Intraday Market Update
US equities got a boost in the pre-market after the downward revision to Q2 GDP was smaller than expected, but the enthusiasm was short lived. After gapping +7 points higher at the open the S&P 500 took a -16 point nosedive in the first 30 minutes of trading after a one-two punch from a worse than expected consumer sentiment report and lowered Q3 revenue guidance from Intel. The selling reversed on a dime when the S&P 500 found a double bottom with Tuesday's lows at 1,039 and proceeded to bounce +20 points off of its lows. In a speech from Jackson Hole Fed Chair Ben Bernanke provided fuel for the reversal when he said the Fed stands ready to respond with more support for the economy if necessary. All of the indexes are now firmly in positive territory, gaining more than+1% across the board. Treasuries are sharply lower and the outflows are helping boost equities. Crude oil is up +2% and has gained more than $3 off of its lows. Gold is flat and copper has gained +2%. Equity markets overseas posted solid gains, especially in Europe.

The second preliminary reading of Q2 GDP was "less bad" than expected as it showed a 1.6% annualized rate of growth compared to estimates calling for a downward revision to 1.4%. Today's 1.6% reading is down from 3.7% in Q1 and estimates of 2.4% last month. Personal consumption was somewhat encouraging as it was upwardly revised to 2.0% from 1.6%, and was expected to remain unadjusted.

Consumer sentiment continues to lose ground as the Reuters/University of Michigan's index is down -0.7 from the mid month reading to a final reading of 68.9 in August. Estimates calling for a reading 69.6. Weakness in the last half of the month was centered in expectations which is a leading component of the index that may point to trouble ahead. Consumer sentiment was hit hard in July and has yet to recover which is a reflection of losses in the stock market and a weak employment outlook.

The speech from Fed Chair Ben Bernanke at the annual Economic Symposium in Jackson Hole, Wyoming took place after the bell. Helicopter Ben said the Fed stands ready to provide more stimulus if needed, citing that the Fed's recent decision to stabilize its balance sheet "should promote financial conditions supportive of recovery," but that "additional purchases of longer-term securities, should the FOMC choose to undertake them, would be effective in further easing financial conditions." Bernanke reiterated three previously used tools the Fed can use for further quantitative easing, such as additional open market purchases, modifying FOMC communication, and reducing the interest paid on excess reserves.

In equities, Intel cut its Q3 revenue guidance citing weaker than expected demand for PC's in mature markets. Shares of INTC were initially halted but have recovered and are up +1%. Other semiconductor names suffered on the news but have recovered. Boeing is postponing delivery of its first 787 Dreamliner until the middle of Q1 2011 after a Rolls Royce engine to be used on the aircraft blew up in testing. The delivery of the 787's is already over 2 years late. BA has gained +2.7%.

Shareholders of 3Par (PAR) continue to be rewarded. HP and Dell are in the midst of a bidding war for the network storage firm. After the close yesterday HP increased its offer to $27 per share which topped Dell's previous $24.30 per share offer from earlier in the day. This morning Dell matched the $27 per share offer and 3Par accepted it. Then HP increased its offer to $30 per share in the pre-market. Shares of 3PAR have gained +236% since their 8/13 closing price.

In earnings, investors weren't impressed with reports from Tiffany & Company (TIF) and J. Crew (JCG). TIF missed revenue estimates and warned that earnings growth in the third quarter would be "somewhat restrained" because of higher marketing spending, while JCG lowered guidance. Shares of TIF and JCG are down -4% and -6%, respectively.

Core Sector List:
Overall reading: 20 sectors advancing, 0 sectors declining
Strongest Sectors: Coal, Oil Services, Insurance, Banks
Weakest Sectors: NONE

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