Intraday Market Update
Stocks gapped up higher this morning as a flurry of good earnings are keeping the markets buoyant. Dow members Goldman Sachs, IBM, Johnson & Johnson, and Coca-Cola all reported earnings that beat analyst estimates, however, all four of these stocks are lower which is keeping the DJIA in check compared to the other majors. But the indices across the board are still higher led by a +9 point gain in the S&P 500 (+0.80%) and a +18 point gain in the NASDAQ (+0.75%) as of about 1:30 EDT. The DJIA has tacked on +35 points (+0.31%). Conflicting statements continue to pour in from world leaders. Yesterday evening Chicago Fed President Evans said the recession is "definitely over" and the odds of a "double-dip" are low as the economy bottomed out last summer. On the other hand, this morning the International Monetary Fund warned that a new phase of the economic crisis could grow, referencing the sovereign debt situation. Regardless of whom you believe we now have some recent inflection points that should be support on the US indices. And they are not in any real trouble until these shorter term support levels are breached, but there are resistance levels just overhead that will have to be dealt with. I have summarized below.
S&P 500: Support: 1,180 | Resistance: 1,214, then 1,224, which is the 200-week SMA.
DJIA: Support: 10,950 | Resistance: 11,155, then 11,725. The DJIA is currently right on its 200-week SMA.
NASDAQ: Support: 2,445 | Resistance: 2,545, then 2,700. The NASDAQ is current above all of its weekly SMA's (20, 50, 100, and 200).
In economic news, the ICSC-Goldman Store Sales report keeps on climbing higher. The numbers rose another +0.2% pointing to a year-over-year pace increasing +4.6%.
In earnings news, Goldman Sachs blew away quarterly earnings estimates again, but it is worth noting that GS has consistently beat expectations over the years. Revenue was substantially higher than expected. The firm's proprietary trading and investments accounted for more than $10 billion of the reported $12.8 billion in revenue, up 60% over last quarter. The legist of the earnings conference call was essentially a review of the SEC probe, during which Goldman's general council reiterated their position that the SEC's charges are groundless. Shares of GS are down -1.30%, while the financial ETF -XLF- is up +0.90%.
Other Dow members IBM, Coca-Cola and Johnson & Johnson are all lower on the heels of various notes in their earnings reports. Despite topping estimates and raising its 2010 forecast, IBM is down -1.8% as the firm's backlog fell slightly over last quarter. J&J is also under pressure as the firm trimmed its 2010 outlook and guided full year revenue slightly below estimates, citing the effects of the healthcare reform bill. Coca-Cola beat bottom-line targets but missed slightly on the top line. KO is down -1.5%.
Commodities are strong across the board. Front month crude is up +1.20% to just over $84.12 per barrel. Natural gas is about break-even and well off of its lows. Gold is higher by +0.43% to just about $1,140 per ounce, while silver higher by +0.75%. Copper is higher by +0.33%.
Most international markets bounced back on Tuesday. Japan and China closed barely negative while Honk Kong tacked on +1.02%. Korea gained +0.75%, Australia was higher by +0.22%, and Thailand gained +5.43% after a multi-week decline.
Germany's consumer confidence numbers beat estimates on Tuesday which helped lead their market to a +1.41% gain. All of the other major European markets were higher including France (+1.41%) and London (+0.97%).
Core Sector List:
Overall reading: 13 sectors advancing, 3 sectors declining.
Strongest Sectors: Oil Services, Home Construction, Oil
Weakest Sectors: Broker Dealers, Biotechs, Pharmaceuticals
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: