Yesterday was almost devoid of European troubles, and so the focus was on
several positive U.S. economic reports. Producer prices increased in November by
0.3%, and weekly jobless claims fell to 366,000, the smallest number of claims
since May. And the Empire State Manufacturing Survey improved to 9.5 for
December versus an expected 3. Finally, the Philly Fed Survey reported a reading
of 10.3 in December versus an expected 4.5. But early gains were erased mainly
for technical reasons. It was evident that the market lacked leadership after
opening higher. Thus, the remainder of the day was spent in a slide. At the
close, the Dow Jones Industrial Average had gained 0.38%, the S&P 500 rose
0.32%, and the Nasdaq was up 0.07%. Volume was light with the Big Board trading
869 million shares and the Nasdaq crossing 475 million. Breadth was positive on
both exchanges: NYSE advancers exceeded decliners by 1.7-to-1, and on the
Nasdaq, advancers were ahead by 1.3-to-1. Click to Enlarge Despite a recent
sell-off in the other indices, the Dow industrials still tenuously hold above
the 200-day moving average (solid red line), as well as the support line at
11,650. However, MACD is grossly overbought, and on a pullback of the Dow, this
internal indicator will no doubt issue a sell signal.
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