Tag - Tstr

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.

The Russell 2000 (IWM) fell as investors turned their attention to the economy. The small-cap index let go 3.85 points, or 0.55%, to 698.93, its fourth decline in the past five days. The Dow Jones Industrial Average (INDU) lost 64.87 points, or 0.53%, to 12,182.13.

On a year-to-date basis, the Russell 2000 has shed 8.76%, while the Dow has let go 8.16% and the S&P 500 has slashed 9.33%.

There was no major economic news scheduled for today and little on the corporate front and stocks small and large spent the first half of the session trading sideways.

The mood in pre-market trading was slightly bearish following news that an official from the U.S. Federal Reserve said that the economy is headed for a slowdown.

“I consider it most probable that the U.S. economy will experience slow growth, and not outright recession, in coming quarters,” said Janet Yellen, president of the Federal Reserve Bank of San Francisco, in a speech in Honolulu.

Concerns about the future of the economy are what led the U.S. Congress to approve a $168 billion economic stimulus package that consists of tax rebates and business incentives. President Bush said he would sign the bill next week. Rebate checks will be mailed to households and individuals as early as late May.

Trading was volatile as the Russell 2000 seesawed up and down before falling into the red at about 12 p.m. ET, and slumping to its session low shortly before 2 p.m. ET.

The Russell 2000 (NYSE: IWM) is posting a gain as stocks are trading with no clear direction.

At 10:24 a.m. ET, the small-cap index had added 0.63 points, or 0.09%, to 703.41. The Dow Jones Industrial Average (INDU) was down 6.99 points, or 0.06%, to 12,240.01.

Small-cap stocks opened lowered but quickly bounced higher, leaving their bigger counterparts behind.

With little economic news scheduled for today, investors are looking for direction. The mood in pre-market trading was slightly bearish following news that an official from the U.S. Federal Reserve said that the economy is headed for a slowdown.

“I consider it most probable that the U.S. economy will experience slow growth, and not outright recession, in coming quarters,” said Janet Yellen, president of the Federal Reserve Bank of San Francisco, in a speech in Honolulu.

Elsewhere, the U.S. Congress approved a $152 billion economic stimulus package that consists of tax rebates and business incentives that will hopefully prevent a recession.

Helping the small-cap index rise is wireless communications company TerreStar Corp. (Nasdaq: TSTR), which saw its shares soar more than 30% on news that it will get about $300 million from investors.

Also rising is San Jose, Calif.-based VNUS Medical Technologies, Inc. (Nasdaq: VNUS), which swung to a fourth-quarter profit.

PDF Solutions, Inc. (Nasdaq: PDFS) did even better, reporting an increase in fourth-quarter profit. But shares of the provider of technologies and services to semiconductor companies are down on news of disappointing first-quarter guidance.