Tuesday, June 29, 2010
Stock Marke Commentary:
The major averages got smacked sending the S&P 500 index below its 2010 lows of 1,040. The widespread losses coupled with the ominous technical damage effectively ended the latest rally which began with the June 15, 2010 follow-through day (FTD). Tuesday’s volume totals were reported higher on the NYSE and the Nasdaq exchange compared to Monday’s levels which marked the latest distribution day for the major averages. Decliners trumped advancers by over a 7-to-1 ratio on the NYSE and over an 8-to-1 ratio on the Nasdaq exchange. There were only 2 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower than the 15 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 lows outnumbered new 52-week highs on the NYSE and the Nasdaq exchange.
China Slowdown & Poor US consumer Sentiment Drags Stocks Lower:
Stocks fell hard across the globe after concern spread that China’s robust economy is slowing. China’s leading economic indicators fell and Citigroup (C) said China’s exports will face “strong headwinds” in the second half of the year due to stricter measures from Beijing and the ongoing European debt crisis. This sent the Shanghai Composite Index diving -4.3% to 2,427.05 which was the largest single day decline since May 17 and the lowest close in 14 months.
US stocks continued to fall after US consumer confidence tanked in June. The Conference Board’s index of consumer confidence fell to 52.9 from May’s revised reading of 62.7. The dismal labor market was cited as a primary cause for the ongoing malaise. Elsewhere, the S&P/Case-Shiller index of home prices rose +3.8% from April 2009 which was the largest year-over-year gain since September 2006. The report also showed that home prices in 20 major US cities rose in April from a year earlier as sales got a boost from the now-expired tax credit.