Markets pause for breath after 2 day rally

Tags: NSM, Barack Obama, TXN, FDX
9 Dec 2:45am
Posted by ChrisKrasowski
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Spurred by low valuations, the prospect of the Auto bailout culmination and President-elect Barack Obama's massive infrastructure plan, stocks finished last week on a high and continued that trend Monday, tacking on about 700 points for the Dow during the 2 day span.

A new wave of profit warnings and profitability downgrades have turned Tuesday into gut-check trader's day with the Dow hovering lower by about 250 points into the close. FedEx (FDX) plunged today after its forecasts took a hit due to current and forward looking economic troubles. FedEX shares were off about 14% after citing "significantly weaker" economics and talking about profit expectations that were lower than Wall Street was anticipating.

National Semiconductor (NSM) predicted a quarterly revenue drop of 30% and Texas Instruments (TXN) followed up by reducing internal quarterly estimates for Revenue and Profit. NSM and TXN were able to shake off the negativity and closed higher by 13% and 4% respectively.

This certainly goes to show that even though recovery is on the radar and the minds of traders, the valuation game will still be played on a day to day basis and stocks, which appear cheap, continue to downgrade their own profitability.

Disclosure: Author holds no position in above mentioned companies

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ChrisKrasowski

WC Power Tech Fund founder. Chris sets out to prove that the new generation of investor can emerge from nontraditional circumstances. An engineering graduate from a Canadian University, Chris developed his passion for investing and the markets at an early age and personally owned his first stock at the age of 16. Now 24, with work experiences in the banking and investment banking industries in front of him and behind him, Chris built a personal trading account into the unofficial WC Power Tech Fund. The fund's official blog gives Chris the opportunity to write about investment topics of all shapes and sizes giving insights, opinions and market commentary to seasoned and new investors alike. Visit: http://wcpowertechfund.blogspot.com

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