Stocks Slide On Possible Spain Downgrade
Wednesday, December 15, 2010
Stock Market Commentary:
The major US averages continued trading in a relatively tight range as a flurry of headlines crossed the wires. Market internals remain healthy, evidenced by an advancing advance/decline line and an expanding number of stocks reaching new 52-week highs.
Spain Might Be Downgraded & US Economic Data:
Moody’s, the popular rating agency, said it might cut Spain’s credit rating from Aa1 which sent the euro and a slew of European markets lower. The rating agency said they were concerned that Spain’s final bond sale of the year (Thursday) may be soft which could make them next in line to receive a bailout. Spain has to raise 170 billion euros ($226 billion) next year, while refinancing its onerous debt levels, accordingly to data complied at Moody’s.
In the US, NY mfg rebounded and topped forecasts in December which was the latest in a series of stronger than expected economic data. The Federal Reserve Bank of New York’s general economic index rose to +10.6. Elsewhere, a separate Fed report showed U.S. industrial production grew +0.4% which was higher than the +0.3% average estimate.
Market Action- Market In Confirmed Rally Week 16
It is encouraging to see the bulls show up and defend the 50 DMA lines for the major averages. The market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. Put simply, stocks are strong. Trade accordingly. If you are looking for specific high ranked ideas, please contact us for more information.
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