Before the Open (Dec 9)

Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly down. Japan, India and Taiwan dropped more than 1%; Hong Kong, Singapore, Australia and Malaysia were also weak. Europe is currently mostly down. Greece and Austria are down about 3%, and France, Belgium, Sweden, Poland, Finland and Spain are down more than 1%. Futures here in the States point towards a down open for the cash market.
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The dollar is down. Oil and copper are up. Gold and silver are up. Bonds are up.
I’m liking the market less and less these days. And it’s not just because the indexes can’t seem to get much upside traction, it’s mostly because the internals have been weakening. The AD line, AD volume line, new highs, percentage of stocks above certain moving averages (and others) would not be supportive of a rally attempt right now.
Ideally, if the market traded in a range, the internals would quietly improve, suggesting internal strength that would support a leg up. This isn’t the current case. When the market moves up, it’s being pulled up by a small number of stocks (ergo, the strength isn’t broad-based).
Let’s not underestimate the market’s ability to do silly things that don’t make sense in the near term. But overall, if a rally attempt is made, we’ll need to see rapid, across-the-board improvement from the breadth indicators or else the move won’t have legs.
The Fed looms. We also need to ask ourselves what the odds are the market does something significant ahead of the Fed. More after the open.
Stock headlines from barchart.com…
Dow Chemical (DOW -2.17%) and DuPont (DD -0.75%) both rose more than 5% in pre-market trading after people with knowledge of the matter said the companies are in late-stage merger talks and a deal may be announced some time this week.
Costco (COST +1.05%) fell nearly 5% in pre-market trading after it reported Q1 EPS of $1.09, less than consensus of $1.17.
Noble Energy (NBL +0.40%) was rated a new ‘Overweight’ at JPMorgan Chase with a $42 price target.
Dreamworks Animation (DWA +0.20%) was rated a new ‘Outperform’ at Macquarie with a price target of $30.
Yahoo! (YHOO +0.49%) climbed over 2% in after-hours trading after CNBC reported the company will scrap plans to spin off its stake of Alibaba stock.
Hertz Global Holdings (HTZ -3.72%) gained over 3% in after-hours trading after billionaire investor Carl Icahn reported he raised his stake in Hertz to 14.34% from 11.7%.
Kinder Morgan (KMI -4.26%) slid over 6% in after-hours trading after it cut its annual dividend to 50 cents from $2.04, a bigger cut than expectations of a cut to $1.28.
Wynn Resorts Ltd. (WYNN -4.33%) rose over 5% in after-hours trading after the CEO Stephen Wynn reported he bought 1 million shares of the company’s stock.
Oxford Industries (OXM -1.08%) fell nearly 3% in after-hours trading after it lowered guidance on fiscal 2015 EPS to $3.53-$3.63 from a September forecast of $3.55-$3.70, below consensus of $3.66.
Dave & Buster’s (PLAY -2.43%) jumped nearly 6% in after-hours trading after it reported Q3 adjusted EPS of 12 cents, four times higher than expectations of 3 cents, and then raised guidance on fiscal 2015 revenue to $857 million-$861 million from a September estimate of $844 million-$853 million, higher than consensus of $851.8 million.
Smith & Wesson (SWHC +4.65%) reported Q2 adjusted EPS of 25 cents, higher than consensus of 21 cents, and then raised guidance on fiscal 2015 sales to $625 million-$635 million from an August forecast of $610 million-$620 million, higher than consensus of $623 million.
Aerovironment (AVAV -1.57%) jumped over 8% in after-hours trading after it reported an unexpected Q2 adjusted EPS profit of 19 cents, better than consensus of a -9 cent loss.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
7:00 MBA Mortgage Applications
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
1:00 PM Results of $21B, 10-Year Note Auction
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers