Another session of mild digestion after Tuesday’s large rally; stocks started off strong but gave up some steam late in the day. We ended with mixed indexes; the S&P 500 gained 0.17% while the NASDAQ fell 0.13%. Tomorrow pre-market we will get labor data from the U.S. government; it has been two bad months in a row in terms of non farm payroll gains so people will be watching to see if there is some reversion to mean and some revisions upwards to the last 2 months of data due to weather. Since the bar is so low tomorrow any positive number might be enough to give the market a jolt to push it up to the upward extreme level on the NASDAQ chart below. (upper purple line)
In economic news:
The government also reported a 0.7 percent decline in factory orders in January, slightly more than the consensus forecast for a 0.5 percent drop.
Indexes remain on track if a bit overbought short term… keep an eye on NASDAQ in the coming days if/when it hits that upper purple trend line.
For you wrestling fans out there, World Wrestling Entertainment (WWE) has had a mind numbing run the past half year – sub $10 to nearly $30 today; look at that volume as momentum investors pile in. When stocks go parabolic like this after an already large run it starts getting very dangerous to own.
Baidu (BIDU) had a strong day as a lot of “Chinese internet” stocks have seen momentum money flow into them the past few weeks.
Costco (COST) had a rough session after the warehouse club operator reported a 15 percent drop in quarterly profit, trailing analysts’ estimates.
Shares of Staples (SPLS) fell sharply after the office-supplies chain projected a quarterly drop in sales and said it would shut as many as 225 stores in North America.
It was a rare bad day for the biotech space as Gilead Sciences (GILD) after a product recall:
According to a post on the FDA’s website, Gilead initiated a nationwide recall of of about 39,000 bottles of its Atripla treatment. Atripla is a treatment for HIV-1 infection in adults and children at least 12 years old.