The fate of Saddam Hussein seems largely irrelevant this morning as jubilant Iraqis unleash years of pent-up frustration and anger on symbols of the dictator's collapsed regime. But as the war draws towards a close, investors are moving their collective attention back to Wall Street. This has given rise to another wave of uncertainty. Geo-political nervousness has been replaced with concerns that the forthcoming flood of quarterly earnings will be less than spectacular.
A short-term Dow chart gives us some insight into what traders are thinking. The index began trending lower shortly after the statue of Hussein was toppled in central Baghdad. The majority of Dow components are trading in the red, with HPQ, HD, MCD, MSFT, GE, T, and AXP all showing losses of more than 2%.
30-minute chart - Dow Jones:
The intraday losses have been somewhat more pronounced over in tech-land, where the NASDAQ is currently trading lower by 1.3%. The Composite has fallen into the gap that was formed by last Wednesday's move higher. Pullbacks in the semiconductor index (SOX.X) and software index (GSO.X) are making it rough going for the bulls.
Daily chart - SOX.X:
Daily chart - GSO.X:
Meanwhile, the biotech index (BTK.X) is among the worst-performing sectors with a loss of 1.7%. The index is approaching support in the 330 region, near the 50-dma. Orderly pullbacks in AMGN, BGEN, and IDPH are contributing to the weakness.