Morning Update: 10/19/2012

NDX, GOOG, A Real Drag On The Indices

The stock market indices had a nasty session, particularly the Nasdaq 100. Google Inc. (GOOG) earnings were released early accidentally by publisher R.R. Donnelley midday. They had a low estimate, and the stock got crushed for 75 points, and then trading was halted. That included Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Priceline.com Inc. (PCLN) and many other Nasdaq 100 market leaders. Although they did get a snapback in the last hour, the NDX closed down for the day.

Net on the day, the Dow was down 8.06 at 13,548.94. The S&P 500 was down 3.57 at 1447.34, about 5 points off the low and 7 points off the high, so midrange. The Nasdaq 100 closed down 31.45 at 2744.17, about 10 points off the low.

Advance-declines was slightly negative by about 75 issues on the New York Stock Exchange, and almost 2 to 1 negative on Nasdaq. Up/down volume was a little less than 4 to 3 positive on New York, with total volume of about 700 million shares. Nasdaq traded over 2 billion, and had a 2 to 1 negative volume ratio.

Stepping back and reviewing the hourly chart patterns, the indices moved lower at the opening, bounced, and then made lower lows only to snap back to the session highs and new rally highs on the S&P 500 at 1464. The NDX, at that point, was far from its high and it caused a rollover, acerbated by Google. Net, net it was a negative day on the indices.

We’ll see what that means, but we certainly backed off key overhead resistance at 2780 late yesterday and again today when we got back up to 2775.

It’s not the prettiest sight in the NDX. There’s some weight here.

Institutional

Friday, October 19

Economics
10:00 Existing Home Sales – consensus 4.75M, prior 4.82M
11:00 Fed to sell $750m-$1.1b TIPS in the 2 to 4-year range
02:00 NZD Credit Card Spending
05:00 JPY Leading Index
06:00 EUR German PPI
08:30 GBP Public Sector Borrowing
12:30 CAD CPI

Earnings
Before:
McDonald’s (MCD) EPS $1.48
Honeywell (HON) EPS $1.14
General Electric (GE) EPS 36c
Baker Hughes (BHI) EPS 84c
Wynn Resorts (WYNN) EPS $1.34
Schlumberger (SLB) EPS $1.06

Initial jobless claims were 388,000, worse than the expected 365,000. The Philadelphia Fed mfg. survey was 5.7, better than the consensus 0.5. On Friday we will get existing home sales.

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