Closing Wrap-Up, December 23
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December 23, 2008
Dow falls for the fifth straight session, but on very light volume. The Dow ($INDU) fell 100.28 points to close at 8,419.49. The S&P 500 ($SPX) lost 8.47 points to finish the session at 863.16. The Nasdaq ($COMPQ) gave up 10.81 points to 1,521.54. Volume came in at 984.4 million shares traded on the NYSE and 1.32 billion shares exchanging hands on the Naz. Market breadth was negative by a 12-to-19 and 11-to-18 margin the Big Board and Naz respectively.
Economic news was a focus Tuesday with a slew of reports this morning. Data same-store sales, GDP, housing and consumer sentiment were all released, showing the severity of the current recession. Auto stocks continued to fall Tuesday with General Motors (GM) and Ford (F) getting downgraded at Standard & Poor’s and Moody’s. S&P believes that bankruptcy risks remain high despite the $17 billion bailout provided by the government. GM shares fell 14.77 percent to $3.00 with F down 15.44 percent to $2.19.
Shares of Macy’s (M) fell 6.86 percent today with JCPenney (JCP) off 3.3 percent. A report by America’s Research Group and UBS showed that just 38.7 percent of Americans went shopping the final weekend before Christmas, down from 41.6 percent in 2007. Those that did shop tended to look for discounts, which benefited Wal-Mart (WMT). Nonetheless, WMT shares fell 1.25 percent Tuesday to close at $55.29.
In related news, same-store sales for the week ending Dec. 20 showed a 2.6 percent rise from the prior week, but down 0.6 percent year on year. This was the data reported by ICSC-Goldman. The Redbook report showed an even worse decline year on year at 1.0 percent. Overall, the S&P Retail Index ($RLX) fell 1.39 percent to 268.87. The 52-week range for this index is from 207.37 to 428.53.
Housing continued to show weakness in November with existing home sales down 8.6 percent to an annualized rate of 4.49 million units. Expectations were for a reading of 4.90 million. New home sales also decline, down 2.9 percent to a level of 407,000, also below estimates for a reading of 420,000. The median price for a new home is down 11.5 percent year on year with existing home prices off 13.2 percent. Unfortunately, there are few signs, if any, that we are near a bottom in the housing sector.
Though stocks have fallen this past week, the declines have been minimal and on light volume. In fact, the major market indices have formed a nice ascending triangle, which could result in a nice rally following the holidays.
Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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