Tuesday was definitely a day for the bears, sending the bulls running for cover, as the major indexes continued to stay in the red. This dramatic drop in all the major indexes stems basically from the “fear” that more countries in the European Union will tumble due to debt. Even though a rescue package is in place for Greece, there are fears that stem from the shaky disposition of countries like Spain and Portugal ….and will they follow the path of Greece eventually?
The CBOE Market Volatility Index (VIX) –which is more commonly known as the "fear index" – had a field day, shooting up by more than 18% due to the investor panic.
The Dow Jones Industrial Average (DJIA – 10,926.77) had a miserable earnings day, with a massive loss of 225.1 points, or 2%. The S&P 500 Index (SPX – 1,173.60) also had a poor day to send it backwards by 28.7 points, or 2.4%, whilst the Nasdaq Composite (COMP – 2,424.25) suffered the worst of the three major indexes, to end the day with a loss of 74.5 points, or 3%.
There have been some positive notes today particularly from the earnings arena. Several companies have presented earnings reports that exceeded the analysts’ expectations. These are:-
• Pfizer Inc. (PFE)
• Merck & Co.'s (MRK)
• Beazer Homes USA (BZH)
• Genco Shipping & Trading GNK)
Merck & Co. (MRK) and Pfizer Inc. (PF) were two of only three that remained in positive territory during the Dow plunge. Wal-Mart Stores (WMT) was the other company to remain in the black.
Archer Daniels Midland (ADM) presented a negative quarterly earnings report for the day which surprised analysts.
Notes of Interest….
• The Dow Jones Industrial Average (DJIA) finished the day with its worst single-session drop in three months. One bright point is that the Dow is still supported by its 10-week moving average.
• The S&P 500 Index (SPX) dropped below its psychological level of 1,200 again.
• The Nasdaq Composite (COMP) has still not been able to reclaim its 2,500 level again and is slipping further behind.
• The U.S. dollar continues to climb as the euro plummets due to the EU concerns. Combine this with an industry report indicating that domestic gasoline demand fell 2.3% last week sent crude oil for June delivery backwards by $3.45, or 4%, to settle at $82.74 per barrel.
• June-dated gold futures finished down by $14.10, or 1.2%, to sit at $1,169.20 an ounce. Investors have abandoned this as a safe-haven in favor of Treasury Notes.
Salesforce.com, Inc. (CRM)
The Company provides customer relationship management service to businesses of all sizes and industries worldwide and provides a technology platform for customers and developers to build and run applications.
Goldman Sachs raised the ratings for Salesforce.com, Inc. (CRM) from "neutral" to "buy" and hiked its price target from $60 to $102.
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