Stocks see mixed trading Thursday, which has the bulls feeling just fine. The Dow ($INDU) added 13.62 points to close at 12,461.14. The S&P 500 ($SPX) was flat, off just 0.50 points to 1,434.54. The Nasdaq ($COMPQ) lost 4.18 points to 2,451.74. Volume picked up some on the session with the NYSE trading 1.37 billion shares and the Naz turning over 1.62 billion. Market breadth was slightly positive by a 17-to-16 and 16-to-15 margin on the Big Board and Naz respectively.
Motorola (MOT) was a disappointment for traders Thursday with the stock falling 6.62 percent to $17.50 a share. The cell phone maker continues to see problems and analysts are afraid an end is still not in sight. The company didn't help out its own cause by announcing lower than expected earnings and profits and warning about the future. In fact, MOT announced that sales would be $1 billion short of estimates.
Oil stocks were an outperformer today on a 3.5 percent gain in crude prices. ExxonMobil (XOM) shares rose 1.54 percent on the session with crude closing at $61.69 a barrel. With the Fed opening the door to rate cuts ever so slightly yesterday, fears of a global slowdown in growth have abated some. This has raised concerns that current supply will not be able to keep up with demand and that this will lead to higher fuel prices.
The subprime lending market continues to be a concern with Congress seeking answers in a meeting with Fed banking regulators. So far, the Fed sees no spillover from the subprime problems into the broader lending sector, but they do acknowledge that this is possible. At the same time, Countrywide Financial (CFC) stated that subprime loan defaults could hit unprecedented levels this year. CFC shares fell 1.5 percent to $36.38. KB Homes (KBH) announced that its earnings fell 84 percent in the first quarter and that it doesn't see much improvement in the housing sector through 2007. KBH shares also saw losses on the session of 1.1 percent.
Overall, despite a lack of gains for the major market indices today, the bulls should be pleased with what has occurred this week. After three consecutive days of gains, stocks saw only modest selling and this points to bullishness ahead. Of course, disappointing inflationary data or sub par earnings outlooks could change sentiment, but so far so good as far as the bulls are concerned.
Senior Staff Writer & Options Strategist
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