No Dutch Treat

Weakening economic data for the Eurozone did not help matters on Monday. Nor the thought of political instability in the region (Sarkozy on the ropes and Dutch Prime Minister resignation). With that, key bond rates across Europe ratcheted higher. And Spain's 10 year once again touched 6%. Not surprisingly this pushed European stocks much lower leading to hefty declines for US stocks.

Now what?

Fundamentally speaking this is not good news. Because if things do get considerably worse in Europe, then it would likely hamper our economy and stock market.

Technically speaking the S&P fell below the 50 day moving average at 1379. And below the psychologically important level of 1370 (the old highs). The last time this happened was back on April 10th and we quickly snapped back.

I sense we will not leap back above this time because the fundamentals are getting a bit more disconcerting. I would say that there is firm support at 1300. And under that is the 200 day moving average at 1273.

Trade accordingly.

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Best,

Steve Reitmeister (aka Reity... pronounced "Righty")
Executive VP, Zacks Investment Research

Today's Top Stories: Tuesday- April 24, 2012

ZACKS RANK BUY STOCKS

• Aggressive Growth - Valmont Industries (VMI) reported revenue of $717 million approximately $43 million more than the Zacks Consensus Estimate. EPS of $1.96 was $0.40 higher than the Zacks Consensus estimates. Read More...
   
• Growth & Income - WD-40 Company (WDFC) has a solid balance sheet and generates strong cash flow, which has allowed it to pay a dividend yielding a solid 2.7%. WDFC has increased it 4 times at a compound annual rate of 4%. Read More...
   
• Momentum - Sonic Automotive Inc. (SAH) has exceeded the S&P 500's performance by 29% in the past year and almost 6% in the past 3 months. Given the recent pullback, it's now at parity with the major markets. Read More...
   
• Value - Banco Latinoamericano (BLX) reported its first quarter results and easily surprised on the Zacks Consensus by 59.3%. Net income soared 98% to $32.2 million from the first quarter of 2011. Read More...
   

Learn how to profit from our exclusive Zacks Rank stock-ranking system with free resources. Read More...

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• Zacks Industry Outlook: Coal Industry Stock Review - April 2012
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PeopleAndPicks.com:

VIP "MightyMo" lessens the market blow with BUY calls in (KMB), (ROST), (SHW) and (SXCI). Read More...

• Europe's woes spilling over to U.S. - The Buzz @ CNNMoney.com
• Texas Instruments Beats, Gives Upbeat Outlook @ TheStreet.com
• Netflix 1Q Results Top Views But Shares Sink @ FOXBUSINESS.com
• Facebook earnings fall as costs rise @ MarketWatch.com

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