-- Wednesday, 10/28 --
HOLDING PATTERN
As the Brazilian government eases jitters about a possible currency devaluation, the Dow stays parked and closes flat.
Today's big story concerned the financial crisis of Brazil. Brazilian Finance Minister Pedro Malan presented a fiscal plan that puts the Latin American country on the road to recovery, conspicuously avoiding any mention of currency devaluation -- the two most dreaded words in today's international economic climate.
Meanwhile, a lackluster day in the US markets had very little push and even less pull, as the Dow, S&P 500, Nasdaq Composite, and Russell 2000 indices remained settled into a lengthening nine-day rut. The Dow had gained 54 points at 3 pm, but a last-hour selloff neutralized those gains. The Nasdaq diverged to the upside, gaining the equivalent of about 95 Dow points. It's worth noting that market breadth, the relationship of gainers to losers in the major exchanges, was negative.
** FLASH: Amazon.com (AMZN) released its quarterly earnings after the market close, reporting a loss of 49 cents, beating street estimates of minus 57 cents. (After expense accounting adjustments.) The report claimed that Amazon has 4.5 million active customer accounts, and has grown sales by 377 percent.
TIDBITS: eBay (EBAY) investors didn't like yesterday's mixed earnings report, or perhaps today's 5-point drop is simple profit taking following the astounding, near-70 percent runup of the stock this week. Ameritrade (AMTD) missed earnings estimates by 3 cents per share today, and lost 3 3/8 points in trading.
SECTOR WATCH: Technology and retail were the two biggest winners today. Banks recovered nicely from yesterday's shivery plunge in the wake of the Brazil devaluation rumor. Biotechnology stocks are in the midst of a vigorous runup. Small-cap stocks diverged downward from the major indices for the second straight days, as the Russell 2000 boom grinds to a halt, perhaps temporarily.
TECHNICAL ANALYSIS: In a striking display of conformity, most of the major indices are locked in a struggle with their resistance levels. The Dow at 8,500, the Nasdaq at 1750, the Russell 2000 at 370, the S&P 500 at 1,050. (The numbers are approximate; the higher the absolute value of an index, the more play exists surrounding support and resistance levels.) Despite the transient divergences of one index from another as reported in recent Closing Bells, the market as a whole is stuck against a massive resistance level.
LOOKING AHEAD:
Thursday: Almost 300 companies release quarterly reports. Watch for Hercules (HPC), Connectiv (CIV), Concentric Network (CNCX), Acceptance Insurance (AIF).
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