With hopeful expectations and positive catalysts accounted for in Monday's percentage gainer, Tuesday's early trade is currently hunkered down for some FedSpeak on light nibbling and schnitzeling. As of 10:30 ET, the NASDAQ Composite ($COMPQ) and S&P500 ($SPX) are up .07% to .18% on lackluster, but mostly benevolent wiggles and giggles.
What a difference a day can make, as Tuesday's rather anemic and quiet gains and headlines pale in comparison to the market's version of Mad Monday. A couple of reports and news releases have been offered and mostly of the benevolent type. For instance, in the latest housing development February new home sales [up 9% @1.53M] increased and came in above expectations while building permits [1.53M] were in-line with estimates. The data suggests that January's overwhelming weakness was more an anomaly than the start of another leg of ugly behavior. With that said, though, while the report might come as a relief to a few investors, most seem to be focused elsewhere (XHB up 13 cents @ 34.13) as evidenced by the group's and overall market reaction, umm, inaction.
On the corporate side, a strong showing for another Merger Monday is seeing a minor bit of slippage into today's headlines. Affiliated Computer Services (ACS) has received a buyout offer in management-led / Private Equity deal valued at $8.2 billion. The M & A activity continues to lend support to the broader indices as the deals signal to investors that liquidity, valuations and the interest rate environment are still compelling to institutional-type investors. ACS is up 8.75 at 60.04.
Elsewhere, the rumor mill is buzzing in technology. Handheld device manufacturer Palm (PALM), which reports later this week, is the object of takeover chatter. The stock gapped up and is trading at nine-month highs as the tech-based website Unstrung.com proclaimed the company very close to deal for $20-a-share and as soon as March 22nd. PALM is up 75 cents at 18.89. Intraday, Motorola (MOT) has traded up on heavy volume. The mobile device maker of the popular Razr phone is up 51 cents at 18.80 on the latest round of LBO chatter to hit the stock in recent months.
Finally, investors are finding some buy side interest for a few of Monday's minority casualty list. The semiconductors (SMH) are up about .40% after failing to participate in yesterday's broad-based rally and showing a bit of minor relative strength. Part of the credit goes to SanDisk (SNDK). The NAND flash memory specialist was upgraded this morning to a "Sector Outperform" with a $50 target at CIBC.
GROWTH & MOVERS COVERAGE
Industry / Sector
RS / EPS 1YR%
MEMC Elec Matls
Semis / alt energy
Last night on the options page at Investors.com this trader/writer scribed an article about appropriate buying of options premium and one current case where the body of evidence suggested a bullish situation. The analysis pinpointed some interesting Call buying which preceded today's 6% thrust to fresh all-time-highs in MEMC Electronic Materials (WFR).
The buying was viewed as somewhat curious in that it occurred while the semis and WFR were both weak in an otherwise broad-based rally. Further, it was pointed out as it was interpreted that overall, the buyers, whether they be of the directional or non-directional school of business, had the upper hand due to the slightly cheap pricing at the time. While the price pattern established, a âshort' cup-with-handle might not be a textbook, allowances for a purely discretionary market, quite often do add up after all. WFR is up 2.25 at 56.60 and pulling back hard after session highs of 58.85.
Select reports scheduled after the market close and in the premarket:
Industry / Sector
Q-Estimates / Prior Yr.
.29 / .32
.22 / .19
1.88 / 1.79
.37 / .27
.70 / .67
Economic releases on tap:
Wall Street Forecast
INDICES & MARKET MOOD
It turns out that Investors.com is sticking to the âmarket under correction' bit, despite yesterday's gains. In consideration of gains just teetering around 1% and slightly below average volume, when all was said and done, that was to be expected. They did however point to Friday's Quad Witching, which means they do attempt to dissect the statistic when known aberrations are apparent. Good for them.
Half way into the lunchtime noon balloon and "Folks, we've got a rally underway" as CNBC might alert us too. I spoke about the possibility of just such a bullish embrace in this morning's Growth Stock report. It was thought that it would be very convenient for the market to go up, when purportedly, everyone and their mother is anxiously and nervously awaiting the Fed Decision Wednesday afternoon. With Tuesday marking day number six of the FTD count and volume easily beatable, will today mark the official âmarket in uptrend' by session's close? Probably not. But for other directional and non-directional strategists the double bottom continues to produce on a whole and that deserves a "Booyah!" nonetheless.
Index or Sector Proxy
S&P500 ETF (SPY)
ST Bull / Neutral
136.20 â 136.75
141.50 â 143.50
NASDAQ 100 (QQQQ)
ST Bull / Neutral
41.75 â 42.25
44 â 44.80
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.