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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Day Traders Diary

7/10/12

U.S. stocks opened sharply higher on Tuesday, rebounding after a three-session losing streak, after European officials moved to bolster Spanish banks and upbeat factory data from Britain and Italy. The Dow Jones Industrial Average rose 89 points to 12,825. The S&P 500 Index added 8 points to 1,361. The Nasdaq Composite rose 20 points to 2,951. Plenty of preannouncements and crummy earnings, yet the major averages are higher. Pretty impressive. First the bad news. Last night chipmaker AMD lowered guidance. AMD is down 5% dragging a number of chip stocks with it. This morning chip equipment maker, Applied Materials lowered guidance. That stock is down 3%. Rival KLA Tencor is lower even though the company hiked their dividend. Rival, ASML is bucking the trend up 7% after Intel agreed to make an investment in the company. Intel opened lower, but then moved into the green. The biggest loser this morning is Mako Surgical down 39% after reducing guidance last night. The healthcare space is mixed this morning. On the earnings front Alcoa started it off with inline results. The stock is modestly lower along with the rest of the energy space. Patriot Coal dropped 50% last night and is halted this morning after confirming rumors they will file for bankruptcy. Only Exxon Mobil is modestly higher. The materials and the industrial space are mixed on a number of downgrades. Tyco, Eaton, Ingersoll Rand, and Louisiana Pacific are modestly lower on downgrades. Shaw Group is down a percent after reporting a loss, but they did initiate a share buyback. Helen of Troy is down 9% after missing estimates by a mile. In the retail space, WD-40 is lower by 6% after missing estimates. Cedar Fair is unchanged after reporting their revenue metrics. JCPenney is down 5% on a downgrade. The new management team doesn't seem to be helping the company much. Two casino operators, Wynn Resorts and Las Vegas Sands are higher on upgrades. Through the first hour the rally fizzled as the US dollar reversed course, moving higher. The Nasdaq fell into the red while the Dow held on to modest gains. The utilities and consumer staples look good. Philip Morris, Altria, and Walmart are trading at new all-time highs. Through the morning the averages sold off only to battle back to the unchanged level into the lunch hour. The markets seems to be waiting for earnings season. In the afternoon the averages were moving sideways until news broke that industrial, Cummins dropped 2% after lowering guidance for the quarter. Through the next hour the averages pushed lower as more industrials sold off. Caterpillar dropped 4%, Deere dropped 3%, and Cummins kept pushing lower falling 9%. The sell-off dropped the Dow by 100 points while the Nasdaq declined 30 points. Even Apple sold off. In the last hour the averages pushed a little bit lower only to modestly rebound into the close. The Dow Jones Industrial Average finished down 83 points to 12,653, led by a 4.1% drop in Alcoa. The S&P 500 fell 10 points to 1,341. Industrials and materials were the worst performing. For both the Dow and S&P 500, it was the fourth session of declines. The Nasdaq Composite lost 29 points, or 1%, to 2,902, its third down day in a row. All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.