Stock Market Commentary for Thursday, March 17, 2005

A big 2005 profit warning from General Motors (GM) was certainly a negative catalyst on Wednesday, but the overall market reaction was still more technical in nature. The current account deficit was another negative and does get a lot of attention, but it's also something will incrementally fix itself over the next few years as the economy continues to restructure. Another spike in the price of crude oil was also given as a catalyst, but there was nothing new or unexpected there, with the spike being driven primarily by rampant speculation, especially since the latest weekly report showed yet another rise in crude oil inventory levels.

Nasdaq had already been on the verge of a technical break down, so it's no surprise that even a couple of modestly negative catalysts managed to push it over the edge. The almost sharp 19.23-point decline for Nasdaq was certainly disheartening, but hardly a very big deal.
Meanwhile, beyond all the mindless chatter, the economic reports were for the most part fairly decent.

Nasdaq trading volume was moderate, almost heavy (1.99 billion shares), and breadth was moderately strongly negative, with 1.81 losers for each gainer. Despite the disappointment, this was still not a heavy sell-off.

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-- Jack Krupansky