Asian markets rallied overnight, following the strong showing on Wall St. yesterday. European markets were also higher this morning on a report from the ECB that bank borrowing needs are being adequately met.
But following ORCL's disappointing quarterly report, tech shares are down heavily this morning and that is weighing on the overall market. ORCL's stock is getting hit and hurting anything that is related to CRM, cloud computing, etc. The Nasdaq 100 is down -2.0% early, while the S&P 500 is off -0.65%.
Among sectors, tech is down the most, while defensive areas like consumer staples and utilities are bucking the weakness so far and trading in positive territory. If will be interesting to see if dip buyers show up today in tech stocks.
On the plus side, Nike (NKE) had a solid quarterly report and its stocks is up nicely today, almost back to 52-week highs.
The dollar is higher vs. the euro today, which is weighing on some commodities. Oil prices are higher near $98.38, but gold is down to $1615 and silver and copper prices are lower as well.
The 10-year yield is adding a bit to get to 1.92%; and although the market is down this morning, the VIX is also nearly 3% lower to 22.55. I still think this continues to bode well for the bulls into year-end.
Trading comment: Tech stocks are getting destroyed this morning if they are related to cloud computing, etc. Stocks like AAPL and GOOG are holding up better. It will be interesting to see which stocks bounce back first. But those that don't bounce and continue to act as laggards should be avoided for now as year-end selling of losers could continue to weigh on them. As for the SPX, it has pulled back exactly to its 50-day average, which is acting as support so far. I think that is important. A 2nd close above the 50-day would be a bullish sign, and supportive of another move higher for the senior index. I would also like to see volume on today's pullback come in lighter than yesterday's rally. So let's watch for that.
long AAPL, GOOG
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