8:45am (EST)
The bulls ended August with a win as they extended their streak to four straight sessions and 7-out-of-8 after saying goodbye to a nasty month. Wednesday’s action was strong at the open but the bull train lost some steam when news broke that AT&T’s (T, $28.48, down $1.14) planned merger with T-Mobile USA isn’t going to happen, Captain.
The news sent shares of AT&T tumbling and weighed heavy on the market for the rest of the day as it slipped into negative territory by late afternoon. However, the bulls found their footing in the final hour and made one last push into the close to come out on top.
The Dow gained 54 points, or 0.5%, to finish at 11,613. The index closed above our 11,600 target and traded to a high of 11,712. The next wave of resistance before flirtation with 12,000 will come in at 11,750-11,800. A pullback from here could lead to a test back down to 11,350. For the month, the Dow was down 4.4%, but is now showing a slight gain of 0.3% for the year, or 36 points.
The S&P 500 added 6 points, or 0.5%, and ended at 1,219. We were looking for a close above 1,225 after the index kissed 1,230 but we fell just short. Normally this would be close enough for government work but this is the stock market which is a little harder to figure out. Joking aside, we said the S&P could run to 1,250 if this level were cleared but yesterday’s action was funky and there is still risk of a pullback to 1,200 if current levels don’t hold. For the month, the S&P fell 5.7% which represented its worst showing in 3 decades. The back to even point for the index is 1,257.
The Nasdaq chipped-in with a 3 point pop to settle at 2,579. Tech traded to a high of 2,611 and we said to watch for the battle at 2,600. The bulls are still pushing for 2,625-2,650 if cleared while support comes in at 2,550-2,525. As for August, the Nasdaq dropped 6.4% and is down about 75 points for 2011.
Futures are pointing towards a slightly lower open this morning after the update on Initial Claims which fell 12,000 to 409,000. The 4-week moving average rose by 1,750 to 410,250. Continuing Claims came in at 3.735 million versus 3.753 million the week before.
Dow futures are down 6 points to 11,597 while S&P futures are off by 2 points to 1,216. Nasdaq futures are up 2 points to 2,243.
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