Bad news bears to romp down Wall Street today

Big misses by Google, GE, MickeyD's, and Microsoft help spread the gloom.

WASHINGTON, October 19, 2012 – Adding to the nasty upward revision of unemployment claims numbers yesterday, blue chip bellwethers GE and McDonald’s have announced disappointing quarterly reports. But these just added on to the nasty jam pile caused by mutual fund and hedge fund darling Google’s seriously bad numbers yesterday, a matter made worse by the inept early release of these dismal figures by Google’s online and dead-tree printer R. R. Donnelley. That final indignity just made a bad report seem worse.

Yesterday’s doom and gloom will carry through this morning, with Dow futures sharply down a whopping 39 points just before the open, with the S&P 500 and the NASDAQ also down. (UPDATE: The Dow is down nearly 70 points at 9:40 a.m. EDT.) Adding to the pessimism, mighty Apple lost another round to Samsung yesterday in European courts—no surprise there, as Euro-courts tend to despise big American tech like Microsoft and Apple, cutting these evil capitalists off at the knees whenever they have the opportunity.

The court loss won’t really cost Apple big time. But, combined with the big earnings miss by Google, plus, mirabile dictu, bad numbers reported by Microsoft, this news really knocked the stuffing out of the entire tech sector. That’s disappointing, because fall and early winter is traditionally when you make the big money in tech. Apparently, not this year.

On the good news side of the ledger, banks continue to slowly improve, in spite of starting adjustments to the way they do business, courtesy of the draconian Basel II standards which, last time the Maven looked, were still not entirely complete, just like the never-ending PIIGS bailouts and non-bailouts and modified, limited bailouts. (Hat tips to the late Bob Haldemann, John Ehrlichman, and Ron Ziegler.)

Anyhow, according to Dave Fry, “there has never been a bull market in history without financials either in the mix or leading. Since the 2009 low, financials rallied smartly but over the last 2 years they’ve been range bound as doubts going forward have vexed investors. Now they seem at another important resistance area with a chance to move forward—a chance.”

Yep, a chance. But we’ll take it, at least as some insurance against all these negative tech numbers—currently being attributed to the potential tectonic shift in personal computing that was launched, arguably, by smartphones and tablet computers. But hey, that’s classic capitalism for you. Something’s always getting destroyed or left behind. But then again, something new is always rising from the ashes, even in the current tech Götterdämmerung.

Oh, yeah, it’s also options expiration Friday today. Heck, maybe the best thing to do is wait until some of the dust settles this morning, buy a couple of banks that haven’t been goosed too high yet—New York Bank (NYB) and First Niagara (FNFG) come to mind—and then go treasure hunting at Costco, whose stock we love except that it’s overpriced right now.

Have fun this weekend, and if you’re lucky, enjoy the fall colors, too. Like bull runs these days, nature’s most magnificent plumage display never lasts too long.

Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate. He disposed of a positions today in DGP, but continues to own a position in IAU.

Positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.

Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.

References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.

Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.

Follow Terry on Twitter @terryp17


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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  



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