logo
  Join        Login             Stock Quote

What The Market Wants: Technology Stocks Under Siege

 April 17, 2012 03:38 AM
 


(By David Brown)Here we are again wondering what the market wants.  Today, it clearly wasn't Technology stocks, as various issues dragged both Apple (AAPL) and Google (GOOG) lower. Apple has been hurt by the likelihood of rising supplier costs from its Chinese supply chain related to the poor working conditions issue.  In addition, the Federal Government, along with 15 states, announced an anti-trust suit against Apple and a number of book publishers for price collusion. If successful, the suit would lower e-book prices, favoring Amazon and hurting Apple due to its alleged collusion with the book publishers.

[Related -Bank Stocks: The Misbegottenness of the Volcker Rule Truly Knows No Bounds]

Google, meanwhile, faces a significant lawsuit of its own from Oracle over its alleged use of Java technology in Androids. Separately, the FCC fined Google over its alleged violation of privacy rights from its Street View service.  And if all of that was not enough, institutional shareholders are raising concern over Google's 2-for-1 stock split last week, since the new shares will not carry voting rights.

Since both Apple and Google have recently hit new highs, it is not that surprising that these issues, which in total are unlikely to have very serious effects on either company, could indeed generate a wave of profit taking.

It was a bit of an odd day with the DJIA up 70+ points and the NASDAQ losing over 23 points while the S&P 500 "sat" there finishing nearly "dead even" (-0.7%).  But it does conclude another week of losses for the S&P, now nearly 3% off its high two weeks ago of 1422.

[Related -Gold hasn’t lost its allure in my portfolio]

Globally, we're still faced with a lot of "small" problems.  Although none by itself is a cause for alarm, how many times can you say "small problem" before the aggregate "small problems" become a large problem?  Spain continues to flounder with bond yields rising back to dangerous levels. Stability in Egypt is wavering. Ditto for Afghanistan and Pakistan.  After last week's embarrassing rocket launch failure, Korea may decide that it needs to prove its competence by testing another atomic device. There's a lot to worry about but still a paucity of alternatives to the equity markets for decent returns.

Valuations still seem reasonable against historical norms.  Basic Materials and Financials are both oversold due to legitimate concerns that may have driven their respective sector prices too low.  Consider the strength in today's Financial sector led by Citigroup (C), up nearly 2%, despite missing all their numbers, and last week's strong reports by JP Morgan (JPM) and Wells Fargo WFC).


Next Page >>123
iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageChart Says This Retailer's Comeback Isn't Finished

One of the surprises, at least on the surface, of the market's recent swoon was the outperformance of read on...

article imageETF Performance Review: Major Asset Classes | 19 Dec 2014

It’s all about real estate investment trusts (REITs) these days when it comes to bullish performance among read on...

article imageOil and Global Stock Markets Rebounding Sharply

So far so good on our expectation of a 4 to 5% pullback and then a resumption of the bull read on...

article imageGrading the FOMC

Love its members or loathe them, you have to admire the gradual impact the policy-making committee has had read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.