The market started out strong today
, encouraged perhaps by the news about Osama Bin Laden, although the consensus seems to be that his death will have little or no effect on the economy. In fact, the market started selling off mid-morning and ended the day down. Nasdaq reached a 10-year high of 2,887 today before joining the sell-off and ending the day at 2,864.
The Energy Sector appeared to lead the market down, in response to the report on construction spending, which was up for the month but also recorded the lowest reading since 2000. Chesapeake Energy (CHK) was one of the sector's casualties, losing $-0.32 a share, and down -3.5% in after- hours trading after losing almost 1% during the day. Another was Loews Corporation (L), whose earnings were down -9%.
There were, however, a number of strong first quarter earnings reports, along with positive guidance. Dish Network Corporation (DISH) beat estimates by +$0.54 and was up +18% for the day; Humana's () +22% increase in earnings handily beat estimates, and the company also raised its 2011 guidance; Automatic Data Processing (ADP) was in line with estimates and offered a positive outlook; and Hartford Financial (HIG : Stock Quote, News and Research" target="_blank" href="/symbol/HIG">HIG) earned $1.16 for Q1, beating estimates by +$0.21 and gaining +2% in after-hours trading.
The VIX, the "fear index," was up sharply, +8%. This could be due to fears of retaliation from the death of Bin Laden, but the reading of 15 for the VIX is still quite low.
Last week was a different story.
In a week of strong earnings reports and generally positive economic news, the market reached new 3-1/2 year highs. Durable goods, new home sales, and construction spending were the best evidence of the continuing economic recovery, while personal income, Michigan sentiment, and ISM manufacturing index were all a tad better than expected.
On the negative side, GDP grew +1.8% for the 1st quarter, down from the +3.1% of Q4 and slightly worse than the expected +2%. Initial jobless claims were the biggest party-pooper, jumping to 429K from the previous week's 404K and surpassing the consensus number of 390K.