Morning Update: 9/5/2012

The stock market indices were hit hard in the morning as economic news came out that disappointed a lot of traders. The market then went to nominal new lows below some key support levels on the Nasdaq 100, but right at it on the S&P 500. When that failed to follow through, they then rallied sharply, first starting off slowly, and then accelerating in early afternoon with an explosive move. It took the NDX up from 2745 to 2781, and the S&P 500 from 1396 to 1409. The move ran into declining tops resistance and backed off into the last hour, putting all of the indices slightly in the red.Net on the day, the Dow was down 54.90 at 13,035.94, about 57 points off its high and 60 points off the low. The S&P 500 was up 1.64 at 1404.94, only 5 points off its high and 8 points off the low. The Nasdaq 100 was down on 21 cents at 2772.03, 9 points off the high and 8 points off the low.

Advance-declines were a little less than 3 to 2 positive onNew York Stock Exchange, and about 3 to 2 positive on Nasdaq. Up/down volume was slightly positive on New York, with total volume of 633 million shares. Nasdaq traded over 1.5 billion, and had a slightly positive volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices were down sharply in the morning, and came back sharply to new session highs by late afternoon, only to pull back into the close on profit-taking to close narrowly lower on the session, but mixed on the technicals.

Wednesday, September 5

Economics
07:00 MBA Mortgage Purchase Index
08:30 Nonfarm Productivity – consensus 1.8%, prior 1.6%
08:30 Unit Labor Costs – consensus 1.5%, prior 1.7%
09:45 ISM New York – consensus 55.2
11:00 Fed purchasing $4.5b-$5.5b in 8 to 10-year range
11:30 U.S. to sell 4-week bills
01:30 AUD GDP
02:30 CNY HSBC Services PMI
08:00 EUR PMI Composite, Services
08:30 GBP UK PMI Services
09:00 EUR Eurozone Retail Sales
9:30 U.K. to sell GBP 1.75b 30-year bonds
10:30 Germany to sell EU5b 10-year notes

Earnings
After:
Verifone (PAY) EPS 70c
Dollar General (DG) EPS 64c

The manufacturing ISM number came in at 49.6, worse than the expected 50.0. Construction spending dropped 0.9%, less than the anticipated increase of 0.4%.

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