Morning Update: 9/19/2012

The stock market indices had a slightly positive session at the end of the day. It was a little bit choppy, especially since the late rollover took back a big chunk of the gains.

The day started out on the downside. The indices sharply moved up, and then pulled back just as sharply, if not more so. They held support, though, and that triggered an all-day session run into the last hour. At midday, the indices pulled back to test support, but once again, rallied into the last hour, with the Nasdaq 100 having rallied from 2850 to 2871, and the S&P 500 having rallied from 1458 to 1465. However, in the last 45 minutes, they rolled over to take back a big chunk of the gains.

Net on the day, the Dow was up 13.32 at 13,577.96, about 50 points off the high. The S&P 500 was up 1.73 at 1461.05, 4 points off the high. The Nasdaq 100 was up 6.65 at 2864.03, 7 points off its high.

Advance-declines were 17 to 12 positive on New York Stock Exchange, and 13 1/2 to 11 negative on Nasdaq. Up/down volume was 3 to 2 positive on New York, with total volume of a light 630 million shares. Nasdaq traded over 1.8 billion shares, and had a 5 to 4 positive volume ratio.

There was definitely a narrowing of technicals by the end of the day as the market rolled over, on the S&P 500 as well.

Stepping back and reviewing the hourly chart patterns, the indices were down sharply earlier, but rallied into midday, pulled back and then rallied to new highs for the day on the Nasdaq 100 into the last hour, but when the S&P 500 did not confirm, they rolled over hard into the close and gave back a big chunk of the gains. Still, they closed positive on the day, but it was a little disappointing.

Thursday, September 20

Economics
08:30 Initial Jobless Claims – consensus 370K, prior 365K
08:30 Continuing Claims – consensus 3311K, prior 3322K
08:58 Markit US PMI Preliminary – consensus 51.3
10:00 Philly Fed – consensus -3.8, prior -7.1
10:00 Leading Indicators – consensus -0.1%, prior 0.4%
11:00 Fed to sell $7b-$8b notes in 3-year range
1:00 Treasury selling $13b 10-yr TIPS (reopening)
02:30 CNY HSBC Manufacturing PMI
04:30 JPY All Industry Activity Index
05:00 JPY BoJ Monthly Economic Report
06:00 EUR German PPI
06:00 CHF Trade Balance
07:15 CHF Industrial Production
07:30 EUR German PMI
08:00 EUR Eurozone PMI
08:30 GBP Retail Sales
14:00 EUR Eurozone Consumer Confidence
8:30 Spain to sell bonds

Earnings
Before:
Jefferies (JEF) EPS 31c
CarMax (KMX) EPS 51c
Rite Aid (RID) EPS -7c
After
Oracle (ORCL) EPS 53c

Existing home sales were 4.82 million, more than the expected 4.50 million. Housing starts were 750,000, less than the estimated 768,000. Oil inventories rose 8.5 million barrels. Last week they rose 2.0 million. On Thursday we will get initial jobless claims and the Philadelphia Fed mfg index.

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