Stocks Waver After Drop in Consumer Sentiment

September 17, 2010 by staff 

Stocks Waver After Drop in Consumer Sentiment, NEW YORK – (AP) – Stocks wavered Friday, after upbeat earnings news from leading technology companies was tempered by a disappointing report on consumer confidence.

The Dow Jones industrial average, which has been rising throughout the month, remained in afternoon trading. There was as much as 55 points earlier in the day.

Stocks started the day with a note following the strong gains of BlackBerry maker Research in Motion Ltd. and the software company Oracle Corp. earnings largely evaporated in late morning trading after disappointing results came from the University of Michigan / Reuters survey of consumers.

The S & P 500 briefly traded at its highest level in four months Friday before slipping back into the same range it has been since late June. Traders are closely monitoring the level of 1131 in the S & P, which was the highest point reached in intraday trading on June 21. It’s almost crossed that barrier in early August before going into a swoon, which lasted most of last month.

Traders fear that if a threshold techniques, such as the June 21 high briefly crosses, which suggests a lack of confidence in the rally. Investors see it as a positive sign for the purchase accelerates as it crosses the barrier, which did not happen on Friday.

Uri Landesman, president of Platinum Partners, said that if the S & P can revive the past 1131, which could increase further in the next couple of weeks. But if you cannot significantly obscure the level drops back below 1115, down to about a week, “we could get to 1,000 pretty quick,” said Landesman.

The stock market has been in an almost unbroken march higher this month; despite that September has historically been a weakness for equities. The S & P has gained 7.2 percent in the month to date, the Dow Jones 5.8 per cent.

The Dow Jones fell 0.53, or 0.01 percent, at 10,594.30 in afternoon trading.

The S & P 500 rose 0.11, or 0.01 percent, at 1,124.77, after briefly crossed above the technical barrier of 1,131 in early trading.

The index-heavy Nasdaq was held in some of its gains driven by the results from Oracle and Research in Motion. It rose 10.80, or 0.5 percent, at 2,314.05.

Volume was exceptionally high and more volatile Friday because of what is known as “quadruple witching.” That occurs on a day when stock index futures, stock index options, stock options and stock futures all expire on the same day.

About four stocks rose for every three that fell on the New York Stock Exchange, where volume came to 975 million shares compared with 560 million traded at the same point Thursday.

Oracle reported fiscal first-quarter earnings that easily topped forecasts after the market closes on Thursday. Shares rose to 1.99, or 7.9 percent, to 27.35 y.

Research in Motion also reported a big jump in profits, as it adds new subscribers. Investors have been worried about competition for BlackBerry Apple Inc. ‘s iPhone and mobile phones in Google Inc.’ s Android technology. The shares rose 78 cents to 47.27 y.

Money flowed into treasuries again after reading the weak consumer confidence and a Labor Department report showed that consumer prices rose slightly in August.

Tim Rood, a managing director of The Collingwood Group, said the report on consumer prices would not have been enough to allay concerns about potential deflation. That could force the Federal Reserve to re-enter the bond market and buy more Treasuries and mortgage bonds in an effort to stimulate the economy.

“Just when you think it’s all in … you basically have to bend,” Rood said the Federal Reserve. The central bank ended similar policies, known as quantitative easing, earlier this year, only to stagnate growth.

The yield on the 10-year bond, which moves opposite its price, fell to 2.74 percent from 2.76 percent late Thursday. Its performance is often used to set interest rates on mortgages and other consumer loans.

Gold hit a new record on Friday again and 1,284.40 an ounce before easing to $ 1,278.00 an ounce.

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