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Mixed morning with strength in technology

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After a higher broader market open, stocks have taken on a mixed trade with technology sectors holding some gains. Semiconductors as depicted by the Semiconductor Index (SOX.X) 328 2.6% along with telecom equipment sectors like the Wireless Telecom Sector (YLS.X) 54.38 +2.6% and Fiber Optic (FOP.X) 45.42 +2.59% lead tech sectors to the upside, following bullishness found recent European trading.

Shares of Nokia (NYSE:NOK) $18.45 +1.31% have traded a morning high of $18.61 after the company's CEO Jorma Ollila made positive comments in the Financial Times.

As mentioned in recent commentary here at OptionInvestor.com, specifically the Index Trader Wrap, the YLS.X has broken above its downward trending 200-day SMA and holds above that level for what now looks to be a third session. Two previous tests of this longer-term moving average found the YLS.X quickly reversing bullishness within 1 trading session, so current action hints that bulls are perhaps becoming a little more committed to this group of stocks.

While some of the telecom-equipment sectors show gains, the service side of things shows mixed results as depicted by the North American Telecom Index (XTC.X) 440.85 +0.69% and Combined Telecom Index (IXTCX) 116.23 -0.24%.

After being downgraded this morning, Dow component AT&T (NYSE:T) $13.13 -5.26% trades heavy, but negativity in this Dow component is being offset by bullishness in fellow Dow component and telecom heavyweight SBC Communications (NYSE:SBC) $25.86 +2.65%, which leads Dow gainers, as the stock looks to bounce from a rounding higher 50-day SMA, and currently testing a rounding lower 21-day SMA of $26 as intra-day resistance.

Morning sector weakness finds financials under some selling pressure with the KBW Bank Index (BKX.X) 756 -1% weighed lower by Dow components Citigroup (NYSE:C) $36.38 -1.59% and JP Morgan (NYSE:JPM) $21.74 -1.53%.

Also showing marginal weakness are the HMO Index (HMO.X) 528 -1.04% just below the 550 level. As mentioned Friday, this sector index finds converging 21, 50 and 200 day SMA resistance at the 550 level and may have bulls hesitant near-term to do any value shopping after the recent month's decline from the 600 level.

The Morgan Stanley Healthcare Index (RXH.X) 292 +1.25% is getting a nice pop this morning as component Tenet Healthcare (NYSE:THC) $17.48 +7% looks to rebound from some favorable press in this weekend's Barron's. If nothing else, shorts look to lock in some gains here after the stock's recent decline from the $50 level to $25, and then continued declines from last weeks lows near $14.

After gapping higher at the open to $43.80, shares of home improvement retailer Lowes Companies (NYSE:LOW) $$42.12 -0.87% have given back those gains after reporting earnings this morning that beat estimates by 3 cents a share and giving guidance for its upcoming Q4 of $0.33, which was inline with consensus.

Also on the retail front is weakness in discount retail giant and Dow component Wal-Mart (NYSE:WMT) $54.65 -1.51% after the company said this morning that it now sees November comparables at the low-end of range. Retailing sector action has the S&P Retail Index (RLX.X) 289 -0.9% and Retail HOLDRs (AMEX:RTH) $75.45 -0.85% trading lower.

In a correction to this morning's 09:00 Update, the fair value numbers reported along with the S&P buy/sell premium execution levels were incorrectly posted. Therefore, we are asking that day traders using the buy/sell premium levels please disregard those numbers as HL Camp & Company has not followed with today's buy/sell premium levels.

Jeff Bailey

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