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Stocks fading from earlier gains

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It has been an "down and up" session this morning as earlier economic data from the durables goods side of the economy didn't hold some of the upside surprises that some traders had been looking for, but the later released consumer confidence reading of 110 was well above expectations of 94.3 and had stocks finding buyers.

Since the 10:00 AM EST release of consumer confidence stock jumped to session highs, but have pulled back from their best levels of the session. The Dow Industrials continue to hold onto a 70-point gain at 10,350, led by gains in Alcoa (NYSE:AA) $37.61 +2.34%, Phillip Morris (NYSE:MO) $53.28 +2.5%, International Paper (NYSE:IP) $42.44 +1.87% and Intel (NASDAQ:INTC) $30.51 +1.80%.

The broader NASDAQ Composite (COMPX) 1,819 +0.37% is now showing some mixed results from many of its tech-heavy sectors as bullishness was broad after the consumer confidence numbers, but here we've seen a bit of a pullback from earlier levels and bulls are having a more difficult time keeping things bullish. Semiconductor as depicted by the Semiconductor Index (SOX.X) 583 +1.7% have shown the greatest strength after showing earlier gains nearing the 3% level. Within the Semiconductor Index (SOX.X), Texas Instruments (NYSE:TXN) $33.35 +4.05 is leading gains, with Linear Tech. (NASDAQ:LLTC) $43.65 +2.56% and Altera (NASDAQ:ALTR) $21.84 +2.77% also bolstering gains.

The S&P 500 Index (SPX.X) 1,138 +0.57% is getting a bit of a boost from the financials as banking stocks are near their best levels of the session with the S&P Banks Index (BIX.X) 684 +0.92%, KBW Bank Index (BKX.X) 897 +1.17% and Securities Broker Dealer Index (XBD.X) 512 +0.85% showing gains. Offsetting the strength in some of the banks and deeper cyclicals like the Forest & Paper Index (FPP.X) 363 +1.58% is weakness in the telecom sector as depicted by the North American Telecom Index (XTC.X) 616 -1.7% and Combined Telecom Index (IXTCX) 171 -1.19%.

Part of today's reason for telecom weakness was news out of equipment provider Ciena (NASDAQ:CIEN) $8.44 +1.07 saying it plans to cut about 22% of its workforce and take charges of $200 million related to inventory.

Jeff Bailey
Senior Market Technician
Option Investor

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