S&P 500 = 1254.05
Posted by Eddy Elfenbein on August 2nd, 2011 at 5:14 pm

There’s no other way to say it — today was a wipe-out for stocks. The S&P 500 plunged 32.89 points to close at 1,254.05.

That’s a loss of 2.56% which is the index’s worst loss since August 11th of last year. The market has lost all of its gain for the year. The S&P 500 is currently 0.29% lower than where it was on December 31st. The market has now fallen for seven sessions in a row.

Once again, it was the cyclicals that bore most of the pain. The Morgan Stanley Cyclicals Index (^CYC) dropped by 3.72%. The CYC is now below 1,000 and the index has shed 12.8% since July 7th.

Despite the new loss among cyclicals, that group has been suffering for a while. The losses today seemed fairly evenly distributed. I didn’t see many stocks down more than 5%. Trading volume on the Nasdaq ran 17-to-1 negative.

So what did well? That’s easy. Gold, for one. The yellow metal jumped to $1,644.50 an ounce. It wasn’t that long ago that the S&P 500 and gold were tracking each other. Gold is up even more after hours.

Bonds also had a field day. The five-year Treasury yield dropped to 1.23% and the 10-year yield is down to 2.62%. Both are the lowest readings since November.

The 30-year yield is down to 3.92% which is the lowest yield since last October.

Send Me a Question!
Posted by Eddy Elfenbein on August 2nd, 2011 at 11:54 am

Calling all readers: I want to try a Q&A post.

Although this blog doesn’t have comments, I try to respond to all the emails I get. (I apologize that I can’t answer them all.)

Sometime in the next week, I hope to post a round-up of the best email questions. Feel free to send me an email about any investing topic or stocks on the Buy List. (Don’t worry, I won’t post your name.)

I’ll try to respond to everyone, but I may not be able to. You can email me at eddy@crossingwallstreet.com.

Q2 Earnings Summary for the S&P 500
Posted by Eddy Elfenbein on August 2nd, 2011 at 11:40 am

According to the latest numbers from Bloomberg, 360 of the 500 companies have reported. Earnings are up 18.5% and are tracking to hit $24.89 which would be an all-time record.

Update Q2 Buy List Earnings Calendar
Posted by Eddy Elfenbein on August 2nd, 2011 at 10:25 am

Becton Dickinson Beats and Guides Higher
Posted by Eddy Elfenbein on August 2nd, 2011 at 10:17 am

Great earnings from Becton Dickinson ($BDX). The company reported adjusted earnings of $1.51 per share which was eight cents more than Wall Street was expecting. Becton also raised its full-year EPS guidance range from $5.55 to $5.65, to $5.65 to $5.78. Wall Street’s estimate was $5.62 per share.

The company earned $343 million, or $1.53 a share, in the second quarter, higher than year-earlier earnings of $306.9 million, or $1.29 a share.

Income from continuing operations in the latest quarter was $1.51 a share; analysts surveyed by Thomson Reuters were expecting the company to earn $1.43 a share.

Revenue rose 10% to $2.01 billion, above analysts’ estimates of $1.99 billion.

“Gross margin expansion reflecting favorable product mix has offset some of the headwinds we have been facing as a result of a challenging macroeconomic environment and increased raw material costs,” said Chairman and CEO Edward Ludwig, in a statement Tuesday.

Becton Dickinson said 2011 revenue is expected to be at the higher end of its previously estimated range of 5% to 6% from fiscal 2010 because of the effects of a favorable currency.

S&P 500 Breaks 200-DMA
Posted by Eddy Elfenbein on August 2nd, 2011 at 10:01 am

After bouncing off the 200-day moving average twice in June, the index has now broken below it.

It’s interesting that the market is slightly higher than the June bounces but it’s the 200-DMA that’s come up.

Morning News: August 2, 2011
Posted by Eddy Elfenbein on August 2nd, 2011 at 8:24 am

Pearls, Finer but Still Cheap, Flow From China

India’s Widening Iron Ore Scandal Hurts Stocks

Italy Under Fire in Widening Euro Debt Crisis

Global Growth, Debt Fears Grip Currency Markets

Debt Deal Puts U.S. on Austerity Path as Economy Falters

U.S. Stock Futures Down as Economic Fears Remain

Manufacturing Growth Hits Lowest Level in 2 Years

Ford to Recall 1.1 Million Pickups for Gas Tank Problem

Toyota Raises Profit Outlook on Quake Recovery as Hyundai Gains

Pfizer’s Adjusted Profit Beats Estimates

General Growth Quarterly FFO Declines After Lower Lease Termination Income

British Banking Giant Barclays Reports Profit Plunge and Job Cuts

Japanese Brewer Kirin Pays $2.5 Billion to Buy Stake in Brazil’s Schincariol

Fresenius to Buy U.S. Dialysis Chains

Brian Shannon: Stock Trading Ideas for 8/2/11

Jeff Miller: Weighing the Week Ahead: Looking Past the Debt Ceiling Issue

Be sure to follow me on Twitter.

The Lost Decade
Posted by Eddy Elfenbein on August 1st, 2011 at 12:58 pm

Here’s a look at the total return of the S&P 500 adjusted for inflation. We’re still below the peaks from 2000 and 2007. In fact, we’re less than 5% higher than where we were 13 years ago.

Note that the July CPI report isn’t out yet so I assumed 0% inflation for the last data point.

July ISM = 50.9
Posted by Eddy Elfenbein on August 1st, 2011 at 10:30 am

The July ISM index dropped to 50.9. The index is down nearly 10 points in the last three months.

Whenever the ISM drops to 44.4 or less, the odds of a recession jump much higher. We’re still above the danger zone. The ISM has fallen between 50.0 and 51.0 a total of 49 times. Only three of those readings come during official recessions.

Here’s a look at total months and months in a recession by different ISM readings:

During the 10-year expansion from April 1991 to March 2001, the ISM came in at today’s reading or less 46 times, yet none was a recession.

The First Day of the Month
Posted by Eddy Elfenbein on August 1st, 2011 at 10:03 am

The S&P 500 has risen on the first day of the month for 23 of the last 28 months.

Going back to November of 2009, more than half of the S&P 500’s gain has come on the first day of the month.

The market was up earlier today but we just slipped into the red.