

Malibu Entertainment (MBEW), which owns and operates family entertainment centers, is up 11.11%. Bingo hall managers Littlefield Corporation (LTFD) is up 6.6%.

Restaurant stocks Benihana (BNHN), Pizza Inn (PZZI), and Nathan's Famous (NATH) are posting small gains, but Darden (DRI), Outback Steakhouse (OSI), and Applebee's (APPB) are posting 4% to 7% losses.

Jeffrey Canavan
Assistant Analyst

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