Weekly Current Market Conditions 05/15/09 - Free Stock Market Analysis

Here is the latest trading and free market analysis video on the S&P500 (SPX) and SPY ETF

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5/15/09 16:35 ET Dow -62.68 at 8268.64, Nasdaq -9.07 at 1680.14, S&P -10.19 at 882.88:
[BRIEFING.COM] Choppy trading in the early going gave way to broad-based selling, which resulted in the stock market's fourth decline this week. As a result, stocks logged a weekly loss of 5.0%, which is its worst in two months.

Stocks struggled to find clear direction in the first couple of hours of trading. Participants were generally uninspired by news that the Euro zone economy contracted for its fourth consecutive quarter, and that the pace of that contraction has accelerated. Despite the dour batch of data, European indices closed in mixed fashion.

U.S. economic also did little to motivate. The April Consumer Price Index (CPI) met expectations by coming in flat, while Core CPI saw a stronger increase than had been expected by coming in with a 0.3% monthly increase. Industrial production for April fell 0.5%, which wasn't quite as bad as what had been expected, and capacity utilization came in at 69.1%, moderately better than what was expected.

Though the economic readings were generally in-line to slightly better than expected, participants are beginning to look for signs that economic conditions are actually tilting toward growth.

News that life insurers will have access to $22 billion in TARP funds initially won support for the group. However, concern that government funds may not win higher ratings for the companies along with the recognition that many companies continue struggling with macro headwinds undercut the group's strength. Life and health insurers finished 3.5% lower.

In a similar vein, rating agency Fitch placed several regional banks on Credit Watch Negative amid concern related to further credit deterioration. Regional banks finished the session 3.0% lower.

Weakness in insurers and banking issues dragged the financial sector to a 2.5% loss, which was worse than any other sector. With abounding weakness in the financial sector, the broader market was left without one of its primary leaders.

Sellers also hit energy stocks with stiff pressure. The sector shed 2.2%. Its weakness was exacerbated by a 3.6% drop in crude oil prices, which settled at $56.52 per barrel.

Utilities underperformed for the entire session, extending the prior session's weakness. Electric utilities fell 2.7% amid news that FirstEnergy (FE 36.47, -3.87) held a disappointing rate auction.

Retailers showed periodic strength in the wake of better-than-expected earnings from Nordstrom (JWN 22.58, +1.63) and JC Penney (JCP 26.51, -0.11), but the group still finished 0.7% lower.

Tech, which is the largest sector in the S&P 500 by market weight, showed relative strength and actually spent the majority of the session as the only sector in the green. While several large-cap tech stocks held their gains, the broader tech sector was unable to fight off the negative bias and finished 0.1% lower.

The broader market did find some support late in the session, but only after it broke below its 20-day moving average to hit 880. Stocks recovered a bit from there, but still finished with broad-based losses as declining issues outnumbered advancers by 3-to-1 in the S&P 500.

Options for May expired this session, but that didn't seem to lift trading volume above recent averages. Less than 1.5 billion shares traded hands on the NYSE big board this session.

Nasdaq -9.07 at 1680.14... S&P Midcap 400 -1.1... NYSE Adv/Dec 1088/1922... Nasdaq Adv/Dec 1052/1626.

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