10/22/2008 Market Rekap - Global Panic Selling Continues

Chart courtesy of http://finance.google.com
US stocks dived Wednesday on growing global recession fears and skidding oil prices, with the Dow industrials down more than 5.5 percent at the market close.

The Dow Jones Industrial Average dropped 509.83 points (5.64 percent) to 8,523.83 and the tech-heavy Nasdaq composite slid 80.93 points (4.77 percent) to 1,615.75.

The broad Standard & Poor's 500 index fell 57.53 points (6.02 percent) to 897.52, according to preliminary closing figures.

Traders work on the floor of the New York Stock Exchange. Panic-selling has returned to global stock markets with the leading Dow Jones industrial index shedding 5.6 percent and Japan's Nikkei index dropping seven percent in early trade, as fears of a global recession stalked investors.
Source: AFP - Copyright AFP 2008, AFP stories and photos shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium
Corporate profit forecasts, a jump in the dollar and falling commodity prices signaled investors are fearful that an economic slowdown will sweep the globe even if lending begins to approach more normal levels as credit markets ease.

The dollar hit multi year highs against several other major currencies, weighing on commodity prices. That hurt materials and energy companies, while the fall in oil gave a boost to airlines. Light, sweet crude fell $5.43 to $66.75 a barrel on the New York Mercantile Exchange, after falling as low as $66.20.

Gold fell sharply as the dollar rose. Gold for December delivery fell $32.80 to settle at $735.20 an ounce on the Nymex, after dipping to a 13-month low of $735.20 during the session. Silver and copper also fell. Technology shares fared better than the broader market following quarterly reports from Apple Inc. and Yahoo Inc.

While reduced strains in global credit markets have eased some investors' nervousness about the economy, market anxiety remains as hundreds of companies this week report third-quarter results and issue somewhat murky forecasts that are stirring unease about the economic bumps that may lay ahead.

Wachovia Corp., which is being bought by Wells Fargo & Co., reported that it swung to a huge loss in the third quarter by as much as $23.9 billion while the drugmaker Merck & Co. said its quarterly profit fell 28 percent and that it would cut more than 10 percent of its work force.

A man walks past an electric quotation board flashing the Nikkei key index of the Tokyo Stock Exchange in front of a securities company in Tokyo. Panic-selling has returned to global stock markets with the leading Dow Jones industrial index shedding 5.6 percent and Japan's Nikkei index dropping seven percent in early trade, as fears of a global recession stalked investors
Source: AFP - Copyright AFP 2008, AFP stories and photos shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium
In the next day, Japan's Nikkei stock index followed the trend on Thursday tumbling more than seven percent in early trade and hitting the lowest level in more than five years.

The Nikkei-225 lost 658.08 points, or 7.59 %, to 8,016.61, levels last seen in May 2003. Hong Kong's Hang Seng is declining 5.5%, China's Shanghai Composite index is giving away 2.6%, Australia's All Ordinaries index is shedding 4.1%, and South Korea's KOSPI is plunging 9.3%.

Trading on Brazil's stockmarket, the biggest in Latin America, was automatically suspended Wednesday when the main Bovespa index plunged more than 10 percent.

The stockmarket was suspended for 30 minutes at 19:17 GMT, the fifth time in three weeks that the automatic suspension has gone into effect.

Operations were to resume at 19:58 GMT from when a new limit of a 15 percent loss would be set for triggering an automatic suspension of the market, officials said.

Will market rebound tomorrow morning?

Here is the summary of Cobra's chart analysis :

Today a bad news is that SPX has reached the lowest close in 2008, another one is that the symmetrical triangle we talked about before has broken out at the down side. At the market close SPX went back to the triangle, which means it must go up tomorrow otherwise the Oct 10th low will be in danger. Will the market rise tomorrow? If the market is rational, the probability of bounce back is high.

NYSE

Issues Advancing chart is the only hope of bulls recently. NYADV has not shown a lower low so far, which is a characteristics of market bottom. Note the SPX close only chart at the bottom clearly shows that today is the lowest 2008 close.

Click to enlarge

Russell 3000 Dominant Price - Volume Relationships

The dominant price-volume relationships today are 1721 stocks price down volume up, which shows that the market is oversold and due for a rebound.

Click to enlarge

Related Posts :

1. 10/22/2008 Market opened by fears (Update 2)
2. 10/22/2008 - Upgrade & Downgrade (Update 1)
3. 10/21/2008 Market Recap - Lehman CDS Settlements & Dispointed Earnings
4. 10/21/2008 - Upgrade & Downgrade

Sources :

1. AOL Money & Finance: Stocks tumble on worries about earnings forecasts, October 22, 2008 18:35 EDT
2. Breitbart.com: Brazilian stock market suspended as index plunges, October 22, 2008 03:40 PM US/Eastern
3. Breitbart.com: US stocks plunge, Dow down more than 5.5 pct, October 22, 2008 04:10 PM US/Eastern
4. Breitbart.com: Panic-selling returns to world stock markets, Japan stocks drop 7 percent, October 22, 2008 09:28 PM US/Eastern
5. Cobra's Market View: 10/22/2008 Market Recap: Lowest Close 2008

Please Note!
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