Intraday Market Update
Light volume and the lack of news helped push US equities higher this morning but they have come off of their best levels and are now bouncing near the flat line. Front month crude oil has recovered most of yesterday's declines after a pipeline in the US was shut down and a surprising upward revision to Japan's Q2 GDP is boosting confidence that demand for oil will improve. The oil services sector has gained +2.85% which is by far the best performing sector, while semiconductors have lost -2.25% which is the worst performing sector. Gold is down -$5 per ounce but has recovered +$8 off of its lows. Overseas, the Asia-Pacific region was mostly higher on the heels of Japan's upward revision to Q2 GDP, but cautiousness ahead of Chinese data due out next week kept advances in check. European markets were relatively flat as markets in the region digest banking and sovereign debt concerns, highlighted by Deutsche Bank's announcement yesterday of their need to raise cash to meet regulatory capital requirements.

Crude oil is getting a boost after a pipeline transporting 670,000 barrels of oil a day was shut down Thursday in Romeoville, Illinois due to a leak. No injuries were reported and authorities said they have yet to determine what caused the leak. The pipeline is owned by Enbridge Energy Partners based in Calgary, Canada. Olivier Jakob of Petromatrix in Switzerland said "It is not the first time that there has been a leak on a pipeline and in the past it never took long for the repairs to get done." The analyst also noted that environmental concerns amplified by the Deepwater Horizon incident may result in lengthier repair work which could disrupt supply. A spokesman at Enbridge Energy said they are expecting a significant impact on oil customers due to the 670,000 barrels per day the pipeline carries. The pipeline is said to have the ability to carry more than 1/3 of crude oil imports to the Midwest.

Equity news is focused on the tech sector following an update from Texas Instruments (TXN) and earnings from National Semiconductor (NSM). TXN is down -2% after narrowing their Q3 earnings and revenue guidance. NSM is off more than -7% after reporting earnings that were above estimates but revenues missed. The firm also offered revenue guidance that was below estimates. Executives at NSM said slower growth would mute the usual seasonal growth seen at this time of year.

Elsewhere, athletic apparel retailer Lululemon (LULU) has gained more than +12% after the company beat earnings and revenue estimates in their Q2 report and raising 2010 guidance. Note: LULU sold off -23% in August before rebounding +10% prior to today's report. The stock is now near its pre sell-off levels. LULU currently trades with a PE near 40. Shareholders of CROX are in pain as the stock has sold off more than -20% in the past two days, wiping out nearly 2 months of gains in two trading sessions. Volume in the stock has exploded to nearly 7 times the daily average which points to an institutional seller unloading a large position.

Core Sector List: Overall reading: 15 sectors advancing, 5 sectors declining
Strongest Sectors: Oil Services, Oil, Coal, Biotechnology
Weakest Sectors: Semiconductors, Utilities, Banks


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