Commenting on the key economic releases, th Philly Fed Index and today’s trading Gorilla Trades strategist Ken Berman said:
The major indices are all trading in the red at midday following a bearish overnight session and an encouraging morning bounce on Wall Street. The technically weak tech sector has been weighing on the broader market this morning, and the Nasdaq got close to its correction low from last week at the open, but bulls stepped in to buy the dip yet again. The large-cap benchmarks are all trading near their 50-day moving averages, and the proximity of the key indicators could mean that we are in for a very active and volatile afternoon.
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Philly Fed Index In Line With The Consensus Estimate
This morning's key economic releases leaned bearish as even though the Philly Fed Index was in line with the consensus estimate, showing continued growth, several other indicators surprised on the downside. Building permits and housing starts both missed by wide margins, cooling the lofty expectations regarding the housing recovery, while new jobless claims came in slightly above expectations at 860,000. The number of continuing claims dropped by more than 900,000, to a still very high 12.63 million, and that declining trend could provide support for stocks in the coming weeks.
Dow: 27,986, - 46 or 0.2%
S&P 500: 3,363, - 22 or 0.7%
Nasdaq: 10,925, - 126 or 1.1%
Russell 2000: 1,547, - 5 or 0.3%
Market breadth has been relatively strong this morning, with decliners only outnumbering advancing issues by a 2-to-1 ratio on the NYSE at midday. Only 13 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 26 stocks hit new 52-week highs. The major indices have been trading above their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to intraday buying pressure. The industrial sector has been by far the strongest this morning, and thanks to that, the Dow all but erased its early losses, but the weakness of the real estate stocks and tech and consumer-related issues remains apparent even following the morning rally. Stay tuned!