Investors Take Profits Ahead Of 3rd Quarter 2012 Earnings Season:
Stocks fell further again as investors took profits before most earnings news comes in. Alcoa started the season on a positive note yesterday but the lack of follow through todays suggests investors expect a dismal quarter. Apple recovered slightly today but Google didn’t and the overall market dropped on expectations that the 3rd quarter of 2012 won’t be as strong as the 2nd. We continue to have a neutral, defensive posture as stocks decline and the S&P 500 dropped -8.92 or 0.62 percent to 1,432.56.
Any signs that the earning season won’t be as bad as market participants expected could help drive stock prices higher but some technicians may be selling based on the prior week’s run up. We are not sure stocks have presented a buying opportunity yet but we are looking at key sectors that could be poised for growth when the market rebounds. Investors could move quickly on expectations Romney could win the presidency and we are looking at small caps, tech, financials as well as healthcare to measure investor appetites. Not all healthcare sectors/stocks will react the same to an Obama or Romney victory and individual company names should be followed carefully.