Stocks Fall On Weak Data; Gap Rises After Earnings

By Scott Stoddard, Investor’s Business Daily

Stocks fell Thursday but ended off their lows, as investors weighed weak economic reports in the U.S. and Europe and escalating violence in the Middle East.

The Nasdaq lost 0.4%, while the Dow Jones industrial average and S&P 500 both dipped 0.2%. Volume fell 4% on the Nasdaq and 2% on the NYSE compared with Wednesday.

3D Systems (DDD) plunged 9% in strong volume, dipping below its 50-day line. It cleared a 44.90 cup buy point Nov. 1 in weak trade but has since reversed course and triggered the 8% sell rule.

The maker of machines used to make three-dimensional prototypes mainly for the medical, auto and aerospace industries boasts strong earnings and sales growth. However, the stock hasn’t been able to buck the market’s sell-off over the past week.

Miners were among the hardest-hit. Agnico Eagle Mines (AEM), which mines gold in the U.S., Canada, Mexico and Finland, dropped more than 5% in heavy turnover amid the yellow metal’s slide. The stock ended below its 50-day line for the first time since July.

Williams Sonoma (WSM), which operates home furnishing stores, also sliced through its 50-day line after falling more than 3% in huge volume. The stock is still 7% past a 40.86 buy point in a cup-without-handle base after having been up as much as 18%. Investors still owning the stock should make sure to get out with a profit.

Gap (GPS) fell 1% Thursday but was up in post-session trading after reporting that profit for the September-ended quarter rose a better-than-expected 40%. It was the biggest increase in nine quarters and followed a string of declines. The stock has been trading below its 50-day line for three weeks.

Elsewhere, Middleby (MIDD) rose almost 2% in more than double its average daily turnover. The maker of restaurant appliances hit a new high intraday before pulling back. It’s 3% past a 122.67 buy point and getting support at its 50-day line.

In economic news, European data showed that the 17-member euro area has slipped back into recession. Meanwhile, manufacturing in the New York and mid-Atlantic regions continued to shrink, while jobless claims rose more than expected last week in part due to Superstorm Sandy. Also, U.S. consumer prices edged up in line with expectations in October.

Also Thursday, a Hamas rocket killed three Israelis during a second day of fighting.

On Friday, medical stock Cyberonics (CYBX) and packaged food producer J.M. Smucker (SJM) report quarterly earnings, while the government releases industrial production figures for October.


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