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Saturday, October 20, 2012

WALL STREET 20 Oct 2012 >>> Dow Swallows Huge Losses On Bleak Blue-Chip Earnings

Parabolic SAR follows price and can be considered a trend
 following indicator. SAR can act like a trailing stop.
Once an uptrend reverses and starts down, stops
continuously falls as long as the downtrend remains

 in place. The SAR dots have yet to appear at the
Extreme Point (Top) of the above chart.
The Dow Jones Industrial Average (DJIA)  spent the session wallowing in the red, suffering a triple-digit slide and erasing nearly all of its weekly surplus by the close. The (DJIA – 13,343.51)  blazed a steady trail lower today, surrendering 205.43 points, or 1.52%, to pare its weekly gain to just 0.1%. As a result of its worst single-session drop in four months, the blue-chip barometer ended beneath its 50-day moving average for the first time since July 12. Of the Dow's 30 components, only Home Depot (NYSE:HD) bucked the trend, tacking on 0.2%. Of the 29 declining equities, McDonald's (NYSE:MCD) suffered the worst, giving up 4.5% in the wake of disappointing earnings. DJIA had it's weekly surplus shaved to 0.1%.

Likewise, the S&P 500 Index (SPX – 1,433.19) steepened its losses as the session progressed, falling 24.15 points, or 1.66%, before finding a foothold in the 1,430 region. For the week, the SPX edged 0.3% higher. Meanwhile, a batch of lackluster earnings in the tech sector weighed on the Nasdaq Composite (COMP – 3,005.62), which plunged 66.78 points, or 2.17%, to finish at its lowest point since Aug. 6. However, the index maintained its perch atop the round-number 3,000 marker. For the week, the COMP gave up 1.3%.
“And once you get one quarter of negative earnings, it’s a precursor. It’s the cockroach theory: If you find one, there’s probably many more.”

"Today was all about earnings. The reality is we're in the second inning and earnings have stunk. We'd better put our 'rally caps' on and hope earnings come in a lot better next week, or the recent weakness could very well continue."

“We’ve had some household names disappointing on revenue, earnings or guidance. We had about 80 companies reporting this week: financials that did better and technology that did worse. Since this is the worst day we’ve had in months, it reminds us that we haven’t had much volatility or downward pressure since the bottom in June.

“The earnings season is not great right now, but the fundamentals haven’t changed; the U.S. economy is still improving, and it hasn’t gotten worse in Asia or Europe. The market is taking a pause.”

"Poor corporate earnings reports pounded the market today, in a sour end to an otherwise strong week of trading. Disappointing results from three giants of the Dow _ Microsoft, General Electric and McDonald’s _ were to blame. But the broader market fell, too, and the Standard & Poor’s 500 index fared even worse in percentage terms."


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