Intraday Market Update
The markets were again under pressure this morning after mediocre reports of same store sales and jobless claims. Sales at stores open at least one year rose +0.5% in April, falling well short of estimates calling for a +1.7% rise. US weekly jobless claims continue their incremental declines, but not by much. Initial jobless claims fell by only -7,000 to 444,000. Last week's claims were revised +3,000 higher to 451,000. The strength of tomorrow's big employment report is a crap shoot in my opinion and may be setting things up for a rally or another descent in the markets.

The S&P 500 was down -15 points just before noon when it hit a key support level at $1,150, which were the January highs. The index bounced +9 points has now made new lows. If the S&P 500 closes below 1,150 the next stop is most likely 1,120, then 1,080. Financial and real estate stocks are dragging down the markets. The VIX is above $28.00 and a downtrend line that began on November 2nd. A solid close and break above this trend line, along with the S&P 500 closing below 1,150, probably means the market is headed lower in the short term. We are at a critical juncture and it is do or die time for the bulls, at least in the short term.

The hysteria continues in Europe as investors are rushing to the exits to avoid risk. The market continues to feel that European leaders are not doing enough to stem the Euro Zone's spreading debt crisis, although Greek leaders won enough votes for passage in parliament of their austerity bill. The focus on the crises is now firmly pointed towards Portugal and Spain. In a statement from Moody's they commented that the debt crises may threaten banks in Ireland, Italy, and the UK, not to mention Spain and Italy which are already under duress. The Euro has made new 14-month lows and equity markets are lower once again.

In earnings news, Q1 results from Transocean were strong but revenue missed slightly. On the conference call Transocean executives reiterated that they do not know what caused the explosion at the Deepwater Horizon rig in the Gulf of Mexico and warned that Q2 results would be impacted by the disaster. Shares of RIG are down -4.5%.

Prudential Financial exceeded earnings and revenue estimates as their assets under management were up sharply over last year's levels. PRU was up +3% in early trading but is now about breakeven. Health insurer Cigna is up +5% on great earnings and revenue results. DirecTV beat earnings expectations in Q1, while Cablevision missed. DTV had fewer new subscribers but price increases and cost cutting helped drive the results. DTV is up +4%. CVC grew new customers and also increased its quarterly dividend but investors are dumping shares and the stock down -8%. This probably has something to do with the FCC's plans to reclassify broadband as telecom service.

Commodities:
Commodities are under pressure again with the exception precious metals. Gold is higher by +1.79%, while silver is about breakeven. Natural Gas made new lows on the back of its 2nd straight weekly build in inventories. The clean burning fuel is off another -2.38% and down -11% since last week's high. Front month crude is off by more than -2.5% to about $78.00 per barrel. Copper is lower by another -1.0%.

International Markets:
All major markets throughout the world were lower on Tuesday. Leading the declines in the Asia-Pacific region were China (-4.11%), Japan (-3.27%), and Australia (-2.16%).

European markets took it on the chin again with big losses in Italy (-4.03%, Spain (-2.93%), France (-2.20%). Shares in London were of by -1.52% while Germany shed -0.84%.

Core Sector List: Overall reading: 15 sectors declining, 1 sector advancing.
Weakest Sectors: Home Construction, Banks, Broker Dealers, Semiconductors
Strongest Sectors: Gold Miners, Internet, Healthcare

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