The U.S. stock market was trying to bounce back from twelve-year lows this morning but negative comments from Fed Chairman Ben Bernanke sucked the wind out of the market's sails. The Dow Jones Industrial Average was up over 70 points and the S&P 500 had rallied about 10 points before reversing. Bernanke's remark that the financial system has failed to stabilize refreshed fears that banks remain at risk.
While financial sector indices are down about 3% the market is seeing a few bright spots. A couple of the tech sectors are in positive territory and the OSX oil services index is up almost 2%. The biggest gainers today are the mining stocks. The XAU gold & silver index is up 3%. This is mostly due to a rally in miners and not the commodity gold. More specifically this is a rally for copper and the copper miners. China's Minister of Industry and Information said that the Chinese economy, which happens to be the world's biggest consumer of copper, would recover this year from its worst export decline in a decade. The FXI Chinese ETF is up 1.6% at $23.17 while Freeport McMoran (FCX), the world's largest copper miner, was up 6.7% to $28.28.
I am surprised that tech stocks are showing any strength today. Last week the research firm Gartner Inc. said that semiconductor sales would take two or three years to get back to 2008 levels. Today Gartner Inc. put out their forecast that personal computer sales would collapse this year with a 12% decline. Gartner Inc. is calling this an "unprecedented" market slow down for the PC industry. Shares of DELL ignored the news and the stock is up 6.5% to almost $9.00 a share. Shares of Hewlett-Packard (HPQ) are up 0.4% at $28.20.
In other news the automakers were making headlines. Ford Motor Co. (F) said its February sales fell 48% from a year ago. General Motors (GM), once the largest carmaker in the world, said its February sales dropped 53%. Honda announced that their U.S. sales fell 38%.
Gold futures continue to see profit taking. The GLD gold ETF is posting its seventh decline in a row. The precious metal hasn't seen a losing streak that long since last October. I think readers may want to keep an eye on gold. It's nearing potential support at the bottom of its four-month bullish channel. The GLD is trying to bounce from its 40-dma but I'm watching the 50-dma as a possible entry point.
Chart of GLD gold ETF:
Speaking of Entry points is sounds like President Obama thinks the recent lows in stocks might make a good entry point. Obama was quoted today saying, "buying stocks is a potentially good deal if you’ve got a long term perspective."
Chart of the NASDAQ:
Chart of the S&P 500: