NASDAQ Stock Market

MARKET INDICES

NASDAQ Volume: 2,039,072,504 Today's Market Internals

NASDAQ1807.72-0.34 0.02%

NASDAQ 1001453.80-2.09 0.14%

NASDAQ 100 PMI1457.201.31 0.09%

NASDAQ 100 AHI1455.421.62 0.11%

DJIA8555.6058.42 0.69%

S&P 500918.377.66 0.84%

Russell 2000509.482.45 0.48%

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The stock market slipped in the first few minutes of trading, but was able to recover and log its best single-session advance by percent in two weeks. The advance was broad-based as six of the 10 major sectors in the S&P 500 posted a gain.

There wasn't any individual leader behind the move. Instead, health care (+2.2%), financials (+2.5%), utilities (+2.3%), and consumer staples stocks (+1.9%) all made impressive gains.

Health care stocks outperformed the broader market for the third straight session. The latest advance came via support from managed care (+6.2%) and healthcare facilities (+3.9%) amid an increased possibility that healthcare reform is going to be costlier and less expansive than expected.

The financial sector was helped by regional banks (+3.2%), which snapped back from the prior session's marked decline, and consumer finance stocks (+1.0%), which followed the lead of Discover Financial (DFS 9.28, +0.37). Discover issued a pleasing quarterly report and had a relatively encouraging conference call, during which the company stated it will repay its TARP funds when it is prudent to do so.

Amid ongoing chatter regarding its intended offer for NRG Energy (NRG 23.81, +1.06) and recent efforts to restructure its executive lineup and reduce costs, Exelon (EXC 50.42, +1.99) was a leader among utilities.

Consumer staples stocks were led by J.M. Smucker (SJM 47.88, +4.24), which posted better-than-expected quarterly earnings and raised its guidance.

Retailers traded with weakness for the entire session and finished 1.3% lower. Semiconductor stocks also lagged, leading the Semiconductor Index to a 1.8% loss. Weakness among semiconductors weighed on tech stocks (-0.5%) and caused the Nasdaq to underperform the other headline indices.

Trading volume in the broader market was exceptionally low this session. Hardly 1 billion shares exchanged hands on the NYSE this session. Trading volume has averaged 1.5 billion shares during the course of the last 50 sessions.

Nonetheless, this session's solid, broad-based gains came on the back of the latest jobless claims report, which indicated that 608,000 initial claims were filed for the week ending June 13. Continuing claims came in at 6.69 million. Initial claims were in-line with expectations and continue to trend lower, but continuing claims made a surprise pullback from record highs. However, both numbers remain at disconcerting levels.

In other economic news, the Philadelphia Fed Index for June came in with a less dismal-than-expected reading and leading economic indicators for May increased slightly more than expected.

Treasuries were knocked sharply lower after the Treasury Department announced a series of auctions for next week. The auction will carry amounts that exceed what was expected, which pressured the benchmark 10-year Note and sent its yield up above 3.8%.

Treasury Secretary Geithner provided testimony to Congress about financial regulatory reform. His comments didn't have any meaningful impact on trading.

Composite Index:Technical Analysis

As indicated by A, the KLCI fall below the 14 and 21-day EMA, while still holding above the 31-day EMA. This suggests that the KLCI is having its technical correction.
With the KLCI remains below the Bollinger Middle Band, the immediate outlook is now negative biased. Currently, the Bollinger Bands Width is no longer contracting. If the Bollinger Bands Width should expand with the KLCI below the Bollinger Middle Band, more downside risk is expected for the KLCI. Nevertheless, the important support level for the KLCI is at 1000 point while the immediate resistance is at the Bollinger Middle Band.

As indicated by B, total market volume increased 27.5%, but still below the 40-day VMA level. Despite the increased of volume on Thursday, the KLCI ended lower. Therefore, the increased of volume actually implied an increased of selling pressure. If the KLCI should continue to fall with high volume, it would further dampen the market sentiment.

As circled at C, the Stochastic breaks below 30%, entering the short term bearish region. Provided that the Stochastic is still below 30%, the market movement for the short term is expected to be bearish biased, all until the Stochastic should break above 30% level.

On Thursday, the KLCI had its sharpest correction since the uptrend in March, 2009, with 723 counters ended lower, the most losers since 10th of March, 2008. Nevertheless, with the Stochastic getting near 0%, the KLCI is likely to be over-sold, and a technical rebound is likely. In order for the KLCI to resume its uptrend, it must break above the Bollinger Middle Band and volume has to return to above the 40-day VMA level, or else, the bearish biased movement for the KLCI is expected to continue.