Dow Jones Level After Thursday’s Carnage

After yesterday's Dow Jones 513-point freefall, traders continued to be
cautious Friday, with the Dow moving in and out of positive and negative
territory and landing above 11,388. Traders continued to shun equities for
safe-haven investments such as Treasuries and gold. Swiss and Japanese
authorities have instituted countermeasures to prevent their currencies,
considered safety buys, from becoming too overvalued. A decent jobs report in
the U.S. offered little relief to double-dip recession fears among investors.
However, the Dow Jones Industrial Average is down more than 6% for the week and
more than 1.6% for the year. Up early yesterday but falling into negative
territory because of the rout, Kraft Foods (NYSE: KFT ) was up about 80 cents to
over $34.80, about a 3% gain. Kraft announced Thursday that it was splitting
into two units, one focused on North America and the other on international
markets. This was endorsed by investors, including Warren Buffett, the companys
major shareholder. Kraft is now trading less than 5% beneath its year high.
General Electric (NYSE: GE ) was up more than a nickel, a 0.36% pickup, to
around $16.55 as bargain shoppers went after blue chips. General Electric is
down more than 9% for the week and is trading double digits beneath its 20-, 50-
and 200-day moving averages. With a relative strength index rating of 28.33,
General Electric is beneath the 30 floor for when a stock is viewed as being
oversold. Gaining slightly because of blue-chip bargain shoppers was DuPont
(NYSE: DD ), up a couple of cents to about $47.25. The chemical maker is down
more than 9% for the week. DuPont has a relative strength index rating of 25.46.
Continuing its role as the worst-performing stock on the Dow for 2011, Bank of
America (NYSE: BAC ) was down about 2% to under $8.60, dropping more than 15
cents per share as it was downgraded today along with the entire financial
sector. For the year, the financial sector has been the worst-performing segment
on the Dow. Bank of America delivered poor earnings in July, losing 90 cents per
share, and enjoyed somewhat of a rebound as traders felt it was not trading near
its intrinsic value. The Countrywide Credit acquisition, however, has plagued
Bank of America with woes it may never fully escape on its own. Bank of America
is down almost 30% for the quarter. Fears of a recession had McDonalds (NYSE:
MCD ) down about a dollar to under $83, a loss of more than 1%. Strong earnings
for the second quarter, many positive analyst recommendations and investors
seeking safety stocks had MCD rising above the carnage on Wall Street, up more
than 8% for the quarter. But the 10-Q released this morning, along with fears of
a recession and less consumers eating out, were bringing McDonalds down. Home
Depot (NYSE: HD ) continued to fall on recession fears and heavy put action,
bringing the stock down about 0.5% to under $31.40, a loss of more than 15 cents
per share. Now trading more than double digits beneath its 20-, 50- and 200-day
moving averages, Home Depot has a relative strength index rating of 23.50.
Jonathan Yates does not own any of the stocks mentioned in the article.