IG Markets - Closing Commentary 28 July, 2010 - Jul 28 10 19:33 EDT
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IG Markets - Closing Commentary 28 July, 2010
Excerpts taken from The Trader Advantage Program
Equities stayed in negative territory all day today; however, the light sell-off was hardly enough to convince anyone that the bears had regained control. The Dow gave up 39.81 to close just under the 10500 mark. The S&P lost 7.71 to end the day at 1106.13. Hurt by weakness in the tech sector, the NASDAQ lost over 1%, or 23.69 points to settle at 2264.56
After what was essentially a pause in the markets yesterday, equities were under a bit of pressure early today, with no help for the market bulls found in the economic reports.
Before the opening bell, the Census Bureau reported that both Durable Goods and Core Durable Goods Orders had fallen into negative territory during the month of June with a reading of -1.0% and -0.6%, respectively. This was definitely not a positive sign for the struggling US manufacturing sector. Following up to, and somewhat confirming the Durable Goods Orders reports, the Federal Reserve released their Beige Book of current economic condition which showed that activity was slowing in several regions. With economic activity remaining “unusually uncertain” it is difficult to tell how far earnings season may take us.
Earnings today were good, but we really didn’t see any blockbusters that could stoke an equity rally. Wireless telecom provider Sprint posted bigger losses than expected, but the future looked somewhat better with a solid growth figure in their number of subscribers. Boeing’s profits shrunk for the quarter but still managed to beat the consensus forecast while Conoco Phillips’ second quarter net profit sailed past analyst’s expectations.
We’re still seeing this tug-of-war take place between positive earnings fueling the bulls and negative reports regarding the underlying economy fueling the bears. Perhaps adding to the bear’s positive day was simply the thought that after such a steep climb off the early July lows, it was time to lock in profits. When traders are bombarded by mixed messages and the trading waters become murky, we are likely to see price gravitate toward previous levels. With the June 21 high near 10600 looming on the Dow, many may have thought that this was as good as any place to lock in some short-term profits.
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