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Daily Blog -01/21/09- 2:10 P.M.


Trying To Bounce

Wednesday feels like a quiet day for the stock market. Stocks are trying to bounce after yesterday's painful sell-off. The media is focused on the congressional hearings for Treasury Secretary nominee Tim Geithner. Individual stocks are reacting to earnings news.

Technology giant IBM is a bright spot today. The stock is up over 9% as investors react to last night's earnings report. The company announced earnings that were 25 cents better than expected. More importantly IBM raised their guidance for 2009. Shares of IBM are trying to breakout over resistance at $90.00 but they've been unsuccessful thus far today.

Homebuilders in America remain defensive and pessimistic about business conditions. The monthly survey from the National Association of Home Builders came out today and hit a new record low. The DJUSHB home construction index is a sore spot in the market with a 4.4% decline.

General Motors reported that its global sales for 2008 came in at 8.35 million vehicles. This was an 11% drop in sales volume that puts rival Toyota Motors (TM) in the number one spot as global sales leader. TM has been gaining ground in GM for years and given GM's troubles it was not a surprise to see TM over take them. In December 2008 GM received $13.4 billion in emergency "loans" from the U.S. government. What is amazing is that GM's President and CEO Fritz Henderson came out today and said that the company could run out of money before March 31st if they don't get another loan from the government. GM was down 7.1% at $3.24.

Some sectors of the market are definitely seeing a bounce. Many of the technology sectors are up 2.7%-to-3% or more. The SOX semiconductor index is the exception with a 0.3% loss. The financials are seeing a big bounce with the BKX banking index up 5% and the XBD broker-dealer index up almost 5%.

Oil and oil services are rebounding sharply with the OIX up 3.3% and the OSX oil services up 7.1%. The USO oil ETF is up 4.8%.

The Dow Jones Industrial Average is up 122 points and back above the 8,000 level at 8071. The S&P 500 index is up 1.8% (+14 points) to 819. The 820 level was previous support so it should now be short-term overhead resistance. The NASDAQ composite is up 1.7% to 1465.

Chart of the DJIA:

Chart of the S&P 500:



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