The day ends with a small bang as the Dow Jones Industrial Average (DJIA) gains 172 points. Similar to what we saw at the open, the mid-afternoon dip was met with steady buying demand that hit just after Fed's Beige Book crossed the wires.
Earlier we saw that most groups were mulling around breakeven but that evolved into an upside bias at the close. The SPDR Homebuilders (XHB), S&P Retail Index (RLX) and PowerShares Clean Energy ETF (PBW) remained the leaders and were joined by the Regional Bank HOLDRS (RKH) and Broker/Dealer Index (XBD). The Amex Gold Bugs Index (HUI) remained as the weakest area.
In my midday check of the market, I said I thought the action up until then had been encouraging as buyers stepped in and bought the opening weakness. I left that post saying it would be important to see whether the late-morning rally held. Based on what I have already said, we know that not only did the rally hold but we hit new intraday highs.
If we add today's Dow gain to yesterday's rally of 270 points we find we have recouped roughly 440 of the 680 points lost on Monday. That still leaves us with a loss for the week but I think the important point is that buyers at least stepped in after the selling. The key issue to still be resolved is how the S&P 500 (SPX), Nasdaq Composite (COMP), and Russell 2000 (RUT) handle the resistance they are currently facing. As it stands now, the rejection is fairly mild.
And that is where I will pick up in the morning. Have a nice evening...
Chart Courtesy of Thomson Financial
| Index |
Index Value |
Point Change |
Percent Change |
| S&P 500 (SPX) |
870.7 |
21.9 points |
2.58 percent |
| Dow Jones Industrial Average (DJIA) |
8591.7 |
172.6 points |
2.05 percent |
| Nasdaq Composite (COMP) |
1492.4 |
42.6 points |
2.94 percent |
| Russell 2000 (RUT) |
453.8 |
11.9 points |
2.70 percent |
| CBOE Market Volatility Index (VIX) |
60.72 |
-2.26 points |
-3.6 percent |
Charts Courtesy of Thomson Financial
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