Wednesday, June 22, 2010
Stock Market Commentary:
It was another volatile day on Wall Street as investors digested dismal housing data and the Fed left rates unchanged as the economy continues to recover from the worst financial crisis since the Great Depression. Volume totals were about even on the NYSE and slightly higher on the Nasdaq exchange compared to Tuesday’s levels. Decliners led advancers by approximately nearly an 11-to-9 ratio on the NYSE and by a 7-to-6 ratio on the Nasdaq exchange. There was only 1 high-ranked company from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, sharply lower than the 12 issues that appeared on the prior session. Without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally. New 52-week highs outnumbered new 52-week lows on the NYSE but trailed on the Nasdaq exchange.
Dismal Housing Data Spooks Investors; Fed Holds Rates Steady:
The major averages spent the first half of the session in the red after new-home sales plunged to a record low. The Commerce Department said purchases of new homes plunged nearly -33% to an annual pace of 300,000 last month as the government’s tax credit expired. The report also showed that the median home price slid to just over $200,000 and prior months readings were downwardly revised. The overtly weak reading left many to question the healh of the already fragile economic recovery. In addition, anyone watching housing stocks in recent weeks should now expect dismal news (possibly a double dip on the ailing housing market) to continue in the near future. Around 2:15pm EST, the Federal Open Market Committee held rates unchanged at a record-low range of 0-to-0.25%. Fed officials reiterated their pledge to hold rates at a record low for an “extended period” and signaled that European contagion woes may adversely affect US economic growth.