The stock market proved to be resilient Thursday, finishing moderately higher in the face of mixed economic news and high oil prices. Weekly Initial Claims were surprisingly better than expected, while new home sales reached their lowest level in more than seven years.
The stock market opened on a high note, helped in part by a Wall Street Journal article that indicated J.C. Flowers, Bank of America and JPMorgan Chase are open to renegotiating their agreement to acquire student lender SLM Corp (SLM 49.12, +4.11).
Microsoft (MSFT 29.49, -.01) also gave a boost to the stock market's opening after it was reported that its video game "Halo 3" generated $170 million during its first 24 hours, which makes it the most successful release in U.S. entertainment history.
The major indices didn't show much reaction, though, to the Department of Labor's Initial Claims report. The report for the week ended September 22 showed that jobless claims dropped to 298k versus the consensus estimate that was set at 320K. The claims level is well below normal recession levels.
Stocks dipped ever-so-slightly after the New Home Sales report for August showed an 8.3% decline to an annualized rate of 795K. Economists expected a drop of 5.2%.
The weak report fueled speculation that the FOMC will again be inclined to cut interest rates at its October meeting. That consideration acted as a mitigating factor that kept selling efforts in check following the disappointing report.
The dollar index reached its lowest level Thursday since the inception of the index in 1973. The dollar index eased off its lows at close, but still fell 0.2% to 78.338. The CRB Commodity Price Index jumped 1.4%. Notably, crude oil rallied 3.5% to $83.09 and gold rose 0.6% to $739.90.
The materials (+1.0%), energy (+0.9%), and financial (+0.8%) sectors provided leadership Thursday for the broader market.
Utilities (-0.7%) and consumer discretionary (-0.1%) were the only sectors in the red Thursday. Consumer discretionary was a leader Wednesday, but weakness in General Motors (GM 36.46, -1.18 ) following Wednesday's 9.4% increase weighed on the sector.
The Personal Income and Consumption report will be released on Friday by the Dept. of Commerce at 08:30 ET.
Other economic reports, including Chicago PMI, the revision to the University of Michigan Consumer Sentiment survey, and Construction Spending will also be released Friday.
Trade system guidelines
(edited):
Only available to Newsletter Subscribers.
1.
SUN - Sunoco Inc
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
| 09-28-07 |
|
Long |
Above 15 high |
Sell 1/2 once risk covered |
Below LOD at time of setup |
|
|
* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 70.40
|
2.
AMX - America Movil SAB de CV
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
| 09-28-07 |
|
Long |
Above 15 high |
Sell 1/2 once risk covered |
Below LOD at time of setup |
|
|
* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 64.84
|
3.
VZ - Verizon Communications Inc
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
| 09-28-07 |
|
Long |
Above 15 high |
Sell 1/2 once risk covered |
Below LOD at time of setup |
|
|
* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 44.75
|
PX - Praxair Inc
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
| 09-27-07 |
09-27-07 |
Long |
83.33 |
Reached (83.60) |
Closed Below 83.33 |
up to + 67 cents per share (84.00) |
|
* 09-27-07 - stock gapped down
|
CSCO - Cisco Systems Inc
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
| 09-27-07 |
|
Long |
33.17 |
33.35 |
Below 32.85 |
up to + 12 cents per share (33.29) |
|
|
NVDA - NVIDIA Corp
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
|
|
Long |
Above 15 high |
Sell 1/2 once risk covered |
Below LOD at time of setup |
|
|
* did not setup
|
MSCC - Microsemi Corp
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
|
|
Long |
Above 15 high |
Sell 1/2 once risk covered |
Below LOD at time of setup |
|
|
* did not setup
|
CEN - Ceridian Corp
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
| 09-26-07 |
|
Long |
34.23 |
Reached (34.35) |
Below 34.23 |
up to + 36 cents per share (34.59) |
|
|
RIO - Companhia Vale do Rio Doce
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
| 09-25-07 |
|
Long |
31.89 |
Reached (32.82) |
Below 32.92 |
up to + $ 2.38 per share (34.27) |
|
* 09-25-07 - stock gapped down
|
GRMN - Garmin Ltd
| Entry Date |
Exit Date |
Position |
Entry Price |
Target Price |
Stop Price |
Max P/L |
| 09-25-07 |
|
Long |
115.24 |
Reached (116.06) |
Below 116.34 |
up to + $6.10 per share (121.34) |
|
* 09-25-07 - stock gapped down
|
FRO - Frontline Ltd
