6.22.07
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6.22.07 The Market drifted the first two days this week and then on Wednesday afternoon bids all but dried up and the bears took over. It appears that the Bear Stearns problem with sub-prime loans may become a big hurdle to overcome. It then became a “sell first, ask questions later” type of day in the financial and broker sectors. If Bear Stearns has to close down two of their Mortgage hedge funds due to losses suffered in the wake of sub-prime fallout. This then spilled over into all sectors of the market and finished the day at it’s lowest levels of the session. A day after the Dow, S&P 500 and Nasdaq plunged 1.2% on average, it wasn't surprising to see some of Wednesday's washout carry over into the opening bell. It was also understandable, though, to see investors view such a sizable market dip as overdone and merely providing another new entry point. Among the nine sectors finishing the day with gains, Energy (+2.0%) turned in the best performance even as oil prices closed lower again. Crude for August delivery, which was up as much as 1.5% and within 12 cents of $70/bl, fell 0.4% to $68.61/bbl. The commodity's early afternoon reversal without oil stocks sacrificing anything in the way of leadership provided some reassurance about the sector's earnings outlook as Q2 comes to a close next week. Stocks were unable to hold onto their gains, as they fell again Friday. Higher oil prices combined with ongoing nervousness about interest rates and hedge-fund trouble related to sub-prime mortgages to send the market lower. Till next week The MTA Staff
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