From our morning headline, it’s obvious the market finished lower on Wednesday as the bears’ recent winning streak continues. Earnings have been light as we wind down 1Q reports and look ahead to July which is when 2Q earnings start. There are a few noteworthy announcements today but for the last few weeks the market has responded mostly to economic news which has been lousy. Yesterday was no different.
The bulls were hoping Ben Bernanke would provide a spark but he seemed more interested in blowing-off Jamie Dimon, JPMorgan’s (JPM, $40.39, down $0.33) CEO, and blaming other events for keeping the economy in 2nd gear, or are we still in 1st? Truth is, dude brought up a good point when he asked has anyone “bothered” to analysis what the hell is going on.
He is concerned that the Fed’s tough restrictions and regulations on banks is making it harder to lend, yet, interest rates are still at rock-bottom levels and the printing presses continue to run.
Mr. Dimon certainly didn’t get the answer he was looking for when Bernanke tried to crack a joke. Problem is – the Financial stocks are the joke as they once again weighed down the market along with Tech.
The Credit Card stocks also took a hit after the U.S. Senate defeated a plan to postpone new federal debit-card regulations. The fee on what banks charge retailers is going down and will cost the industry billions but it helps us as consumers and the retailers. Visa (V, $76.71, down $3.11) fell 4% and was looking to challenge its 52-week high of $83 after holding $80 for much of last week. We aren’t sure if this is a “buying opportunity” as $80 will probably act as short-term resistance.
As far as the indexes, they continue to drift towards our near-term support levels.
The Dow fell a double-deuce (22 points) and settled at 12,048 after trading to a low of 12,024. We have been mentioning 12,000 as a key area of support this week and the bulls will need to hold this level or face further downside risk which we covered in our Weekly Wrap. Wednesday’s loss was the sixth straight for the Blue-Chips and their longest slide since July 2010.
The S&P 500 dropped 5 points and finished at 1,279. The index came within 2 points of touching our first wave of support at 1,275 and also fell for the sixth straight session. This hasn’t happened in over 2 years.
The Nasdaq got smashed for a 26 point loss and ended at 2,675. Tech reached a bottom of 2,671 and looks all but certain it will test our downside target of 2,650 by week’s end if there isn’t a bounce.
Speaking of which, where is that Bon Jovi Bounce?
Wall Street has been looking for a near-term rebound and the bulls have done relatively well over the past two sessions following Monday’s plunge. The good news is futures are pointing towards a decent open following an “okay” jobs report and that there was no changes to Europe’s monetary policy this morning.
Dow futures are up 30 points; S&P futures are higher by 3 points; Nasdaq futures are showing a 4 point pop. Subscribers, check the Members Area for the updates.