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Market firming after plane crash in New York

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Stocks are beginning to firm and are trading off their worst levels of the sessions after this mornings plane crash near Rockaway, New York. American Airlines flight 587 was departing from John F. Kennedy Airport on its way to Santo Domingo, Dominican Republic.

Several eyewitness reports are that a piece of the plane broke off just prior to the plane crash, but there is uncertainty of what part of the plane may be responsible for the crash.

In the past half-hour, we've seen 4 Dow Component stocks edge into positive territory and this may be our first look at some strength starting to form since this morning's open.

Today's place crash news hit the wires just prior to the opening of stocks and we're starting to see some signs of strength with a quick glance of the Dow Industrials

Dow Components - 10:30 EST screen capture

The first stock to edge into the green in the Dow 30 was shares of Minnesota Mining (NYSE:MMM). Minutes later, shares of Microsoft (NASDAQ:MSFT) edged into positive territory and then shares of McDonald's (NYSE:MCD) and Philip Morris (NYSE:MO) turned green. By looking at the Dow 30, a trader gets the feeling we're starting to see the market digest this morning's tragic events, but early signs are don't seem to be a response from the market that terrorism was responsible.

Semiconductor, Networking and Internet also green

It's nearly impossible to write and type everything that is taking place, but now we're seeing some sectors turn green. Earlier this morning, we did see some signs of strength from the Semiconductor and Networking sectors. Eventually, both of these sectors turned lower, but not more than 3%. At the time of this writing (12:42 pm EST) the Semiconductor Index (SOX.X), Networking Index (NWX.X) and Internet Index (INX.X) are in positive territory, but fractionally so.

I often associate bullishness in the Internet Index (INX.X) more a sign of bullishness and aggressiveness by bulls. The group tend to lack fundamentals on a more historical basis compared to the Semiconductor and Networking stocks.

Gold Commodity not responding as "worried"

Just after the terrorist attack on the World Trade Center and Pentagon on September 11th, I went into long oration on the action of gold prices (the commodity vs. the stock (XAU.X)) and today we did see a "pop" at the open of trading in the commodity as characterized by the December 2001 Gold futures (gc01z). Gold has found some selling in the past couple of hours and after trading a session high of $282.50 has settled back into the $279.40 price, but still above Friday's close of $277.70.

With the bond market closed today in observance of Veteran's Day, we are unable to track the market response in the bond market, but can use the commodity market and gold to help give us an understanding that the MARKET does not seem overly worried about today's events. Undoubtedly, the market is sad for those lives lost.

Jeff Bailey
Senior Market Technician
Option Investor

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