Today will be a critical day for the stock market. With yesterday’s 248.42-point (2.9%) drop in the Dow, we’ve now had six consecutive days in which the index closed to the downside.
Since the start of the week, we have been looking for a rebound and thought we would get one on Wednesday, but with the grim retail sales numbers from the Commerce Department before the market opened, any chances of that got eliminated.
Going back just over a year, the longest losing streak for the Dow was eight days, when from October 1, 2008 through October 10, the Dow lost 2,399.47 points from the September 30th 10,850.66 close.
But that was during the period when it became apparent that the Wall Street of old, was going to be no more. Two weeks prior, on Sunday September 14, Merrill Lynch agreed to sell itself to Bank of America and Lehman filed for bankruptcy the next day. Also AIG was on the precipice and the investment community was waiting to see which would be the next Wall Street firm to fail.
Prior to that, from January 15, 2007 to January 22, we had a five-day losing streak, but other than those two instances, the longest losing streak we’ve had in a year, is four days.
We are hopeful for today. We could get details of President-elect Obama’s stimulus plan, which could boost stocks in the short-term. The press is also reporting that a possible 10-day cease-fire between Hamas and Israel may happen very soon.
On the other hand, with Steve Jobs taking a six-month medical leave from his CEO job at Apple that may weigh on the markets. Apple stock is down over $6 in after hours trading. We also get initial jobless claims numbers, which will serve to remind us of the fragile state of the economy, but if we get news from the new administration about its stimulus plan, they would probably address that bit of news and counter it.
Read our prior posts for stock recommendations for the near-term.
Earnings Watch For Today:
Briggs and Stratton (BGG), which is known for its engines that power lawn mowers, will report Q2 2009 results today, before the market opens. Consensus estimates for the quarter are $0.03.
Genentech (DNA) will be announcing its Q4 2008 and full-year results after the close of the stock market today. Analysts are looking for the company to earn $0.96 for the quarter and $3.43 for the full year.
Tech bellwether Intel (INTC) will report its fourth quarter and full year results today after the bell. Analyst on average, are looking for the company to earn $0.04 for the quarter and $0.92 for the full year.
On January 7th, the company guided lower for the second time in two months, when it announced preliminary Q4 revenue of approximately $8.2 billion, down 20 percent sequentially and down 23 percent year over year. Analysts had been looking for $8.7 billion. On November 12, 2008, the company had announced that it expects Q4 revenues to come in at $9 billion plus or minus $300 million, which was lower than the previous company forecast of between $10.1 billion and $10.9 billion.
JP Morgan Chase (JPM) will report its Q4 2008 earnings results at 6:30 AM today. Consensus estimate for the period, are for a loss of $0.01.
More than any other earnings announcement due today, JP Morgan’s will have the most potential to set the tone for the markets as it is probably now considered the best run Wall Street firm/bank, so if its not doing well, that’s a huge problem. That and the fact that it reports before stocks start trading today.
