Retail sales came in negative and below expectations and that gave the market a reason to sell off. Weakness in financials did not help and this means the Dow Jones Index has dropped in four of the last six sessions.
The 1.1% fall in retail sales reminds everyone that it’s still “the economy stupid”, as Bill Clinton once declared.
Goldman Sachs plans to repay $5 billion in TARP money, but the market was suspicious of the banks despite the belief that Citigroup will report better than expected later in the week.
By the way, Intel beat forecasts in a report delivered after hours but the share price still went down. Analysts say the company’s guidance was not clear but my feeling is that the bears want to test this big rally and some profit-takers might want to buy the dips in what they see as the bottoming process.
I think this retail number will work against company reports, which are coming in better than expected, to slow up this rally. As I said a few weeks back, we’re not in testing territory but happily, good news is still holding its own against bad. It was the other way around in March when the S&P 500 went down to 666. We’re now 175 points from there — let’s hope that’s enough.
The Oz dollar has again followed Wall Street dropping to 72.37 US cents.
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