The selling pressure never let up today. This morning, the retail numbers came in on the soft side, which added to the fear that the US economy is heading into recession. Citigroup’s (C) earnings made things worse, with an $18.1 billion write-down. The Dow finished down 277.04 points; SPX lost 35.30 points; Nasdaq tumbled 60.71 points.
Here’s how the market looked at the close:
It is a “sea of red”. INX2 (Internet) and SOX (semiconductors) were weak, down 2.94% and 3.15%, respectively. USO (oil) fell almost 2% and OIH (oil services) stumbled more than 5%! GLD (gold) and GDX (gold miners) finally took a breather. XLF (financials) continued its slide with another 4.12%. PBW (clean energy) slid 6.69%, and FXI (Chinese ADRs) were hit the hardest, down 7.55%!
SPX
SPX lost 35.3 points to close at 1380.95. It is very close to the support level at 1375, which it will likely test tomorrow. Below 1375, it could be looking at 1325 before finding a solid support. So, how SPX does with 1375 is very, very critical tomorrow.
Nasdaq
Nasdaq tumbled 60.71 points to close at 2417.59. Its next nearest support is at 2400. Below 2400, there’s a support at 2350, set in March 2007.
The market sentiment continues to be horrible. Yesterday‘s small positive shift due to IBM’s preliminary earnings results proved to be short-lived. Adding injury to insult, after the market, INTC puts further pressure on the street with its earnings, which missed the estimates. Its shares fell 14.15%. This also prompted “more” heavy selling, in AH, on some of the biggest tech names: GOOG down 2.05%, or $13.1; AAPL down 3.57%, or $6.03; RIMM down 4.14%, or $3.76; BIDU down 3.52%, or $11.21!
Today’s PPI data came in benign, but, the bad news outweighed the neutral news. Tomorrow, CPI and housing data are due. But, the sentiment is such that good news seem to be taken with a grain of salt, while bad news are being met with extreme action. Much scrutiny is now on the Fed, as many are feeling that the Federal Reserve hasn’t done enough to keep the economy going. The Fed had promised to act decisively to help the economy. With the retail numbers coming in low and inflation data coming in benign (PPI), perhaps the time for the Fed to act is now, and allow itself room to make further adjustments at the scheduled meeting on January 30.
Good night and HappyTrading! ™
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[...] The question is: can the market come out of the crashing waves alive? The market opened lower on INTC’s disappointing earnings. The CPI came in benign. After the downdraft in the morning, the market bounced. It stayed in the [...]
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