Global markets were in party mode yesterday but the rally has paused thanks to a bounce in the U.S. dollar. Commodity and resource-related stocks were the worst performers even though commodity futures aren't moving that much. Oil is up less than 0.5% around $79.30 a barrel. Gold futures are off less than $2.00 at $1,137.40 an ounce. Economic data and retail earnings news released in the last 24 hours has been mixed adding to the lackluster session.
Foreign markets were mostly down. The Hong Kong Hang Seng briefly traded above resistance at the 23,000 level but eventually closed lower with a 0.13% decline. The Japanese NIKKEI slipped 0.6% on a stronger yen. The Chinese Shanghai index bucked the trend and extended its rally with a 0.24% gain. In Europe the profit taking was widespread but relatively mild. The FTSE snapped a four-day winning streak with a 0.6% decline. The German DAX lost 0.45%. The French CAC-40 gave up 0.88%.
Here at home in the U.S. investors were hoping that another round of retail earnings news would shed some light on the consumer. Home Depot (HD), Saks (SKS), TJX Companies (TJX), and Pacific Sun (PSUN) all managed to beat Wall Street's profit estimates but most were cautious on the fourth quarter. HD raised their 2010 earnings estimates. PSUN guided their earnings lower. SKS said their Q4 same-store sales and margins would be lower. The RLX retail index is off 1.8% on the session.
Economic data out this morning was mixed. The Producer Price Index (PPI) offered a benign reading on inflation with October's PPI rising 0.3% versus estimates at +0.5%. Yet industrial production numbers only rose 0.1%. Economists were hoping industrial production had risen by 0.4% in October. In other news the National Association of Home Builders confidence index remained unchanged at 17 for the second month in a row. Readings under 50 are negative.
Stocks do appear to be bouncing from their intraday lows. The S&P 500 index is down less than one point at 1108. The NASDAQ composite is up less than two points at 2199. The Dow Industrials are up about 10 points at 10,415. The Russell 2000 index is in positive territory but up less than one point at 603.
Let's take a quick look at charts for some of the major indices:
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
Scanning the OptionInvestor.com play list for movement we see that Coach Inc. (COH) is under performing with a 4.3% decline. I don't see any specific news behind today's relative weakness. The TBT hit our stop loss this morning.