A bit of an economic spook and looming core CPI are being countered by a less risk-averse investor and some follow-thru on Wednesday's attempted rally day. As of 10:30 ET, the NASDAQ Composite ($COMPQ) and S&P500 ($SPX) are up .34% to .40% on slightly lighter, but above-average reasons for caring.
In Thursday's first half investors are showing further appreciation for the sturdier bottom now in place, despite heightened price pressures, a disappointing regional report and looming inflation data at the consumer level. The day's lead story to reconsider showing too much bullish ambition would be on the economic front. PPI data released in the premarket came in well-above Wall Street's expectations of .5% and .2% with actual increases of 1.3% and .4% respectively. The figures, however, are somewhat notorious for being volatile. Further, with the more significant CPI data slated for Friday morning, investors seem content with playing the waiting game while enjoying a slightly bullish attitude.
Elsewhere, the NY State Empire Index came in well-below expectations. The regional survey on manufacturing dropped precipitously to a level of 1.9 versus analysts' estimates of 17. The very slight positive reading still suggests growth, but is far removed from February's 24.4. While the report would be hard-pressed to elicit calls of support from market bulls, the good news is that it's only one regional reading. With the 10-Year yield ratcheting slightly higher to 4.53%, but just off year-to-date consolidation lows of 4.47% set in yesterday's session, those market participants seem to concur.
On the corporate side a handful of catalysts or lack thereof are actually helping investors with the current buy side decision. Thursday marks a second day of easing headline scandals on the sub prime front. Many of those names (LEND, FMT, FBR, WM, CFC and MTG) are finding fresh bids off their respective well-entrenched technical shellackings of late. Elsewhere, a bit of M & A news is on the radar. Cisco (CSCO), the world's largest network communications announced a definitive agreement to purchase all outstanding shares of internet conferencing provider WebEx (WEBX) for a reported $57 a share. WEBX is up 10.25 at 56.24 on the news, while CSCO shares are trading flat on the session at 25.85 after management announced the deal should be neutral to its FY08 earnings.
Merger buzz has the Intercontinental Exchange (ICE) courting a corporate marriage with fellow âbricks & mortar' operator CBOT Holdings (CBOT). BOT is up 22 points to 188.10 and slightly above the $187.34 proposal price that ICE offered. Investors apparently believe the deal could represent a hostile and higher bid before any handshakes are solidified. Meanwhile, ICE shareholders are receiving the cold shoulder from other investors as it trades slightly under pressure, down 4.85 at 127.10.
And finally, Bear Stearns (BSC) is finding investor support on the heels of its earnings announcement. The Broker / Dealer (IAI) narrowly beat analyst estimates by .02 cents a share in delivering earnings of 3.82. That's not exactly a rousing number for proponents of growth and in an industry / stock that have already seen a long bullish cycle play itself out. Nonetheless, with Wednesday's lows marking a near 20% decliner from recent highs, a few traders are finding the 200-Day MA suitable for bullish ambitions in âda Bear. BSC is up 3.25 at 148.54.
GROWTH & MOVERS COVERAGE
Industry / Sector
RS / EPS 1YR%
Select reports scheduled after the market close and in the premarket:
Industry / Sector
Q-Estimates / Prior Yr.
.99 / .76
.15 / .11
.37 / .63
.29 / .43
Economic releases on tap:
Wall Street Forecast
CPI & Core
IP & CU
INDICES & MARKET MOOD
The "FTD" count is now at day two in the S&P500 and NASDAQ. As attempt number three since the markets precipitous drop back in late February, maybe this time will bring about a successful conclusion for intermediate bulls. With hard corrective moves in place, double bottom patterns prevalent and the highest levels of investor fear since last summer, there are a lot of reasons to monitor for fresh upward trend development. And it almost goes without saying, monitoring for limited risk alternatives always makes sense and âcents' for confirmation of a much better suited position.
Index or Sector Proxy
S&P500 ETF (SPY)
Neutral / LT Bear
138.05, 136.20 - 137.50
141.80 - 143
NASDAQ 100 (QQQQ)
Neutral / LT Bear
41.75 â 42.25, 40.60, 39.40 - 40
43.25 â 44
Staff Writer & Options Strategist
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The information offered here is based upon Christopher Tyler's observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.