Day Traders Diary


U.S. stocks opened with a thud on Monday as investors, while demand for safe-havens like the U.S. dollar and Treasuries jumped, on fears Greece was again on the cusp of default and as Spanish bond yields soared. The Dow Jones Industrial Average dropped 220 points, or 1.8%, to 12,598. The S&P 500 fell 1.6% to 1,341. The Nasdaq Composite lost 64 points or 2.2% to 2,860. News reports said the International Monetary Fund is prepared to cut off further aid for Greece, while Spain's Murcia region reportedly said it could ask for government bailout funds. In other words no matter how well the earnings come in, investors remained focused on the European mess. The news on the earnings front here is limited. Coca Cola Enterprises is modestly higher following earnings and that's about it. With the Dow, McDonalds is down 3% after missing estimates. All the Dow components are in the red. Booz Allen is down 2% after lowering guidance. On the analyst front, homebuilder KB Homes is higher by 2% on an upgrade. The homebuilder sector continues to hold up in this environment. Two commodity plays, US Steel and Valero were upgraded, but both are down over 2%. Commodities are getting hit as the price of oil is down 3%. Every sector is trading lower this morning. The tech sector is under pressure. Even Apple is lower by 2%. Google and IBM are lower by 1.5% following a nice run up last week following earnings. The energy, materials, and industrials are all getting hit. The financials are under pressure. JP Morgan is holding up the best as CEO Jamie Dimon bought 500,000 shares or roughly $17 million worth of stock on Friday. Through the first hour the averages remained weak near the lows of the day. The diamond today remains Peet's Coffee up 29% after agreeing to be bought out. After the first hour the averages bounced off the lows. The financials are firming up as JP Morgan moved into the green. In fact four Dow components are now in the green including JP Morgan, Home Depot, Caterpillar, and GE. Industrial Eaton is bouncing 5% even though earnings were disappointing and the company lowered guidance. Through the morning and into the afternoon the averages kept slowly improving. The Dow recovered half its' loses as more components moved into the green. Within the Nasdaq, Google recovered went from down 12 points on the open to up 4 dollars. Impressive rebound. Apple was the next component to move into the green. In the last hour the averages kept slowly improving only to pull back into the close. The Dow Jones Industrial Average lost 101 points to 12,721, led by a 2.9% retreat in McDonald's. The S&P 500 lost 12 points to 1,350. All 10 sectors were lower, dragged by natural-resource stocks. The Nasdaq Composite fell 35 points, or 1.2%, to 2,890. Heavyweight Microsoft fell 2.8%.

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