Seen lower as world stocks sink, but HPQ news supports
Small-cap stocks are expected to open lower, pressured by slumping equity markets around the world overnight, with Europe off some 2% and emerging markets down 3%. Bank stocks, mining companies and oil services shares were soft overseas, flashing a broad-based show of weakness, but stock index futures bounced solidly off the morning lows when a key technology firm raised guidance this morning. Stock index futures were off about 1% ahead of the opening, which suggests the Russell 2000 (NYSE:IWM) will open near 447.
The PPI report headline figure came in at minus 2.8%, which was a much bigger decline than the forecast of 1.8%. Stock index futures were in the midst of a hard bounce off the lows ahead of PPI, and pulled back slightly after the inflation headlines. Now that the PPI data is out of the way, investors await an appearance on Capital Hill from Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, slated to begin around 9:30 a.m. ET.
Looking at market activity around the world, Japan was down 2.2%, Hong Kong off 4.5%, China down 7.4%, Taiwan down 3%, Australia off 3.2%, South Korea down 4% and India off 3.8%.
On the individual company scene, there were some pockets of bullish news this morning.
Hewlett-Packard Co. (NYSE:HPQ) jumped more than 10% after the firm raised guidance, which has been unheard of in this difficult environment. Clearly, stock index futures bounce off the lows on the HPQ news. In other corporate news, Yahoo Inc. (Nasdaq:YHOO) showed double digit advances overnight on news that the CEO would step down, which raised hopes for a deal to get brokered with Microsoft Corp. (Nasdaq:MSFT). Home Depot Inc. (NYSE:HD) beat the forecast and climbed 2% in pre-market trading.
General Motors Corp. (NYSE:GM) slipped about 1% in pre-market activity after the White House opposed a plan pushed by Senate Democrats for a $25-billion bailout of the nation’s auto industry. There is a thought process among some market watchers that the overall market will remain unsettled until a definitive answer to the carmaker woes is known.
Looking at the charts, the market appears poised to open below support at 450, which opens the door to retest the Oct. 28 low at 442; a breach of that point would then clear the way to retest the Nov. 13 low of 433. If the market can mount a rally today, resistance is at 464 and 479.
The PPI report headline figure came in at minus 2.8%, which was a much bigger decline than the forecast of 1.8%. Stock index futures were in the midst of a hard bounce off the lows ahead of PPI, and pulled back slightly after the inflation headlines. Now that the PPI data is out of the way, investors await an appearance on Capital Hill from Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, slated to begin around 9:30 a.m. ET.
Looking at market activity around the world, Japan was down 2.2%, Hong Kong off 4.5%, China down 7.4%, Taiwan down 3%, Australia off 3.2%, South Korea down 4% and India off 3.8%.
On the individual company scene, there were some pockets of bullish news this morning.
Hewlett-Packard Co. (NYSE:HPQ) jumped more than 10% after the firm raised guidance, which has been unheard of in this difficult environment. Clearly, stock index futures bounce off the lows on the HPQ news. In other corporate news, Yahoo Inc. (Nasdaq:YHOO) showed double digit advances overnight on news that the CEO would step down, which raised hopes for a deal to get brokered with Microsoft Corp. (Nasdaq:MSFT). Home Depot Inc. (NYSE:HD) beat the forecast and climbed 2% in pre-market trading.
General Motors Corp. (NYSE:GM) slipped about 1% in pre-market activity after the White House opposed a plan pushed by Senate Democrats for a $25-billion bailout of the nation’s auto industry. There is a thought process among some market watchers that the overall market will remain unsettled until a definitive answer to the carmaker woes is known.
Looking at the charts, the market appears poised to open below support at 450, which opens the door to retest the Oct. 28 low at 442; a breach of that point would then clear the way to retest the Nov. 13 low of 433. If the market can mount a rally today, resistance is at 464 and 479.
About the Author
Kevin Pendley covers the Russell 2000 index for SmallCapInvestor.com and writes a weekly technical analysis column.
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