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Industrials make comeback attempt

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Once the bond market closed for trading at 03:00 PM EST, stocks are attempting a comeback as the Dow Industrials (INDU) 8,318 -0.61%, down 170 points at its lows of the session, now trades down just 50 points.

Of the Dow 30 components, breadth has improved with 9 stocks showing gains versus 21 trading at a loss. Procter & Gamble (NYSE:PG) $88.86 +3.62% has reached a session high of $89.03 in the last five minutes, bolstered by this morning's better than expected earnings. Aerospace/defense contractor Boeing (NYSE:BA) $29.58 +2.07% also finds bullishness to its intra-day high.

Weakness in the Dow has banking giant JP Morgan (NYSE:JPM) $20.30 -4.47% and leisure bellwether Walt Disney Company (NYSE:DIS) $16.65 -4.2% leading declines. Shares of JP Morgan have come under pressure after Prudential says that JPM's CFO was "quite pessimistic" about the capital markets outlook during a meeting with the firm, and looks for the company to adjust to this reality. The firm (Prudential) senses that long-term growth targets may be lowered and sets a price target of $18 on JPM's shares.

Sector action now has the S&P Retail Index (RLX.X) 293.46 +0.98% moving into positive territory, as well as the Retail HOLDRS (AMEX:RTH) $77.55 +0.53%. This despite today's much weaker than expected consumer confidence numbers. Both the Gold/Silver Index (XAU.X) 64.89 +0.65% and Dow Jones Home Construction Index (DJUSBH) 309 +0.82% hold earlier gains.

Weakness remains in the technology sectors, but many have recovered from their lows. Earlier sector loser has the Fiber Optic Index (FOP.X) 33.34 -5.06% recovering about 2% of its earlier session losses.

Currently, the major market indexes look to close above their intermediate-term 50-day SMA's, with only the smaller cap Russell 2000 Index (RUT.X) 365 -0.94% still trading below its 50-day SMA of 372, but holding well above its starting to round higher short-term 21-day SMA of 356.

Volume remains rather light with NYSE volume just breaching the 1.1 billion level, with NASDAQ volume slightly heavier at 1.3 billion.

NYSE breadth has improved slightly with decliners now having the edge on advancers by a 2 to 1 margin, while the same is true for the NASDAQ with decliners outnumbering advancers by a 3 to 2 margin.

Treasuries finished their trading session highs with the 10-year December futures (ty02z) 114'125 +0.90% finishing just off an intra-day high of 114'225, with the 10-year YIELD ($TNX.X) falling to 3.934%.

Jeff Bailey

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