Day Traders Diary


U.S. stocks opened lower on Wednesday, extending losses into a third day, as Italy's borrowing costs rose to a record after Italy's auction of five-year debt and the euro broke 11-month lows against the dollar. The Dow Jones Industrial Average fell 38 points to 11,916. The S&P 500 Index declined 3 points to 1,222. The Nasdaq Composite shed 14 points to 2,565. A disturbing trend of late is more negative preannouncements for the fourth quarter. The fourth quarter is typically the best quarter of the year. This morning, mining giant Joy Global is down 9% after lowering guidance. First Solar is down 20% after lowering guidance. After the open Caterpillar dropped 3% as they also lowered guidance. Intel, Best Buy, and DuPont also lowered guidance this week. DuPont was downgraded this morning. The industrial and material sectors are taking it on the chin. The energy sector is also lower. In the commodity space, gold is down 3% while oil is down 4%. Agrium upped their dividend dramatically, but the stock is still lower. The tech sector is also succumbing to profit-taking. Google bumped up against resistance a couple days ago only to sell back off. The tech giant Apple is also lower. A few techs are higher like Broadcom. That stock is up 4% on positive guidance. Luckily for them, they have Apple as a big customer. Through the first hour the averages pushed lower with the Dow dropping over 100 points while the Nasdaq declined 40 points. The financials opened lower, but have lifted off the lows. At some point the banks will have no where to go, but up. The place to be remains the defensive sectors like healthcare, utilities, and consumer staples. Through the morning the averages remained weak. During the lunch hour the averages bounced off the lows thanks to an improvement within the financials. The insurance stocks also look good thanks in part to Progressive up 4% following better than expected earnings. Through the afternoon the averages sold off once again. The Dow dropped over 100 points partly due to Chevron's 4% decline on liability concerns for a Brazilian oil spill. The Dow fell as much as 160 points only to recover into the close. Another wild day. The Dow Jones Industrial Average finished down 131 points, or 1.1%, at 11,823, led by a 4.4% decline in Caterpillar. The S&P 500 lost 13 points, or 1.1%, to 1,211. Energy stocks led a decline in all 10 S&P 500 industry sectors as oil futures dropped below $95 a barrel, down 5.2%. The Nasdaq Composite fell 39 points, or 1.6%, to 2,539.

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