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Staten Island refinery fire sent stocks to their lows

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Stocks fell to their lowest levels of the session, but have been rebounding in the last 30-minutes after a large plume of smoke from a Staten Island, New York refinery fire spooked investors.

Concerns regarding the fire being terrorist related sent the Dow Industrials (INDU) 7,939 +0.3% falling more than 80-points in a 20-minute time span, but those declines have been recovered, with the Dow now trading at almost the exact level of trade when the news was first released at approximately 10:05 AM EST.

The refinery is owned by Dow component Exxon/Mobil (NYSE:XOM) $33.93 +0.89%.

Shares of environmental services provider Clean Harbors (NASDAQ:CLHB) $13.54 +4.31% jumped to a session high of $13.99 on news of the Staten Island refinery fire. The company provides a wide range of environmental services.

We did see a slight reaction from the bond market, but not nearly has much as witnessed by equities on the news. The 10-year bond futures contract (ty03h) 115'165 -0.16% jumped from the 115'095 session low to 115'190 on the refinery news, and now hovers near the mid-range of today's trade. This has the benchmark bond's YIELD ($TNX.X) at 3.881% and finding near-term YIELD resistance at our upward YIELD trend that was violated to the downside on a closing basis yesterday.

April Light, Sweet Crude futures (cl03j) 35.40 +2.01% jumped to another contract high of $35.95.

Technology sectors have been under some selling pressure this morning, with the Networking Index (NWX.X) 143.35 -2.62% leading today's sector loser list, most likely on the heels of yesterday's regulatory action on local phone services that give states a stronger role in regulating the Bells. Under current ruled, the Bells have to let rivals use their local networks at sharp discounts, and most likely prolongs the recovery for any type of meaningful increase in capex spending for the Bells as earnings remain under pressure in a highly competitive and seemingly commoditized business environment.

Shares of Expedia (NASDAQ:EXPE) $64.25 +1.5% are making a move higher on building volume from a tight 2-day consolidation pattern and might hint of a short-squeeze after the stock recently closed back above its longer-term 200-day SMA of $61.94 and shorter-term 21-day SMA at that same level. I haven't seen any news to explain today's intra-day volume build of 234,000 shares in the last 30-minutes.

As I finish this update, stocks look to have digested the refinery fire news in rather quick fashion and current response looks to confirm thoughts and media reports that the fire was NOT terrorist related.

Jeff Bailey

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