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Stocks Close Green Month in the Red: Dave's Daily

Stocks in this article: XLV UPS IYT ITW XLI ADM XLP AMZN FDN

Stocks are closing the month with another reversal day well off the lows. Like Monday, afternoon dip buyers aren't taking any selling lying down. Overall the month was one of the best Januarys on record returning 3% to 8%.

Market moving news on Tuesday featured news from the eurozone, economic data in the U.S. and earnings.

From the eurozone, we learned that the EU has approved on a fiscal and budget discipline mechanism going forward. All but two countries (Czechoslovakia and Britain) approved the new treaty. Also the ESM (European Stability Mechanism) also known as "money printing" and "bailouts" will be launched on July 1 st one year earlier. Understandably one might take a "trust but verify" approach since many previous agreements have come to nothing. Nevertheless, this so-called treaty took European stocks higher. This is featured in the "Overseas Sectors & ETFs" section of this commentary with EFA, EZU, EWU, EWG and others.

Earnings news from U.S. companies was just okay but guidance was weaker overall including Exxon Mobil (XOM), Pfizer (PFE), Untied Parcel (UPS), Illinois Tool Works (ITW) and Archer Daniels Midland (ADM). After the close, Amazon (AMZN), and liked to ETF (FDN) reported a disappointing report which sent shares sharply lower. All these companies are linked to charts and ETFs within "U.S. Sector, Stocks & Bond ETFs" section below which include matching ETFs (XLE, XLV, IYT and XLY).

Economic data missed estimates including: Chicago PMI; 60 vs 63; Consumer Confidence 61 vs 68 expected; and, Case Shiller Home Prices down 1.3% taking prices back to 2003 levels.

Frankly there are only a few groups trading these markets: HFTs, Hedge Funds, overseas investors and what's left of reinvestment from captive assets domestically. That's about it. Markets remain overbought frankly. And, the old saying, "as goes January, so goes the year" will be much promoted.

Volume remains light even by the now descending three month average for bellwether SPY (190M shares) and breadth per the WSJ was once again mixed.

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SPY - The SPDR® S&P 500® ETF is a fund that, before expenses, generally corresponds to the price and yield performance of the S&P 500 Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
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IWM - The iShares Russell 2000 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the small capitalization sector of the U.S. equity market as represented by the Russell 2000 Index. The index represents the approximately 2,000 smallest companies in the Russell 3000 Index.
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QQQ - is an exchange-traded fund based on the Nasdaq-100 Index ®. The Fund will, under most circumstances, consists of all of stocks in the Index. The Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The portfolio is rebalanced quarterly and reconstituted annually. See more details

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