US Equities rallied back from a nervous opening as concerns regarding earnings took hold of the markets early in a light volume session due to the Euro Zone remaining closed for an extended Easter Break. Concerns appeared to abated after the Federal Reserve enacted its largest purchase so far of Treasury debt in order to support the environment for consumer and business lending. A renewed sense of effort to meet the challenge of the global economic crisis spurred buyer to cover short positions in many of the financial stocks. Citigroup and Bank of America both staged double digit rallies from early weakness as the renewed sense of optimism for the sector initiated last week offered speculation that perhaps the earnings picture expected from these institutions will not be as dismal as previously expected. Goldman Sachs reported better than expected earnings after the market closed. Losses on Real Estate holdings and fixed assets were overshadowed by gains derived from the companies trading operations. The company also announced it was preparing a $5 billion offering of stock for the purpose of paying back the $10 billion borrowed from the TARP programs.

 

The major market indices ended the session mixed. S&P futures posted a small gain while Dow & NASDAQ futures ended slightly down. General Motors fell dramatically in the session after the government ordered the failing automaker to prepare a bankruptcy plan by June 1st. The order essentially negates any hope of the company renegotiating its financial burdens outside of a bankruptcy scenario. Energy Stocks fell early after Chevron posted less than expected profits and the IEA reported a larger than expected drop in global demand for energy consumption in 2009. This fueled a larger drop than the normal pullback expected due to fear premium coming out of the market after a long weekend.

 

Technically, very little changed regarding the outlook for June Dow Futures.  Markets continue in a channel skirting near the high side of daily RSI. Upward Resistance target remains at 8170 while support levels set up at 7740 and 7620.

 

EQUITY RANGES

OPEN

HIGH

LOW

CLOSE

CHANGE

DJM9 (JUNE DOW)

7945

8060

7911

7995

-22

SPM9 (JUNE  S&P)

845.00

861.30

841.70

854.00

+1.40

NDM9 (JUNE NASDAQ)

1334.00

1344.00

1321.00

1332.00

-4.00