Day Traders Diary


After hitting a near four-week high in the prior session, the averages are succumbing to profit-taking. The Dow Jones Industrial Average shed 69 points to 7,326. The S&P 500 fell 7 points to 770 while the Nasdaq Composite dropped 7 points to 1,454. The selling today is broad based. Even the defensive names like General Mills aren't immune to the economic weakness. General Mills is down 10% to new lows after missing estimates by 9 cents. Most of the financials are lower except for a select few. Bank of America is higher on comments from the CEO indicating they hope to pay back the TARP money by the end of the year or early next year. A bold statement. Hopefully it pans out. Citigroup is also higher by 10%. Morgan Stanley is down 6% on a downgrade and Fulton Financial is lower by 7% after slashing their dividend. The insurance stocks are modestly higher. Metlife is up 6% following a presentation indicating that their capital cushion is sound. In the tech sector, rumors are circling that IBM will buy SunMicrosystem. Sun is jumping 65% while IBM is down 2.5%. EMC is up 2% on an upgrade. Adobe is up 7% on solid earnings. In the retail sector, Guess jeans is up 7% on in line earnings. Darden Restaurants is jumping 15% on blow out earnings. I guess people are still eating out. After the first hour, the Dow pushed lower by 125 points. The Nasdaq declined by 11 points. Through the morning the averages remained weak, but off the lows. A number of techs are improving while Citigroup and Bank of America are acting great. Bank of America is up 8% while Citigroup is up 25%. Not bad. In the afternoon, the Dow remained in the red even as the financials continued to improve. The Nasdaq is in the green by 7 points. As the afternoon progressed, the Fed left rates unchanged, but surprised Wallstreet by increasing their purchases of mortgage back securities and long term Treasury bonds in the hundreds of billions of dollars. Bond yields plunged on this news, sending the equity markets shooting into the green. Entering the last hour, the Dow rose 150 points. The Nasdaq rallied 40 points. The financials look great. In the last hour, the averages gave up most of their gains only to rebound into the close. The Dow Jones Industrial Average finished up 90 points, or 1.2%, at 7,486. The S&P 500 Index added 16 points, or 2.1%, to 794, after briefly topping 800 for the first time since Feb. 17. The Nasdaq Composite gained 29 points, or 2%, to finish at 1,491.

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