Stocks jumped for the second day in a row as the bounce off the low end of the ascending channel in the S&P 500 continued. That index added 1.03% while the NASDAQ gained 1.2%. There were no obvious catalysts for the rally other than technical reasons and the now daily rumor that Spain will soon ask for a bailout. The Financial Times reported Spain is prepared to seek financial aid from the euro area and is waiting for a decision on how the request would affect Italy.
After the bell both IBM (IBM) and Intel (INTC) reported; the former had a revenue miss and the latter guidance that did not please the Street. Which is remarkable considering how far Intel has fallen. Both stocks are down over 3% in after hours as this is being written, so if there is a similar situation tomorrow morning it should pressure markets in the early going.
Intel is down to the mid $21s in the after hours which is poking at the lows seen last week....
IBM has fallen to the upper $203s, testing its 50 day moving average...
As for the indexes, the S&P 500 has now bounced sharply for the second day, helping to erase all of October's losses as it returns back to the middle of the ascending channel it has been traveling since June. It is the most healthy of the major indexes.
The NASDAQ has bounced back to the "neckline" of the head and shoulders formation we have been discussing the past few weeks - a move above that level would certainly be constructive but until that happens caution is to be warranted.
This bounce the past 2 sessions has helped work off the oversold condition seen late last week and pushed some key oscillators back to a neutral position.
Citigroup (C) continued its very strong run, despite a surprise announcement about the resignation of its CEO Vikram Pandit - which normally hits stocks hard. Maybe that says something about the CEO!
Today's inflation data cemented the social security benefit cost of living adjustment at 1.7% for 2013.
- The increase announced by the government Tuesday is less than half of the 3.6% rise in benefits that beneficiaries received this year. But it's better than the previous two years, when benefits did not rise at all.