Thursday, August 2, 2012

Update- No action from the ECB, futures slide, Are your shorts on?

An excerpt from the Bloomberg article, more at the link



U.S. Stock Futures Fall After Comments by ECB’s Draghi


U.S. stock futures declined, indicating the Standard & Poor’s 500 Index will drop a fourth day, as the European Central Bank Mario Draghi failed to reassure investors on immediate efforts to bolster the economy.
Knight Capital Group Inc. (KCG) plunged 56 percent after saying losses from yesterday’s trading breakdown are $440 million, more than some analysts had estimated, and it is exploring strategic and financial alternatives. Abercrombie & Fitch Co. (ANF) tumbled 15 percent after the teen retailer cut its profit forecast. First Solar Inc. (FSLR), the biggest maker of thin-film panels, soared 17 percent after an 81 percent jump in earnings.
S&P 500 futures expiring in September fell 0.7 percent to 1,360.90 at 9:14 a.m. New York time. Dow Jones Industrial Average futures slid 77 points, or 0.6 percent, to 12,846. The number of shares changing hands in Stoxx Europe 600 Index’s companies was 6.8 percent lower than the 30-day average at this time of day, according to data compiled by Bloomberg.
“Traders and investors who expected immediate action are, and should be, disappointed,” Carl Weinberg, founder and chief economist of High Frequency Economics, wrote in a note today. “Clearly, the action plan is still lacking details.”
European Central Bank President Mario Draghi signaled the bank will join forces with governments to buy sovereign bonds in sufficient quantities to remove all doubts about the future of the euro. Any ECB bond purchases will be conducted in a way to soothe investors’ concerns about seniority, Draghi told said at a press conference today, after keeping the benchmark interest rate on hold at 0.75 percent. Details of the bond purchase plan will be fleshed out in coming weeks, he said.

As I stated in other posts, watch for SPY to close that gap around $129. Are your shorts on?

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