Midday Update: Stocks Lower So Far In Light Trading

The market is slightly lower so far today, with not much in the way of market moving news. The SPX continues to trade within that 925-955 range that has been in place for the last 10 trading sessions. Yesterday we had a chance to breakout to the upside, but there was not enough strength behind the move.

Biotechs and healthcare are bucking the weakness and leading the market so far, while energy and materials are the biggest laggards. BofA (+5.9%) is one standout stock in the financial sector, and AMZN (-3.6%) and RIMM (-3.2%) standout among tech stocks.

Asian markets were higher overnight, but the emerging market etfs are trading lower today; the dollar is higher again, which is weighing on gold and commodity prices; the 10-year yield is making a nice move lower to 3.76%; and the VIX is also lower, down to 27.90.

Here is a summary to the day's action so far:

• At 12:30 PM Eastern, the Dow was down 0.1%, the S&P 500 was down 0.5%, and the Nasdaq was down 1.3%. The market remains pre-occupied with oil prices and bond yields.
• A drop in yields for 10-year Treasury notes gave stocks some support. The yield on the 10-year note fell below 3.8%, easing concerns about interest rates.
• Oil prices were down slightly but were still trading near $72 per barrel.
• Technology companies are weak. National Semiconductor declined 1.03 to 13.44. The company’s results in the latest quarter were better than expected, but its chief executive said he sees no signs of a rebound yet.
• BlackRock fell 11.08 to 171.52 after agreeing to buy Barclays’ investment unit for $13.5 billion. Barclays was down 77 cents at 19.13.
• Companies that manufacture swine flu vaccine are higher after the World Health Organization declared a pandemic this week. Novartis said it’s ahead of schedule in its production of a flu vaccine, and shares gained 1.66 at 41.95.
• In economic news, the University of Michigan’s sentiment index rose in June for the fourth straight month, but was still slightly below expectations.
• May import prices rose for the third straight month, due mostly to oil, but import prices overall are still down 17.6% compared to a year ago.
• The NYSE was 8-5 negative on issues and 2-1 negative on volume.
• The Nasdaq was 2-1 negative on issues, 5-2 negative on volume.

Trading comment: Yesterday I stepped up and bought the financial etf (XLF), anticipating a break above the 200-day. I may have been early in anticipating the move, but it seems to be holding in well today. The market is still hovering in overbought territory, so I will likely hold off on any more buys until next week.

long XLF