The market opened lower and got weaker as the day went. After 2 days of gains, the market was ready to take a breather. AIG’s horrific quarterly results gave the market more of a reason to take some money off the table. AIG shares fell more than 18% today. C’s multi-billion dollar settlement with federal and state regulators over auction-rate securities exerted further pressure on the market. C shares dropped 6.24%. BAC also received subpoenas relating to sale of auction-rate securities. BAC shares fell 5.77%.
On the other hand, the semiconductors were strong to help the techs. Nasdaq actually turned higher mid-day and went as high as 2386.44. SNDK jumped +6.1%. AMAT added almost +3%. INTC gained +3.82%. But, the pressure from the financials was too big to overcome today.
The Dow was down 224.64 points; SPX lost tumbled 23.12 points; Nasdaq slid 22.64 points:
VIX closed just above 21. USO (oil) went +1% higher. SOX (semiconductors) garnered +1.54%. Most other sectors closed in the red. XLF (financials) lost almost 5%. Commodity-related sectors were mostly weak, with UNG (natural gas) down 2.56%. FXI (Chinese ADRs) tumbled 5.66%.
SPX
SPX fell 23.12 points to close at 1266.07. It closed below the 1280 level and just above its 10-day MA. Its MACD was a bit higher.
Nasdaq
Nasdaq slid 22.64 points to close at 2355.73. It closed above the 2350 level. Its MACD went up.
Like I was saying yesterday, the market looked ready to take a breather. The bad news from the financials prompted investors lock in some profits. I am surprised, however, by the big drop in the Chinese ADRs with no particular news, and on the eve of the Olympics 2008 opening ceremony. VIX bounced up a little today, but, its daily chart is already showing a new bearish formation. It closed just above 21. We’ll see how VIX deals with this level tomorrow. If it falls back below 21, the market should be able to recover some of the losses today.
Good night and HappyTrading! ™
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