Commenting on the weekly jobless claims report and today’s trading Gorilla Trades strategist Ken Berman said:
The major indices are all mixed and flat at midday following a hectic and nervous morning session with stocks looking for direction in the wake of yesterday’s rout. The S&P 500 and the Dow both spiked below their lows from Monday at the open, but the Nasdaq managed to avoid a new seven-week low thanks to the relative strength of the tech sector. While the number of new COVID cases edged lower in the U.S., another round of travel restrictions and social distancing measures have been announced in Europe and Israel, and the hardest-hit sectors continue to be under pressure.
This Tiger Cub Giant Is Betting On Banks And Tech Stocks In The Recovery
The Weekly Jobless Claims Report Disappoints
In economic news, the weekly jobless claims report disappointed across the board, as even though continuing claims edged lower to 12.6 million, the improvement was smaller-than-expected, while the number of new claims increased unexpectedly to 870,000. On the bright side, new home sales smashed the consensus estimate, coming in above 2 million for the first time since 2006, similarly to Monday's existing home sales. The bearish German IFO sentiment number contributed to the negative open on Wall Street, but the fact that stocks bounced back in the wake of the U.S. economic releases is a plus for bulls.
Dow: 26,762, - 2 or 0.01%
S&P 500: 3,246 + 9 or 0.3%
Nasdaq: 10,728, + 95 or 0.9%
Russell 2000: 1,443, - 8 or 0.6%
Market breadth has been relatively weak this morning as a lot of small-cap issues hit new correction lows, with decliners outnumbering advancing issues by a more than 3-to-2 ratio on the NYSE at midday. 124 stocks hit new 52-week lows on the NYSE and the Nasdaq, while only 6 stocks hit new 52-week highs. The major indices have been experiencing wild swings around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a volatile afternoon. Besides tech stocks, materials, financials, and utilities also participated in the morning bounce, while real estate stocks got a nice boost from the bullish sales data, so we could be in for an interesting second half of the day. Stay tuned!