Intraday Market Update
The major US indices overcame early pressure in the pre-markets after Citigroup posted its first profit in eight quarters and a positive economic report of leading indicators, but have since retreated. The S&P 500, NASDAQ and Russell 2000 have all made new intra-day lows, while the DJIA is the barely hanging on to its lows from Friday. The NASDAQ and Russell 2000 are the worst performers, down -0.90% and -1.30%, respectively. The Conference Board's index of leading economic indicators was up +1.4 % in March and was bolstered by significant upward revisions to both January and February.
But the Goldman Sachs fraud charges by the SEC continues to test investor sentiment and buyers are disappearing as the "made for TV" soap opera plays out. Many analysts, including myself, feel the case against Goldman Sachs is weak, but it poses many threats to the financial system. Veteran banking analyst Dick Bove warned in a research report that all the events on Friday are "setting the stage for collapse one more time," however; he also noted that he sees weakness in GS stock as a buying opportunity because the firm's secular outlook is positive. In Washington, politicians are seizing at the opportunity to publicly speak out about the need for financial reform. Reports have surfaced that German government officials have already been in contact with the SEC about the allegations, and that they may pursue charges. Britain is also considering taking action against the firm.
Citigroup posted a profit of $4.4 billion in Q1 compared with a loss of $696 million a year ago. The strong earnings report sent the stock higher by +8% in early trading, but it has since retreated and is positive by +3.5%. Citi's CEO Vikram Pandit offered very cautious remarks in Citi's earnings release, noting that he remains cautious about the environment and does not expect the bank's performance "to follow an invariable trend line upward."
In other earnings reports, pharmaceutical name Eli Lilly (LLY) topped expectations while revenue was in line with estimates. However, the company also trimmed its 2010 earnings outlook, citing the impact of healthcare reform. Shares of LLY are about break-even but well off of their lows. Oil services leader Halliburton was more or less in line with the estimates but executives at the firm warned that a sustainable recovery would only occur with an increase in natural gas demand. Miner Arch Coal plummeted nearly -3% after the open on the heels of weak bottom line performance, although the name bounced right back into positive territory as traders focused on much improved 2010 guidance.
Commodities are under pressure as front month crude is off by -2% at $83.00 per barrel. Natural gas is down -2.70% and back below $4.00. Gold is lower by -0.36% to just under $1,133 per ounce, while silver is about flat. Copper is off by â€“0.50%.
Continuing concerns over China's attempts to cool down its property market sent the Shanghai Index down -4.79% on Monday. All other Asia-Pacific markets were down sharply including Hong Kong (-2.10%), Japan (-1.74%), and Australia (-1.40%).
In Europe, Greek CDS spreads are widening again as the uncertainty continues. The country appears to be inching closer to activating its emergency loan backstop and traders are averting risk. All markets retreated on Monday with notable losers being Germany (-0.30%), Spain (-0.53%), and France (-0.41%). Shares in London were off by -0.28%.
Core Sector List:
Overall reading: 14 sectors declining, 2 sectors advancing.
Weakest Sectors: Semiconductors, Gold Miners, Retail, Transportation
Strongest Sectors: Healthcare, Insurance
S&P 500 - Daily and 30-minute Intraday Charts:
Dow Jones - Daily and 30-minute Intraday Charts:
NASDAQ - Daily and 30-minute Intraday Charts:
Russell 2000 - Daily and 30-minute Intraday Charts: