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MARKETS SNAPSHOT FOR 18/10/11

Tuesday, 18 October 2011 | 21:03

DJ30 PointChange: +180.05 Level: 11577.05 NASDAQ PointChange: +42.51 Level: 2657.43 NQ100 PercentChange: +1.3 R2K PercentChange: +3.0 SP400 PercentChange: +2.6 SP500 PointChange: +24.52 Level: 1225.38 NASDAQ-Adv:1982 Dec: 595 NYSE-Adv:2562 Dec: 487

[BRIEFING.COM] Stocks extended their prior session slide in the opening minutes of trade, but a combination of technical support and leadership from financials led stocks back to higher ground. The effort was extended in response to word that eurozone officials agreed to boost bailout funds, although that story was called into question at the close.

The stock market scored a 2.0% gain today, offsetting a move of similar degree to the downside yesterday. Participants were initially inclined to cut down stocks this morning. Negative sentiment was stirred by news that China, which carries the burden of being the primary supporter of global growth amid tenuous macro conditions, experienced a slowdown in economic growth during the third quarter. The 9.1% growth rate was also less than the 9.3% clip that many had anticipated.

Early selling interest was also ushered in by the threat of a future downgrade of France's pristine debt rating, which was put on negative watch by analysts at Moody's. The notion that the countries in the core of the eurozone, not just those in the region's periphery, face precarious fiscal and financial conditions put pressure on Europe's major bourses and further undermined the morning mood.

The S&P 500 was down about 1% within the first 30 minutes of trade, but it was able to bring buyers back in by holding steady at its 50-day exponential moving average.

Financials also offered leadership. The sector's refusal to turn negative in conjunction with the broad market's early dive convinced many that the sector's strength was sustainable, prompting many to push back into the space. Financials finished the session with a 5% gain.

Bank of America (BAC 6.64, +0.61) was one of the strongest performers. Not only did the stock boast the most robust share volume on the Big Board, but it also swung to a 10% gain. The move made for the stock's best one-day bounce in almost two months. The stock's surge came even though the company's latest quarterly report was muddled with numerous items. Even Goldman Sachs (GS 102.25, +5.35) staged an enviable gain, although the company reported a loss that was worse than what most of Wall Street had expected.

While financials offered leadership, the broad market got an additional boost amid news that leaders from France and Germany agreed to balloon the region's rescue fund to 2 trillion euros, although specifics continue to elude the leaders. Some doubt was cast on the report shortly before the close, causing stocks to surrender a portion of their gains.

The broad market's late bounce failed to carry shares of IBM (IBM 178.90, -7.69) to higher ground. The stock's loss came in the face of an upside earnings surprise and strong forecast. Fellow large-cap tech plays like Intel (INTC 23.40, +0.12) and Apple (AAPL 422.24, +2.25) stayed out of the red, but also lagged ahead of their latest reports.

Not to be ignored, Dow components Johnson & Johnson (JNJ 64.42, +0.63) and Coca-Cola (KO 66.74, -0.26) both bested bottom line expectations, but only JNJ shares were bid higher at the end of the day.

No sector logged a loss, but defensive-oriented issues like utilities, telecom, consumer staples, and health care were the only groups that failed to generate gains greater than 1%. Such relative weakness came as market participants showed an increased appetite for risk.

Advancing Sectors: Financials +5.0%, Energy +3.0%, Industrials +2.9%, Materials +2.4%, Consumer Discretionary +1.8%, Tech +1.0%, Health Care +0.8%, Consumer Staples +0.8%, Telecom +0.8%, Utilities +0.7%
Declining Sectors: (None)

Source: Briefing

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