Major averages closed mixed on mixed volume, though opened sharply lower after China announced it cut down on risky debt by banning the use of low-grade corporate debt. The new rule is designed to prevent risks from building up further as a result of high debt leverage in the market, and caused Chinese stocks and bonds to tank. The benchmark Shanghai index plummeted 5.4% to record its biggest fall since 2009. That said, U.S. markets managed to claw their way back to nearly breakeven or, in the case of the NASDAQ Composite, finish higher by 0.54%. The more volatile small cap Russell 2000 finished higher by 1.96%. Still, leading stocks continue to lag, and the bounce seemed logical given that several short-sale target stocks, such as TSLA, TWTR, and NFLX, for example, had undercut their near-term downside price targets.
Pharma company Akorn (AKRX) had a pocket pivot yesterday . Earnings are strongly accelerating, pretax margin 31.5%, ROE 27.1%, group rank 5.
Furniture retailer Restoration Holdings (RH) had a pocket pivot yesterday. Earnings are robust, group rank 51. RH is just coming out of a midbar handle. RH reports earnings after today's close.
On an administrative note, members can follow Gil Morales on our Twitter page at @vsinvesting for real-time observations and comments.
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