Traders-Blog.com

Stocks fell today, save for pockets of strength among technology shares, as investors consolidated strong gains seen last week after the Federal Reserve’s hefty rate cut. Investors struggled to remain positive ahead of a string of key economic reports due later in the week.

The Dow Jones industrial average closed down 61.13 or 0.44% to 13,759.06, the broader S&P 500 closed down 8.02 or 0.53% to 1,517.73, and the tech-fueled Nasdaq composite closed down 3.27 or 0.12% to 2,667.95.

Market breadth was negative. On the New York Stock Exchange, losers beat winners 5 to 3 on volume of 1.3 billion shares. On the Nasdaq, decliners topped advancers 9 to 5 as 1.9 billion shares changed hands.

While the Feds have put investors at ease, but it appears to be a temporary fix. Investors have been worried about sub-prime mortgages, housing and the economy as an overall.

Investors will be looking to the economic news later this week for short-term direction. Reports are due on consumer confidence, housing, durable goods orders and personal income and spending. The remarks by Federal Reserve Chairman Ben Bernanke at an education summit in Washington, did not address current monetary policy or the central bank’s economic outlook.

Shares of GM closed down $0.20 or 0.57% to $34.74, after the United Auto Workers’ union launched a nationwide strike against the company, saying key issues in contract talks could not be resolved. However, union leaders said they were willing to resume talks.

Shares of AMR slumped $3.49 or 14.39% to $20.77, after warning that third-quarter profit results won’t meet estimates. This resulted in the stock dragging on other airline stocks as well.

Stock of Standard Pacific closed down $1.05 or 12.96% to $7.05, after the homebuilder said it would stop paying a quarterly dividend and would instead use the money to pay down debt.

Shares of Sonus Pharmaceuticals closed down $3.65 or 83.85% to $0.70, after the company said a late-stage trial of its breast cancer treatment failed and it was giving up development of the drug.

Stock of Microsoft closed up $0.43 or 1.5% to $29.08, r ahead of the launch of its highly-anticipated Halo 3 videogame at midnight. It is also considering investing $300 million to $500 million for a 5% stake in Facebook.

Shares of EMC closed up $1.48 or 7.78% to $20.51, after Citigroup upgraded the computer data storage maker to “buy” from “hold.” Citigroup pointed to recent strong earnings and the outlook for VMware, the maker of virtualization software that EMC spun off last month but still holds a big stake in.

U.S. light crude oil for November delivery lost 67 cents to $80.95 a barrel on the New York Mercantile Exchange.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter