Tag - Cshb

It started off as another ugly day for stocks. But the major indices rallied out of the hole after hitting their lows for the day around 11 AM. There was no particular fundamental catalyst propelling stocks prices higher. The move appears to be technically based, with traders apparently considering the drop to 886 on the S&P 500 close enough to support At 880 to start buying.

The S&P finished the day with a slight 2.3 point gain. The Dow Industrials finished up 44 points, completing a 122 point reversal. Only the Nasdaq finished in the red. The 9 point loss there was led by Apple (Nasdaq:AAPL) and Amazon.com (Nasdaq:AMZN).

 

Once again, there plenty of regional banks on the top performers' list. Park Federal (Nasdaq:PFED) was up 34%. Eurobancshares (Nasdaq:EUBK) rose 18% and Community Shores Bank (Nasdaq:CSHB) was up 18%. The only problem is that these stocks are rallying on extremely light volume.

At least with today's decliners, there are some stocks that aren't regional banks. TerreStar (Nasdaq:TSTR) dropped 20%. Spectrum Pharmaceuticals (Nasdaq;SPPI) was off 16% and Republic Airways Holdings (Nasdaq:RJET) was down 16%.

*****Despite the early declines, TradeMaster technical analyst Jason Cimpl had us prepared with his excellent video chart analysis that accompanied Thursday's Daily Profit. If you missed Jason's analysis, here's the link again.

 

Jason is expecting some upside later in the week. That would coincide with the start of earnings season. Alcoa (NYSE:AA) kicks things off tomorrow.

*****Bloomberg is reporting that the earnings decline is slowing. Year over year corporate earnings fell around 60% in the first quarter. Earnings were expected to have dropped another 34% last quarter and may slow to a 21% drop in the third quarter.

67% of companies beat expectations in the first quarter. But of course, when expectations were as low as they were, that's not particularly impressive. Plus, gains were accomplished through cost-cutting, which is only a temporary fix. Still it was enough to get a rally going. It will be interesting to see if earnings season can send stock prices higher again...

*****Oil has dropped to $64 a barrel. Demand is down as the economic recovery is not exactly robust. Back in 2005 and 2006, oil was the leading indicator for the economy. Even though oil prices were taking a bite out of consumers' budgets and even sparking some price inflation, stocks moved higher as oil demand indicated a thriving global economy.

Not much has changed. Even though comparatively lower gasoline prices give us a bit more spending money, rising unemployment is indicative of a still-weak global economy. Some analysts are saying that oil could fall to $50 a barrel.

*****China's still about the only country in the world that's growing. Its Purchasing Manager's Index rose for the 4th straight month. Current estimates are for a 7.8% GDP expansion this year. The U.S. will contract 2.7%, and that includes slight growth for the fourth quarter.

At SmallCapInvestor PRO, we've been ahead of the curve, adding Chinese stocks for the last two months. You can get our complete analysis on 4 top Chinese investments here.

*****Now, let's have a look at this week's economic data...

Wednesday, July 8, we get weekly crude oil inventories and the consumer credit report for May.

Thursday, July 9 we get weekly unemployment claims numbers and wholesale inventories for May.

Then on Friday, July 10, we get import and export prices along with the trade balance. We'll also be treated to a preliminary look at the Michigan Consumer Sentiment poll for July.

 

Stocks traded in a generally upward pattern today after a few dips before and after 10:00 A.M. for the indexes. As noted below, stocks were propelled by good news and a resolution to the sentencing of Bernard Madoff, the former trader accused of defrauding investors of tens of billions of dollars.

Notably the VIX, the Chicago Board of Trade Exchange Volatility Index, was down 2.4% today. The VIX is commonly used as a gauge of investor concern about future volatility as reflected as a benchmark for U.S. stock options. It measures the costs of utilizing options contracts as insurance against declines in the S&P 500.

The Dow Jones Industrial Average closed to day at 8,529, up just over one percent. The Nasdaq was up 5.8 points to close at 1,844 and the S&P 500 Index closed at 927, representing an 8.3 point gain.

The Russell 2000, an index representing the 2,000 largest small cap stocks, was the stand-out from the crowd, closing down 2.34 points to end the day at 511.

Gainers in the small-cap space were lead by Crown Crafts (Nasdaq:CRWS) up 45%; NewBridge Bancorp (Nasdaq:NBBC) up 33%; Craftmade Intl (Nasdaq:CRFT) up 34%; and EuroBancshares (Nasdaq:EUBK) up 27%.

Declining small-caps were lead by Cardium Therapeutics (AMEX:CXM) down 31%. Cardium had been one of Friday's big leaders, but gave up some of those gains after a Monday morning opening down 50 cents from the Friday close; others include Park Bankcorp (Nasdaq:PFED) down 29%; Community Shores Bank Corp. (Nasdaq:CSHB) down 27%; and Anchor BanCorp Wisconsin (Nasdaq:ABCW) also down 27%.

*****The positive headlines are everywhere this morning. On Bloomberg alone, we read that the worst is over for Treasury bonds, factory output improved in Japan for the second straight month and home values in England remained stable for the second straight month.  

It's enough to make you think that there's an economic recovery underway… 
Of course, the best news of all would be some price stability for homes here in the U.S. It appears that we're close to that point. 

 *****The rally that began on March 10 was largely about economic recovery. Or maybe it's more accurate to say that the rally began as investors surmised that the economy wasn't getting worse and that a complete financial meltdown had been averted.  

But in the ultimate irony, now that we are about to start the 3rd Quarter, you know, the quarter where actual growth is expected to return to the U.S. economy, traders are starting to question valuations, especially in the commodity space.  

Bloomberg reports that commodities rose 14% in the 2nd Quarter (April-June). Now, many expect prices for some commodities to fall by as much as 30%. That's because producers have expanded supply and investors have bought with little regard for fundamentals.  

*****Now as you know, I have been bullish on commodities, especially oil. But that doesn't mean that prices will make a one-way move higher. Commodities are called "cyclical" for a reason.

In the good economic times prices rise as production expands to meet demand. Once supply and demand reach some level of parity, prices start to drop and producers reel in production.  

The phrase "buy low, sell high" describes commodity investing to a tee. I've advised my SmallCapInvestor PRO readers to take some gains in oil stocks, but we'll be looking to buy back at some point this summer, because any price correction for oil and other commodities is all but certain to be brief.

*****Now let's have a look at the economic calendar this week. Remember, the 4th of July is on Saturday this year meaning the Federal government and the markets will be closed on Friday the 3rd. Many will treat this day as a holiday, including yours truly.  

Tomorrow, June 30th, we get Consumer Confidence, The Chicago PMI manufacturing survey and the Case-Schiller home price index for April.  

Clearly, the home price index is the big one. Expectations are that home prices fell another 18% in April. Any improvement will be bullish, as home prices area integral to economic health. 

Wednesday, July 1, we get construction spending, the ISM Index, truck and auto sales, pending home sales and oil inventories.  

Then, on Thursday, July 2, we get factory orders, initial unemployment claims, factory orders, average workweek (a measure of productivity), and the big one - non-farm payrolls. 

Of course, it's possible for payrolls and jobless claims to expand at the same time. Traders will look to non-farm payrolls as an indication that businesses expect better times ahead.   

*****If you missed Jason Cimpl's video chart analysis on Friday, you missed a great discussion about a potential head-and-shoulders pattern playing out on the Russell 3000. Here's the LINK again if you want to watch it. (Or go to trademasterstocks.com/videoreport/) 

That's it for today.

P.S. Over the weekend I sent investors some information on dividend stocks and how to use them to shore up your retirement funds (whether you're already retired or it's still some years away). I'm following with my Top Stock Insights service. In case you missed it, you can get that information HERE.

Affymetrix, Inc. (Nasdaq:AFFX), Novatel Wireless, Inc. (Nasdaq:NVTL) and Sigma Designs, Inc. (Nasdaq:SIGM) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $750 million.

HFF, Inc. (NYSE:HF), Community Shores Bank Corp. (Nasdaq:CSHB) and Cheniere Energy, Inc. (AMEX:LNG) are also among the top small-cap percentage losers.

Here are Tuesday's biggest percentage losers among small caps:

Genesco Inc. (NYSE: GCO), HSW International, Inc. (Nasdaq: HSWI) and Hardinge Inc. (Nasdaq: HDNG) are among the biggest percentage losers in Monday's trading among companies with market capitalizations under $750 million.

Here are today's biggest percentage losers:

Stocks are moving down while the price of oil rises due to election tensions in Nigeria.  In small-cap action, shares of Union Bankshares Corporation (Nasdaq: UBSH) are down after an analyst’s target price reduction, while Community Shores Bank Corporation (Nasdaq: CSHB) reported lower quarterly earnings.

At 2:34 PM the Russell 2000 had lost 2.11 points, or 0.25 percent, to 826.75.  The Dow Jones Industrial Average was down 29.74 points, or 0.23 percent, to 12,932.24.