12:55pm (EST)
The market has been on both sides of the breakeven line today as the bulls and bears try to position themselves for the week ahead. Economic news has been mixed and the bulls have the early edge as they try to recover from last week’s losses.
The National Association of Home Builders said its August housing market index fell to 13 versus a July reading of 14. It was the lowest reading since March 2009 and here’s how bad that number really is. A reading over 50 on this index means the market is positive on the sector while a reading below 50 indicates negative sentiment. The last time the index had a reading above 50 was over 3 years ago, in April 2006.
We get another peak at housing on Tuesday when the Commerce Department releases its report on home construction in July. Look for more bad news.
Elsewhere, the Federal Reserve Bank of New York said its manufacturing index rose to 7.1 in August from 5.1 in July. Wall Street was looking for the index to rise to 8. Although there was improvement, the number was still below expectations.
We did a big write-up on Research In Motion (RIMM, $50.94, down $2.46) last night in our Weekly Wrap and said we should be getting some numbers on sales of its new BlackBerry Torch soon. Well, we don’t have any hard numbers but we do know there weren’t any lines over the weekend in the major cities like there had been for Apple’s (AAPL, $249.59, up $0.49) iPhone and the device hasn’t been selling out. When RIMM launched the BlackBerry Storm there was huge consumer interest as lines formed and the product sold out in many places on day 1.
We highlighted RIMM’s inability to bring a slick, smartphone device to the market sooner and we are already hearing reports of a new Droid Pro that is due out in November. Motorola’s (MOT, $7.83, up $0.19) Droid is based on Google’s (GOOG, $489.70, up $3.35) Android 2.2 operating system and there is also the possibility of Motorola launching a tablet device as well.
Add it all up and it shows RIMM is clearly playing catch-up.
As we head to press, the Dow is up 22 points to 10,325 while the S&P is higher by 3 points to 1,082. The Nasdaq is showing a gain of 20 points to 2,193.
We have an important update as we are locking in gains on our J. C. Penney (JCP, $19.87, up $0.05) put trade from last week. We are showing a return of over 80% so we want our subscribers to close the rest of their positions.
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