David Moenning�s Daily State of the Markets: 10/24
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Old vs New
Friday�s market was a classic example of old versus new. Earnings dominated the session and the results of the indices were largely dependent upon the concentration of old school versus new school issues. The DJIA, which by definition is designed to reflect the performance of industrial companies, contained Caterpillar, which disappointed the street and was punished for its sins with of a loss of almost -10%. A decline of this magnitude, when coupled with difficulties in Boeing, Merck, and United Technologies, was enough to drag the Dow to a loss of -66 on the day.
But on the other side of the aisle, the story was completely different. Google, which has become the poster child for everything good about technology and the internet, blew away earnings estimates and was promptly rewarded with a gain of $36.70 or +12%. This move (along with a similar move by SanDisk) was enough to help catapult the NASDAQ to a gain of 14 points or +0.7% on the day.
And in short, that was the day. So the bulls will pound the table about the Google growth story, while the bears will be sure to wag a paw at the potential problems in industrial America. So, in a way, the day was a bit of a draw and the jury is still out on which way we go from here. While the textbook says that Wednesday�s �follow through� day suggests we are now in a rally phase, the nagging concerns over inflation, energy, the Fed, and the consumer are sure to continue to register.
Turning to this morning, as Wilma begins to pound Florida�s coast, a decline in oil prices has stocks looking to open higher. Crude is testing the waters below $60 and is currently trading down -$1.13 to $59.50. Bond yields are steady with the yield on the 10-yr sitting at 4.40% and stock futures are higher (Dow +40, S&P +3.40, NASDAQ +3.0). Thus the bulls will be hoping to finally get things moving in the right direction and the bears will be watching oil prices closely.
Stocks "In Play" This Morning:
AMD � To cut prices for mobile CPUs by up to 26% according to DigiTimes
AMGN � Upgraded to Buy at AG Edwards
SGP � Reports $0.08 vs. $0.06 on rev of $2.30B vs. $2.27B
CD � Will split company into 4 pieces
QLGC � Citigroup says sees buying opportunity
MRK � Reports $0.65 vs. $0.62
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: none
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
Friday�s market was a classic example of old versus new. Earnings dominated the session and the results of the indices were largely dependent upon the concentration of old school versus new school issues. The DJIA, which by definition is designed to reflect the performance of industrial companies, contained Caterpillar, which disappointed the street and was punished for its sins with of a loss of almost -10%. A decline of this magnitude, when coupled with difficulties in Boeing, Merck, and United Technologies, was enough to drag the Dow to a loss of -66 on the day.
But on the other side of the aisle, the story was completely different. Google, which has become the poster child for everything good about technology and the internet, blew away earnings estimates and was promptly rewarded with a gain of $36.70 or +12%. This move (along with a similar move by SanDisk) was enough to help catapult the NASDAQ to a gain of 14 points or +0.7% on the day.
And in short, that was the day. So the bulls will pound the table about the Google growth story, while the bears will be sure to wag a paw at the potential problems in industrial America. So, in a way, the day was a bit of a draw and the jury is still out on which way we go from here. While the textbook says that Wednesday�s �follow through� day suggests we are now in a rally phase, the nagging concerns over inflation, energy, the Fed, and the consumer are sure to continue to register.
Turning to this morning, as Wilma begins to pound Florida�s coast, a decline in oil prices has stocks looking to open higher. Crude is testing the waters below $60 and is currently trading down -$1.13 to $59.50. Bond yields are steady with the yield on the 10-yr sitting at 4.40% and stock futures are higher (Dow +40, S&P +3.40, NASDAQ +3.0). Thus the bulls will be hoping to finally get things moving in the right direction and the bears will be watching oil prices closely.
Stocks "In Play" This Morning:
AMD � To cut prices for mobile CPUs by up to 26% according to DigiTimes
AMGN � Upgraded to Buy at AG Edwards
SGP � Reports $0.08 vs. $0.06 on rev of $2.30B vs. $2.27B
CD � Will split company into 4 pieces
QLGC � Citigroup says sees buying opportunity
MRK � Reports $0.65 vs. $0.62
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: none
To see David Moenning�s Trading Record, his (Strong Buy) List, or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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