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Traders 'Taking Shots & Crossing Fingers' Even As Consumers Hit the Brakes

Posted May 29, 2008 12:33pm EDT by Aaron Task in Investing, Commodities, Recession
Related: COST, DOW, PG, WFMI, MW, BIG

The stock market is on track for its third-straight advance after first-quarter GDP was revised upward and oil prices fall.

While good for consumers -- as Dow Chemical's price-hike announcement clearly shows -- falling commodity prices is a double-edged sword for the market because of all the gains in commodity-related stocks, especially energy.

But traders are clearly "taking their shots and crossing their fingers," says Dan Colarusso, managing editor of Portfolio.com.

This is most evident in traders trying to "bottom pick" in the financials and retail stocks, where the fundamentals remain dicey. In the latter group, Ralph Lauren was a huge winner yesterday and Big Lots is a big gainer today. But traders are also dealing with disappointments from Sears and Men's Warehouse, as well as Costco, which gave cautious guidance after reporting better-than-expected results.

The bottom line, says Colarusso, is that the economy and market are likely to struggle because of the end of the debt boom that heretofore enabled consumers to spend beyond their means.

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Yahoo! Finance User - Thursday May 29, 2008 01:53PM EDT

Is Kerkorian going to be successful in his bid to buy more Ford stock?

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