Change text size

• Email This Article
• Print This Article
• Digg This
• Delicious
• Subscribe

Bears regain control of stock market, leaving major market indices sharply lower. The Dow ($INDU) lost 283.10 points to close the session at 11,349.28. The S&P 500 ($SPX) gave up 29.65 points to 1,252.54. The Nasdaq ($COMPQ) declined 45.77 points to 2,280.11. Volume was solid on the session with 1.65 billion shares traded on the NYSE and 2.55 billion shares exchanged on the Naz. Market breadth was negative by a 6-to-26 and 9-to-20 margin on the Big Board and Naz respectively.

There were very few winners Thursday with the auto sector seeing some of the largest declines. Ford (F) shares fell 15.3 percent after the company reported a loss of almost $9 billion in the second quarter. The loss came mostly on write-downs on its weak truck and SUV divisions. The company does not expect a turnaround in the U.S. economy until 2010 and this didn’t sit well with traders.

Shares of Daimler (DAI) and General Motors (GM) also fell sharply, down 12.1 percent and 11.1 percent respectively. DAI reported its earnings for the quarter, which were down 25 percent. The company also lowered its outlook for the year. GM shares fell in sympathy with other auto dealers on the view a weak economy and record high gasoline prices will keep auto sales disappointing.

Economic data this morning did little to ease concerns about inflation and economic slowing. Jobless claims rose above 400K, though the Labor Department noted that there were many factors involved. The four-week moving average rose slightly to 382,500. This is still a high level and is likely to keep estimates for nonfarm payrolls down.

The housing sector has been a very big part of the problems in the economy and this continued to be evident in the release of existing home sales data for June. Sales of existing homes fell 2.6 percent to an annualized rate of 4.86 million units. This was worse than expected and put the year on year decline at 15.5 percent. Supply rose to 11.1 months at current sales rates, up from 10.8 in May. Even so, the median price of a home rose 3.5 percent to $215,100, but in the past year, home prices are down 6.1 percent.  

Friday will be another busy day for economic news with data on new home sales, consumer sentiment and durable goods orders all on tap. It will be interesting to see if the bulls reemerge after Thursday’s weakness or if the bears can push the major market indices back to previous lows.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

• Email This Article
• Print This Article
• Digg This
• Delicious
• Subscribe

Recent Articles by Jody Osborne, Optionetics.com

• November 20, 2008
  Economic Watchdog, November 20
• November 20, 2008
  Closing Wrap-Up, November 20
• November 20, 2008
  Morning Watch, November 20
• November 19, 2008
  Economic Watchdog, November 19
• November 19, 2008
  Closing Wrap-Up, November 19