(By Jordan Kahn) The markets are sharply lower this morning on the heels of some disappointments in earnings reports, probably some profit taking, and also possible the effect of options expiration today.
Yesterday was a disastrous day for Google (GOOG) when their earnings report was mistakenly released early. The results were below expectations and the stock began to slide. Although trade in the stock was halted, it was no better after it opened for trading again and as of now its about 60 points below where it stood before the gaff.
But a host of other blue chip stocks that have reported in the last 24 hours are also trading lower today. Here is a quick summary:
Stocks rising on earnings: , RVBD, SNDK, KSU, MAN, IR, COF
Stocks falling on earnings: GE, CMG, MSFT, MCD, SLB, PH, APD, BHI, ATHN
In economic news, existing home sales for September hit 4.75 million units. This figure was above consensus but below last month's figure of 4.83 million units.
Overnight, Asian markets were mixed. The Bank of Japan governor said the global slowdown may delay capital spending plans by corporations and they may have to consider further easing.
In Europe, markets are lower after the latest Eurozone Summit has ended without much fanfare. The prospect of a Banking Union is supposed to be structure by year-end but not finalized until 2014. No decision has been made about a Spanish bailout. And Germany reiterated that joint Euro-area debt is out of the question.
The euro is lower today pushing the dollar higher. Oil prices are roughly flat near $92, while gold prices are lower so far to $1737.
The 10-year yield is pulling back to 1.78%. And the volatility index is up 6% to 15.95. Today is also options expiration.
Trading comment: Trading remains choppy at best, and the reactions to earnings reports have been mixed. It has been a risky game to take positions ahead of these earnings reports. While the misses and guide-downs haven't been big, it is the reaction in the stocks that counts. So I want to remain cautious and give this market and stocks a little more room to see if they are still consolidating or if we are still going to get more of a correction. The Nasdaq is back below its 50-day average and has broken below last week's lows- a sign of caution.
KAM Advisors has long positions in GOOG, MCD