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The Smallcap Newsletter QualityStocks Report 5/11/07
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With a market increasingly sensitive to weak economic data, now that earnings season is all but over, investors found a slew of reasons Thursday to suggest stocks are overbought at current levels
Yesterday, the S&P 500 finished within 1% of its March 2000 record and the Dow closed at an all-time high for the 21st time this year. Today, the S&P 500 shaved 1.4% off its 6.6% year-to-date advance
The Dow posted its first triple-digit decline since the day (March 13) this seven-week rally got underway. All three major averages closed near session lows, suggesting the likelihood of some carry-over weakness tomorrow morning, especially given the release of even more key economic data.
Setting the bearish tone for trading today was a plethora of disappointing same-store sales figures. April comps were widely anticipated to be weak, given poor weather, rising gas prices, and an earlier Easter; but no one anticipated it would be the worst April on record.
According to the UBS-International Council of Shopping Centers, overall April sales fell 2.3%, the biggest drop since the index began tracking the data.
Just a day removed from the Fed reiterating its continued concerns about inflation risks, a larger than expected 1.3% rise in import prices last month gave sellers another excuse to question current valuations.
Throw in a wider than expected trade deficit and a lack of the very deal-making news that has provided a substantial floor of support for stocks of late and today's pullback wasn't much of a surprise. We continue to believe there is no reason for the stock market to have rallied so strongly since the beginning of the year based on deteriorating fundamentals.
Technology was also in focus Wednesday, but initially for negative reasons. Cisco Systems a suggested holding in the Briefing.com Active Portfolio, beat analysts' forecasts Tuesday night; but its Q4 sales guidance left the market wanting more.
All 10 economic sectors not only closed lower, but all of them were down at least 1.0% each. Energy (-2.0%) turned in the day's worst performance despite a modest rebound in crude oil prices. It is worth noting, though, that Energy has also been the best performing S&P sector (+15.3%) since stocks bottomed in mid March.
And now for our Small Cap News brought to you by Rancher Energy Corp., RNCH
Rancher Energy Corp., RNCH engages in the development, production, and marketing of oil and gas in
Left Behind Games Inc. shares got a boost yesterday, and today the company plans to expand distribution through direct to store relationships with approximately 250 stores in the inspirational marketplace. The company also announced plans this week to introduce LEFT BEHIND: Eternal Forces to the Asian online gaming market.
Forces puts players in a post-apocalyptic world in the ultimate battle of good versus evil, based on the popular "Left Behind" book series, which has sold more than 63 million copies worldwide.
Leading Brands, Inc. announced this week that it was featured in a story in The Vancouver Sun newspaper front page newspaper, touting the fact that TrueBlue(r) blueberry juice is being given by radiology experts at the renowned
The company also recently announced that it has been appointed as the exclusive, master distributor of BooKoo energy drinks throughout
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