Stocks Negatively Reverse After Beige Book Shows "Modest" Economic Growth

Wednesday, June 9, 2010
Market Commentary:

The major averages negatively reversed (opened higher and closed lower) after the Fed’s Beige Book showed the economy is growing “modestly.” Volume, an important indicator of institutional sponsorship, was lighter than Tuesday’s levels. Advancers led decliners by about a 10-to-9 ratio on the NYSE but trailed by about a 6-to-7 ratio on the Nasdaq exchange. There were only 5 high-ranked companies from the Leaders List that made a new 52-week high and appeared on the BreakOuts Page, higher than the 3 issues that appeared on the prior session.  New 52-week highs outnumbered new 52-week lows on the NYSE but trailed by a large margin on the Nasdaq exchange.

Fed Beige Book Shows “Modest” Economic Growth:

Investors dumped stocks after the Federal Reserve released its Beige Book. The Fed survey said economic growth was “modest” which worried investors. The Beige Book which is published two weeks before a Fed meeting said, “Economic activity continued to improve since the last report across all 12 Federal Reserve Districts, although many Districts described the pace of growth as ‘modest.’” Elsewhere, a slew of energy and financial stocks tanked which dragged the major averages lower in the final few hours before the close.

Price & Volume Action Of Leading Stocks & The Major Averages:

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Investors Digest Economic Data; Stocks End Mixed

Market Commentary: Wednesday 12.02.09

The major averages ended mixed but in the lower half of their intra day range as investors digested the latest round of economic data. Volume, an important indicator of institutional sponsorship, was lighter than Tuesday’s levels on both major exchanges which helped offset the weak close. Advancers led decliners by almost a 2-to-1 ratio on the NYSE and by a 17-to-11 ratio on the Nasdaq exchange. There were 46 high-ranked companies from the Leaders List making a new 52-week high and appearing on the BreakOuts Page, one more than the total of 45 issues that appeared on the prior session. Leadership among high-ranked growth stocks had dried up in recent weeks, so the expansion in new highs was a welcome improvement.  New 52-week highs solidly outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.

Economic Data Mixed:

Before Wednesday’s opening bell futures fell after ADP Employer Services, the country’s largest private payrolls company,  said US employers slashed -169,000 jobs last month which topped the 150,000 expected by Wall Street. Investors use the ADP private report as a proxy for the government’s official jobs report which is slated to be released on Friday. Analysts expect that US employers slashed -100,000 jobs last month while the unemployment rate held steady at 10.2%.

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