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Daily Blog -01/14/09- 1:29 P.M.


Major Indices Breakdown

Wednesday's session was a tough one for investors. Stocks jolted lower on another round of negative earnings results and a dismal December retail sales report. Financials were leading the way in what is a very broad-based market sell-off. Not one sector index is currently in positive territory.

Here's a quick snapshot of market performance today:

Dow Industrials .......  -2.6%
S&P 500 index .........  -3.0%
NASDAQ Composite ......  -2.9%
Russell 2000 index ....  -3.3%
-----------------------------
Transportation index ...  -4.2%
Airline index (XAL) ....  -5.3%
Railroad index (DJUSRR).  -5.1%
Cyclical index (CYC) ...  -4.9%
Semiconductor index ....  -3.0%
Gold & Silver (XAU) ....  -4.2%
Banking index (BKX) ....  -5.2%
Broker-dealers (XBD) ...  -3.8%
Insurance index (IUX)...  -5.5%
Healthcare index (HMO)..  -4.0%
Casino & Gambling ......  -5.5%
-----------------------------
Oil services index (OSX)  -6.1%
Oil index (OIX) ........  -3.9%
Natural Gas index (XNG).  -4.1%
USO oil ETF ............  -4.4%
-----------------------------

Once again Dow-component Citigroup (C) was weighing on the market. The stock is crashing lower and shares were off more than 19% to $4.75. A lot of mutual funds have rules about not owning stocks priced under $5.00 a share so the selling could accelerate. Citigroup appears to be on a crash course for its 2008 low near $3.00. Meanwhile as a side note readers may want to check out Bank of America (BAC), which is down 3.5% at $10.28 and almost testing its November 2008 lows near $10.00.

Another financial stock making headlines is Europe's largest bank HSBC Holdings (HBC). One analyst firm came out this morning with negative comments suggesting that HBC will need up to $30 billion in outside equity and will probably need to half its dividend. The stock reacted poorly to such opinion and shares gapped open lower at $41.54 and are currently trading at $42.28 (-7.7%). OptionInvestor.com listed HBC as a bearish put play last night.

The RLX retail index is down 3.3% and breaking down under its 50-dma and its late December lows. Dragging down the sector and most of the market was the latest December retail sales numbers. The Commerce Department said the growth rate from November to December was -2.7%, the worst monthly drop on record. If you exclude autos the drop was -3.1%. The nation's retail sales are down six months in a row, which is the longest decline on record. It appears that last month's holiday shopping season was as bad as pundits predicted.

A quick look at the OptionInvestor.com play list and I see that AZO is down 2.2% and quickly approaching our target at $125.25. BXP, a REIT stock, is down 7.7% at $46.00 and has surpassed our first target at $47.75. Be sure to take some money off the table there. Toyota (TM) is down 2.9% at $61.76. Readers may want to start taking profits here since our target on TM is $61.50.

Here's a quick look at the DJIA and S&P 500.

DJIA chart:

S&P 500 chart:



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