Flat to weak start after Tuesday’s big collapse
U.S. stocks are expected to open flat to slightly lower as the market takes a “breather” from the big slide Tuesday to further digest the bank rescue plan and the remaining debate on the stimulus plan. Markets overseas were lower, likely catching up with some of the rout from U.S. equities. The Dow was called 5 points lower, while the Russell 2000 (NYSE:IWM) was seen slightly lower, near 445.00.
In Europe, the stock market was off about 1% heading toward the U.S. open; meanwhile, over in Asia, equities were down about 1.5%. Carmaker stocks were off in Europe, but losses in Asia were limited by gains for steelmaker and mining shares.
Here in the U.S., Research in Motion Ltd. (Nasdaq:RIMM) projected an outlook that was less rosy than investors hoped for, which could pull down the maker of Blackberry gadgets and weigh on tech stocks in general.
The MBA Mortgage Application Index fell 24.5% today despite a mild dip on fixed rate mortgages, which suggests that the housing market is still struggling mightily.
Once again today, investors will focus much of their attention on Washington, with hearings on the TARP, the debate on the stimulus and hope from the market for more details about the bank rescue plan.
The chart picture for small caps obviously deteriorated Tuesday, falling hard off the resistance ceiling approaching 474. Short-term intraday momentum readings are a little oversold coming into the session, which could help stabilize things early. Support comes in at 443.50, then at 437.50, while resistance comes in at 454 and 461.
