Technology leading market's rally, a pause ahead?

The 52 week high list looks like a who's who of dynamic companies, with the list being dominated by some of the best and brightest in Technology. The Nasdaq has outperformed its peers on a year to date basis and as several analysts predicted, it is the tech sector that is leading the rally.

The Nasdaq's Year to Date performance gains of 34% dwarfs the gains put up by the S&P (18%) and the Dow Jones (11%). Even looking at the gains since the lows of March, the Nasdaq and technology is still the driving story for the market. Nasdaq at 68% leads the gains of the S&P at 60% and the Dow Jones at 51%. Either way, the bull market rally since March, on the back of the idea of recovery, and finally improving GDP numbers has been broad and long. The Bulls have been on a 6 month celebratory train, but will it last and is Tech's run over?

Not quite, the road to recovery, while already swift due to massive government intervention, still has to play its course and incite a recovery in the job market. Unemployment in America is still rising, though not as quickly, towards the psychological 10% mark. If job creation instead of job losses show up in the remaining quarter of the year, market bulls will have more reason to bang their chests, and more importantly, put their wallet where their mouth is.

Secondly, the housing sector still needs to improve. Articles on the Huffington Post and other sources, are already touting that banks are going back to packaging risky loans, and many analysts are waiting for the other shoe to drop when it comes to commercial real estate. While some may scoff at the success rate of the White House loan modification program, the last estimates put the percentage of home owners helped with refinancing at 13-15%, the fact is there are some getting help. Housing starts were lower than expected most recently but this has been a metric that has consistently come in higher than expectations.

Now, about those 52 week high names. Well technology giants Apple (AAPL) and Google (GOOG) dominate the list, while other techs such as Ebay (EBAY) show up, and even others such as IBM (IBM) and INTC (INTC) are just off those levels.

The prudent thing for the market to do and investors to do would be to take a breather after such a scorching rally of late, however, as market participants are keen to know, markets stay irrational for longer than expected.

Disclosure: Author owns AAPL, GOOG

The Non-Week that was. Markets remain flat

Although financially, politically and economically a lot happens each and every week in this game, sometimes you wouldn't know it by looking through the stock pages. Both the Bulls and Bears are pushing for some direction but neither is making any headway.

The tally on the S&P for the week, barring a late Friday afternoon directional miracle: +0.6%!. The same for the Dow Jones, while the Nasdaq lags at a weekly loss of 0.3%.

As Options expiration nears at the end of next week, Traders will likely have more ammunition to find a direction. So as one of the more brilliant pieces of advertising these days dictates:
Stay thirsty, my friends.

Market Rally continues on Day 3 on Banking and Retail sectors

10 to 11% gains for the S&P, Nasdaq and Dow since the start of trading Tuesday as markets focused on positive news coming out of the banking and retail sectors. With the S&P up about 80 points (12%) since the 660s bottom, Traders must be wondering is it sustainable?

According to many in the banking community it just might be! Why? It's simple, profitability. After quarterly losses multiplying not contracting, increased write-downs and more government backed dollars, some of the biggest American banks by name have issued relatively strong operational statements. Citigroup (C) and Bank Of America (BAC), both of whom have seen share prices disintegrate before their very eyes over 15 months appear to have turned the tide of losses. Both companies have pre-announced profitability in the first two months of 2009 and both expect continued operations in the black.

What does that even mean? Well shares of both banks have rallied 70% and 90%, respectively, from most recent lows, and for taxpayers who now own a 36% stake in Citigroup, maybe there's a way out of that mess. But just a few days ago there was talk of Citigroup being replaced in the Dow Jones Index and its value as a "penny stock" weakening an already battered corporate reputation. Confidence in the banking sector, even the sliver that there is now, is crucial to returning people to the markets and jump-starting a cycle of economic expansion and price increases.

Can two months of operations at these banks be a real guiding light for the rest of year? It is of course premature to label the banks as stabilized and past their major losses, and in fact the market is full of Investors waiting for another shoe to drop, so market participants still need to exercise caution, for which quarterly results should provide additional clarity.

On the retail side, a sector that was labeled disastrous just weeks ago, has found itself well into newly renewed confidence after posting some surprising February numbers. Retail sales dropped 0.1% (up 0.7% excluding cars) over the month, which was better than the 0.4% expected by economists, assuring to some that some stabilization in this sector is occurring. This was on top of a revised January which saw an increase of 1.8% instead of the 1.0% estimate and following 5 months of Auto sales declines, January saw a slight uptick in that segment. Maybe its not as bad out there as every headline makes it out to be?

Who would think this market would be ripe for mergers and acquisitions? Roche (RHHBY) does, as it, after months of wheeling and dealing, finally found a friendly takeover number with Genentech (DNA) at $95 per share.

Markets, the economy and overall sentiment is still decidedly bearish which puts great scrutiny on any extended rally so expect some profit taking soon. At the very least, the S&P's ability to roar back past 700 is a psychological stabilizer for many traders, and given that there was talk very recently of the S&P earning multiples falling to the 5-8 range, in line with previous grave recessions, potentially pushing the index lower than 500, the 700 number is good to see. While there are no psychologists here, that is definitely reassuring.

Disclosure: Author owns C

Reaction to New Financial Bailout Plan and Stimulus Bill Passing bearish

Markets traded in negative waters in early morning trade, but it wasn't until details of Tim Geithner's plan for the remains of the Financial Bailout the things scampered quickly into the bear caves.  The Dow Jones finished lower by nearly 400 points (4.6%) and the S&P and Nasdaq followed with declines of 4.9% and 4.2%, respectively.

The Financial Bailout Plan, the new one of course, since the first $300Billion seems to have been vastly misplaced and mostly wasted, is one riddled with rules and regulations sure to make most on Wall Street unhappy with the prying eyes of Washington.  But maybe that's the point, because just maybe that's what is needed to restore both public and the private sector confidence.

Bank Bailout details have been written about in several news outlets today, including CNN (Link) but the overwhelming theme is better and deeper scrutiny.  In an economy where the public has little to no confidence in the health of their banking system it may be a necessary evil. Banks will undergo tests to determine how capitalized they are before, during and after they receive funds, and the Treasury will take positions in preferred shares of companies receiving these funds.

Certain conditions will have to be met by institutions receiving money, such as the provisions included to make sure Banks work with homeowners on the verge of foreclosure in an effort to keep people in homes by redrafting payment terms and a partnership with the private sector to purchase and cleanse bad assets from the books of infected financial institutions.

Luxury items are a big public sentiment play for the President and his administration.  Clearly the public doesn't want to hear headlines about executives making multi-million bonuses while banks cry for hand-me-down money.  So executive compensation and corporate luxury spending will be scrutinized and have to go through an approval process.

The whole point here it go get banks comfortable to lend again to individuals, small businesses and large corporations, with secondary objectives of keeping people in their homes if possible and restoring public outcry over excessive compensation packages.

Oh and of course the plan will likely cost far more than initially anticipated, with numbers being thrown around of near $1Trillion in provisions, but as President Barack Obama iterated in his press conference yesterday, the cost of doing nothing is that much graver.  Oh and this on the heels of the Senate approving an $830Billion Stimulus bill that will attempt to stem the rate of job losses and put men and women across America back to work on Infrastructure, Energy, Health Care and Technology projects.

The President of the United States has indeed inherited quite an economic mess and only time will tell if opening up the ever-deepening Federal Wallet will be the inflection point the country, and the world for that matter, needs to spark itself out of Recession.

The Markets have had their say today, and so far the sentiment is pessimistic.

Markets Rally on Stimulus Package Hopes

200 to the good for the Dow in mid day trading has equities on a continued Bull run as regularly rough unemployment metrics are being used by traders to cash in, in the hopes the dire data will bring the US government around to passing, and passing quickly a massive stimulus package aimed at helping America get off the economic doormat.

The United States, according to latest figures lost 598000 jobs in January, raising unemployment to 7.6%, the highest level in 16 years. Normally, this news would spur further doomsday economic chatter but with the proposed $800Billion plus stimulus bill on the table in American parliament the talk turns to anticipation that lawmakers will act swiftly on resolution.

All the majors in America (Nasdaq, Dow Jones and the S&P) were up around 2% at the time of writing.

Markets find 3rd day in the green. Thrice a trend?

For Wall Street the last month has been a mixed bag somewhere between bearish disaster and depression era sell-off, so when some optimism floats in Traders are left to revel within themselves whether the terms "turnaround" or "dead-cat bounce" are most appropriate.

On the heels of some optimistic news, which the market has used to bid up stocks, the Dow finished in positive territory for the 3rd day. It began with President-elect Barack Obama naming members of his economic team, initially naming New York Federal Reserve head Timithy Geithner as Treasury Secretary. This followed a weekend of talks that led to the $300Billion-plus Government guarantee of Citigroup (C) assets, sending Citi shares up 60% yesterday, finally culiminating in a subdued, yet rebound worthy, day for the markets as a new Fed stimulus plan hit the news-wires.

The Technology-laden Nasdaq was the only major to finish in the red, down about half a percentage point capping its 2 day rally to 11%, while the Dow and S&P extended their gains to 12% and 14% respectively over the 3 day period. So are traders seeing thrice as a trend and these extended government backed plans as a sign of turnaround hope? That's the question of the hour, and if the "bleeds it leads" media is to be believed it could very well be. To be sure the major media outlets aren't producing nearly as many gloomy headlines as in the past, however the news story is still mixed to say the least.

The Associated Press (Link) reported American consumer spending fell to the worse levels in 28 years during October, which was even worse than expected and initially extimated (3.7% spending decline versus an expected of a 3.1% fall). GDP was also worse than economists expected (0.5% drop in GDP versus an expected 0.3% decline), however initial reports of consumer confidence metrics for November were on the rise after all-time lows in October.

This is a significantly better sign to everyday market participants, compared to the non-stop bearish headlines that flew across magazines and newspaper for most of October and early November. Now can this translate into a December Santaesque Rally? While opportunities are certainly there for gains on over-sold stocks, to say this is a Bullish trend yet remains to be seen.

But with Obama capturing headlines for plans, partners and policies on "recovery", the mindset of the everyday consumer/investor will begin to shift from profoundly bearish to slightly bullish, and that's where the opportunity will lie. Notice how there's no more American Auto Industry on the verge of failure headlines just like that?

Markets Rebound Monday on Government Plans for Financials

Rebound Day? Or the start of something market-wide? That was the question facing Traders Monday morning following a wild weekend where Finance heads of the G7 met and came together on ambitious plans to cure economic ills around the world.  European governments vowed to guarantee all inter-bank lending and the US Treasury announced its intentions of buying into healthy banks to shore up liquidity and get credit moving throughout the economy.

Coming off the worst week for the stock market in a lifetime, and a Friday which saw the Dow see-saw over 1000 points in a single day brought analysts out of the woodwork uttering "capitulation". The market term is the English equivalent to Gold for Bullish Traders as it signifies the end of the end.  In other words, capitulation days typically lead to a buying rally in the short term.

It seems to have all come together for buyers over the weekend with Europe's unified stance on the banking sector, including Germany, France and Spain coming together to pledge $1.3Trillion to guarantee loans between banks and to purchase stakes in Financial companies. This dramatic effort was seen as necessary to avoid the kind of Financial failure throughout Europe that was seen over the last months in the United States.  The unified commitment in Europe led to further plans coming from the US Treasury leaving Monday morning trading in an almost euphorically positive frame.

By no means is the situation going to correct itself in a day.  The credit situation is hitting businesses of all sizes, causing stagnation in the job market, stagnation in productivity and in-turn sales.  The steps by Governments around the world are the beginning, and as money precipitates through the system it will eventually come out of the system as new loans to businesses and individuals. Credit will loosen, productivity and job growth will turn back to the positive side of the spectrum. The big question is when the little guy sees the results?

Markets, always look forward and the positive signs are aplenty today, with the Dow up nearly 600 points, the Nasdaq up 120 points and the S&P up 60 points by the middle of the trading day.  It'll be important to see whether the Bearish tone of late doesn't overcome the early gains towards the end of the day.  If buying like this can be sustained on high volume Traders will see that as a big positive, signalling that last week's downturn was in fact the result of fear-mongering rather than trading to valuation.

With two and a half months left in the trading year, and plenty of Investors sitting still on the sidelines, is now the time to think about getting back into your favourite stocks on the cheap? Was Friday indeed that day of capitulation? Will the Government plans begin to take form and alleviate the credit problems suffering the nation in the short term? All valid questions that only the next few weeks will tell. However, seeing the signals today, it's clear more Traders are starting to lean towards 'Yes' across the board.

US House defeats Bailout Bill. Markets plunge.

The controversial $700Billion bailout plan being pushed into the House today was to be the tipping point for the US economy and financial markets. With optimism swirling on the weekend that agreements had been finally reached on the bill, the one thing left to do was the most important. Vote on it.

The vote they did, the elected House narrowly defeated the bill, sending markets into a selling frenzy by mid-day. As traders learned of the tallying votes against the bill, sellers rushed through the electronic order desks and buyers were heading for the exits. The Dow fell 700 points during the early afternoon while the Nasdaq led all decliners (off about 7% at the bottom of the session).

With politicians on both sides of the spectrum resonating the importance of the bailout package with regards to the fragile nature of the US economy, it is crucial lawmakers do something substantial soon. President George W. Bush urged for the passing of the bill, as did Federal Reserve Chairman Ben Bernanke, but their pleas fell on a deaf House. Democrats did not get the overwhelming show of support they needed and Republicans held firm with their ideas and showed virtually little support even when implored by their President and House leaders. The final tally stood at about 60% of Democratics voting to pass the bill, along with about 30% of Republicans. Pitting the vote at 228 against, 205 for. Ending a tumultuous debating session in Washington that will surely leave politicians scrambling to draft a more "commonly-acceptable" solution soon.

The key is of course, that chances to rescue the financial system in America are few, and with another bank on the bubble, having to sell its banking assets, the focus has shifted from Bailout optimism to, who is next on the chopping block.

JP Morgan Chase (JPM) salvaged Washington Mutual in what became the biggest banking failure in US history, and today Citigroup (C) bought the banking assets of Wachovia (WB). Citigroup has insurance from the FDIC against Wachovia losses if they exceed $42Billion. A truly remarkable number, that will stretch Citi's already thin resources in the coming quarters. The company had to issue another set of preferred shares to the FDIC, as well as slash its own dividend down to $0.16/share.

As the day drew up a close the Dow continued to drift lower falling over 600 points just after 3pm. The Nasdaq continued to be the biggest decliner of over 160 points and the S&P followed suit down 90 points.

Markets continue slide as Jobs data weighs

North American markets continued to sell off in the beginning of the end of a week that has seen Politics at the forefront of American minds and Employment at the forefront of Wall Street. Today's news, not surprising in the least, continued the slide. America's unemployment rate rose to 6.1% in August as payrolls were cut yet again by businesses.

That marks the 8th straight month of job losses and a 5 year high rate of unemployment in the United States. August's numbers, and those of the previous months paint a fading picture for American workers. Job losses in August are estimated at 84,000, compared to economist projections of 75,000. Adding fuel to the fire, estimates for June and July were revised up to 100,000 and 60,000 in losses.

While talk of a "deteriorating economy" is flying through economic and investing circles, the emphasis continues to be on the Federal Reserve to keep Interest Rates steady and low for longer than the organization would probably like.

Off, another 100 points before the lunch bell even sounds, the Dow has run up its losses in this shortened Labor Day weekend to about 700 points (about 6% in the red for the week). The other majors were hit even harder with the Nasdaq off almost 200 points (around 8%) and the S&P off 80 points (6%).

While the economy continues to fizzle into the holiday season, businesses will have to do more to lure customers, putting the squeeze on margins. So far the Bears have had their way, and with no clear signs of turnaround Bulls have to pick their spots carefully.

Markets start hot after Gustav potential negated, gains can't hold

Hurricane Gustav came and went through the US Gulf region without anywhere near the devastation of Katrina three years ago. On this news, commodities fell, led of course by oil, dropping around $7 in the early going, before oil settled at around $110 a barrel.

The Dow led the majors with a morning gain of over 200 points (1.7%), followed closely behind by Nasdaq and the S&P. Sector-wise the morning rally was broad, except of course for Energy and Materials. Energy as a sector was down almost 5% at the end of the day.

A fall in the Supply Management Manufacturing index to 49.9, which below 50 means contraction, added to the skittish nature of nervous trading on the day. From the morning highs, the downslope of the US majors (Dow, Nasdaq and S&P) mirrored one another leading to a day filled with red quote boards. The Dow finished down 26 points, the Nasdaq down 18 and the S&P down 5.

Oil continues slide, Markets up Monday

The Bulls on Wall Street pulled ahead once again as the slide in Oil Prices continue due to weakening demand. It is becoming clearer week after week that the Auto Makers, especially in the US, are in serious trouble; leased vehicles can not be resold, Trucks are sitting in lots, and drivers just aren't driving much.

The slowdown in Auto Sales, coupled with American's resistance to drive during times of high gasoline prices have lowered US oil demand to a point where Oil Trade speculators are feeling their bid up prices fall quickly and feverishly. Oil dropped into the $113s today pushing stocks up through the middle of the trading day. Not even the conflict between Russia and Georgia is stopping Oil's slide. The Russian invasion is likely not a threat to turn around Oil Prices in the short term as the pipeline, which funnels oil through Europe and Asia is too lucrative to become a target as this conflict grows militant and becomes a traditional war.

Hence, the 3 main US market trackers have trended higher since the open with the Dow standing at +96 points, the Nasdaq at +41 points, and the S&P at +15 points.

American Markets Rally on Oil Price Drop

Fears of a late storm season abated earlier this week and that, coupled with statements by the Federal Reserve, sent Oil Prices responding in kind; dropping to 3 month lows under $120/barrel. Markets jumped significantly on Oil's retreat, and the confirmation that Interest Rates will for the time being stay where they are.

For the Fed, inflationary risks are weighing heavily, and pricing pressure is "significant". The reaction for now is to wait and see, by holding rates, as the economy is expected to stay weak in the United States for several additional months.

The Dow Jones jumped 330 points (a gain of 3%), while the Nasdaq rose 64 points (a gain of 2.8%).

Banks continue decline, Job cuts at Citigroup, QMNM Day Trade

Markets Monday couldn't hold onto opening gains and slide lower before finishing roughly flat, as Energy was the only real green sector and continued pressure was put on the Financials. The Dow Jones and S&P ended flat while the Nasdaq was lower by almost 1%.

Energy's rise made up for further weakening Financials today as Banks and Brokerages were mainly to the red between 2 and 5%. Bank Of America (BAC) was hit with selling as it closes in on finalizing its purchase of troubled Mortgage lender Countrywide Financial (CFC). Continued worries at Citigroup (C) grew as reports surfaced of potential job cuts in the bank's Investment Banking division. As much as 10% of that workforce could be getting walking papers. With the stock already under pressure, Citi dropped another 4% to rest just 50 cents shy of its 52-week low.

On a brighter note, Investors buying in now are sitting on a 7% yield, provided no further dividend cuts are in store, and there's certainly no guarantees on that front.

A very interesting and lucrative day trade also was developing today with Quest Minerals & Mining (QMNM), a penny stock listed as an OTC issue. The company virtually doubled at the open to $0.03/share as the Kentucky based firm over the weekend announced its plan to get into production imminently with some of its energy and mineral properties, specifically its location at Pond Creek. The stock stayed around the $0.02/$0.03 levels as volume surged in the security, however towards the end of the session, a secondary flood of bidding pushed the issue to close at $0.07/share, making the day's gain over 400%!

Trading and Investing in penny stocks is certainly not the recommended path for those just starting out or learning the investing ropes, but it can be a lucrative proposition at times, and with the volatility inherent in the energy and materials sectors, it can not be overlooked that in this day in age, an increasing amount of small companies can truly make market-noticing breakthroughs specifically in these areas of business.

Disclosure: Author owns C

Markets close March with Small Rally

The Dow ended up 46 points during the Monday session putting its March totals at -3.5 points or a whopping -0.03%. A similar story for the Nasdaq as the 18 point positive day put its month returns at +7 points or +0.3%. Not exactly eye opening moves for a month long period that saw some heavy volatility, especially in the Financial and Energy sectors.

Making news in market action today were a couple Drug names as Vytorin, a cholesterol drug from Merck (MRK) and Schering-Plough (SGP), was mixed-up in a high-stakes sales and research scandal. News came out that an investigation into the drug research revealed the companies delayed and withheld information about the drug due to its potential impact on sales. It goes without saying that the research in question was overtly negative towards the drug.

Investors don't like scandals and the resulting publicity and sales hit was taken harshly as Merck was hit by 15% while Schering-Plough fell 24%. The resulting sell-off made some Pharma-Sector money move around with a main beneficiary today being Pfizer (PFE), with its own set of positive news, up 2%.

Disclosure: Author owns PFE

Investment Banking Earnings start the Rally, Fed rate cut kicks it into Gear

Markets came out to a flying start this morning as Goldman Sachs (GS) and Lehman Brothers (LEH) showed the Street that in fact all is not dead in the world of Investing. Lehman, which was creeping into talk circles of being the next Bear Stearns, showed just how well it can keep itself going with a better than expected quarter.

More of the same came out of Goldman Sachs, which beat estimates again, providing the guiding light for buyers jumping back into the financial sector. The earnings numbers were sharply lower than a year ago at both firms, but both also registered upside surprises on top of beaten down analyst opinions. Lehman earned almost $500Million of $0.81/share vs. the expected $0.72/share. More importantly the company on the conference call downplayed any cash strapped concerns by announcing that Lehman has a strong balance sheet with $30Billion in cash on hand as well as $64Billion in very liquid assets. A very strong foundation that'll keep it afloat, by any measure!

Shareholders and investors rejoiced at the quarter sending depressed Lehman stock up almost 50%. At the other end of Wall Street, Goldman Sachs shares gained 16% to $175, following a better than expected quarter. Goldman earned $1.51Billion, $3.23/share in profit vs. the expected $2.59. Management gave speeches of confidence in the cash position at Goldman and investors were very impressed at the raw numbers and the ease at which GS seems to maneuver around the economic landscape.

The market momentum continued throughout the day and once the news hit the wires that the Federal Reserve cut the Interest Rate in the US by .75% the market seemed poised to go nowhere but higher. The day finished at the peak of the session, and the Dow (420 points, 3.5%), the Nasdaq (90 points, 4.2%) and the S&P (54 points, 4.2%) all recorded substantial gains.

Disclosure: Author owns GS

Markets Experience Rebound Rally as Government pledges $200 Billion

Well that good old trusty Government in the United States decided to up the ante in the credit recovery debacle. The US will pump upwards of $200Billion to ease liquidity worries throughout the Financial sector. Is this too late? Maybe, but traders didn't seem to think so as major indices jumped much higher on the news.

The Dow jumped over 400 points, closing up 3.5% while the Nasdaq up 4% and the S&P up 3.7% followed suit. The Financial sector was especially active today as Citigroup (C) up 9%, Bank Of America (BAC) up 7% and Wachovia (WB) up 13%, experienced hefty gains.

Several recent battered technology names also staged recoveries on the day, with one of the most notable being Google (GOOG) up $26 or 6.3% as news surfaced from the European Union blessing its acquisition of DoubleClick. This clearance allows the search giant to finally start to integrate DoubleClick into its own operations and being to expand DoubleClick display advertising technology in an attempt to supplement its market leading position in search based textual advertising.

Late Session Recovery helps Stocks End Flat

After another lackluster trading session, following Friday's overwhelming bearish day, stocks held up in the afternoon and rallied to finish mainly flat. The Dow Jones finished the day own 7 points while the Nasdaq was down 12.

Technology and Financials were the biggest sectors in the red as Oil surged towards a $104/barrel record. Oil closed at around $102, a couple dollars off of the high. More economic metrics were on tap for today as well, most notably US Manufacturing Activity (48.3 vs 48.1 expected). This indicated a lesser contraction than the market expected but not enough to woo anyone in the Trader's seat that we're through this economic slowing period.

Of note in the world of the WC Power Tech Fund Investment Blog; Tomorrow a post comes from a guest contributor with regards to Small-cap and Micro-cap Investing.

Rise in Retail Sales Causes Market Rally

The Dow Jones closed up almost 180 points and the Nasdaq added over 50 points on a day where optimism ruled The Street. January retail sales data posted a 0.3% rise after the December metric declined. Analysts expected a further decline in January also.

Leading the way was Technology and Energy stocks. Traders are weighing the recent market weakness in the Tech sector and trying to time the "bottom" in Growth-Tech. The situation in Venezuela is putting pressue on Energy and led to Oil rising to $93. The country said that it would not sell Exxon Mobil (XOM), America's Largest Company.

Service sector reports Contraction, Ignites Recession fears

Markets around North America tumbled Tuesday as an unexpected hit in the Services sector drove stocks to a large sell-off. The Dow, Nasdaq and S&P were all off about 3% while the Canadian TSX slid over 2.5%. Investors re-kindled recession fears on the news of a contracting indicator of service sector strength, and on that basis sold off stocks broadly.

The research metric for the service sector, which includes various business types, from retail to banking to dining, is measured by an index from the Institute for Supply Management. It read below 50, signifying a contraction. For the Bulls out there, contraction is a scary word in this scenario as it means No-Growth, and No-Growth is what sells off stocks these days.

The full effects of the Federal Reserve's rate cuts have not yet been seen in these metrics so economists are hopeful for a return to growth reading next month. Until then, the Recession word will be on more minds once again.

NYSE Euronext (NYX) was under immense selling pressure today, falling 14% on its quarterly earnings report. The exchange reported $0.59/share in earnings versus $0.29/share a year ago. These numbers including now the combination of Euronext's European trading operations were roughly in line with expectations. The company said its on track to secure more cost savings over the next 2 years as more synergies with Euronext are realized. This would equate to as much as $250Million by 2010. With full year profits for 2007 hitting over $600Million, you can see these cost savings will be significant drivers of profit growth in the future.

There is concern that NYX is losing share of its own market trading to Nasdaq and that it must drive deeply into the ever expanding, and more lucrative futures and options trading markets. Priority number 1 for the company these days is multi-faceted. It must stem the tide of market share loss, even though it is producing record trading volume levels of its own, while also looking for strategic investments. With Nymex (NMX) being the target of a Chicago Mercantile Exchange (CME) offer of $11Billion, the pressure is on for NYSE to look to consolidate more worldwide trading houses.

Disclosure: Author is long NYX

Markets Continue Slide. Economic Worries Standout in Dow's 300 Point Loss

Slowing US Economics have pushed sellers to the forefront this entire week, and today's 300 point Dow tumble was another straw in the year to date tumbling market house. S&P stands down 9% year to date, while the Nasdaq is off 11%.

The Nasdaq was hit hard this week as technology sold off on those very same economic fears. The winners heading into the tail end of 2007 were those being bid up to ever higher 52-week and all-time highs and soon of these companies are feeling the financial fallout as their P/E ratios get slashed worst than Real Estate on Elm St.

It didn't help this week that Intel (INTC) missed numbers, by a couple cents, and came in on the low end of revenue guidance, even though business is just fine (Revenue guidance of up to $10Billion for next quarter versus the estimated $10.1Billion). The stock took a 12% hit that day, putting it under $20/share.

Apple's (AAPL) marquee event MacWorld, was deemed a failure this year as everything announced was expected and it included nothing as revolutionary as last year's iPhone. A Router/Storage hub, an iTunes movie rental service, new iPhone software and the new thin laptop that has been criticized by many as not hitting any particular market. Only time will tell whether the super thin Mac Book Air will sell decently well at its $1800 price point. Sony (SNE) has their ultra-thin laptop line well over the $2000 price point for years. Apple shares have fallen from their $202 record and now sit just over the $160 mark, with expected quarterly blow-out earnings numbers coming next week. A troubling fall for a company built on Steve Jobs hype, which now has analysts falling over themselves reiterating its cheapness/value opportunity.

These are troubling economic times nonetheless, as investors look for safer havens, seeing their financial, consumer and technology faithful stocks being sold off in great numbers.
The Googles (GOOG), Baidus (BIDU) and Amazons (AMZN) are all down significantly as the high P/E ratio game of Internet companies is shrinking due to recessionary economic factors and fears. The banks are steeped in mortgage losses and more potential dividend cuts are luring Investors away. Even hot commodities of late like Oil and Gold have cooled quickly and abruptly by the sell triggers.

All eyes now shift to the Federal Reserve and Chairman Ben Bernanke. Traders expect at least a .5% Interest Rate cut at the next meeting, and Bernanke has pledged the Fed will be aggressive in trying to fend off recession. We'll see at the end of the month how it all plays out, but till then expect the same volatility and uneasiness when choosing the right things to buy, or in fact short sell.

Disclosure: Author owns AAPL, GOOG