Friday March 6, 2009
Navivest

The stock market ended another disastrous week mixed, with the Dow and the S&P 500 managing to eek out gains for the day, of 0.49% and 0.12% respectively. NASDAQ closed the Friday session with a small loss of 0.44%.

From the Friday February 27 close, the Dow went from 7062.93 to 6626.94, for a loss of 438.99 points or 6.21%, the NASDAQ went from 1377.87 to 1293.85 for a point loss of 84.02 or 6%, while the S&P 500 went from 735.09 to 683.38 for a loss of 51.71 or 7.03%.

The stock markets have been systematically violating key and psychological supports without any pause, which from a technical analysis standpoint, is very worrisome. However, whether such strong downside moves can continue unchecked is questionable, as the stock market cannot keep dropping 5% or more every week.

At some point, there will be a floor and while a case can be made for lower stock prices and lower price multiples since corporate profits are falling, some of the component companies will soon be trading at prices way less than their underlying value.

The stock market actually moved to the upside at the open, after the Labor Department put out its Non-farm Payrolls report for February, which showed that the economy lost 651,000 jobs, sending the country’s unemployment rate to 8.1%. Bad as the number was, it was just about right in line with forecasts, so it was seen as good news by traders, who started buying.

That proved to be a bear market trap for those who might have been convinced that stocks were oversold and we were going to be getting a rally on the day.

After hitting the day’s high of 6,776.44 around 10 am, the Dow promptly turned around and trended downwards until about 3:15 pm.

IBM (IBM) led the way down, and was the biggest point loser, with a $1.67 drop, for a loss of 1.91%, closing at $86.23. The stock traded as low as $83.81 during the day.

Including IBM, there were fourteen out of the thirty stocks in the Dow Jones Industrial Average that closed in the red on Friday, but IBM was the only one that lost more than a point.

Walmart (WMT), which interestingly enough, gapped up at the open to start the day at $50.15, the high for the day, from Thursday’s close of $49.75 was the next biggest point loser, shedding $0.84 to close at $48.91. JP Morgan Chase (JPM) $15.93, 3M (MMM) $41.83 and Verizon (VZ) $27.28, followed with losses of $0.67, $0.68, $0.63 respectively.

General Motors (GM) was the biggest percentage loser after the stock dropped 22% on rumors that bankruptcy is imminent. Then again, the stock is trading under $2 and only needed to lose $0.41 for that 22% decline.

General Electric (GE) climbed $0.40 to close at $7.06, making it the biggest Dow percentage gainer, with a 6.01% gain on the day.

Tags: stock market stocks dow jones nasdaq ibm walmart