It was another down day for the major averages as the DOW dropped .5% and the S&P 500 dropped .9%. My portfolio managed to outperform both indexes with a .49% loss. Frankly, I'm getting tired of beating the averages in this manner. Unfortunately, I don't see an end to the poor market action just yet. The only real news of the day was the drop in oil prices and how the market failed to rally on that. Crude finished down about $4 per barrel on the day. Tomorrow Alcoa (AA) will kick off the earnings season with their second quarter earnings report. The company is sure to disappoint as they always do.
New Specific to my portfolio:
Altria (MO) was the biggest winner today trading up 2%. Since I can find no news to attribute the move to, I'm assuming this was probably just a bounce from last week's selloff which was puzzling. The biggest loser in the portfolio was Teva Pharmaceuticals which lost 8.5% on the back of a report that revealed a 40 mg dose of Copaxone, one of the few drugs the company has developed on its own, is no more effective against Multiple Sclerosis than the already approved 20 mg dose. I still like this stock, but in this environment, I will wait to see if the stock goes lower before adding to my position. I made two moves today. First, I sold some July 125 calls against my position in Freeport McMoran when the stock was trading around $109 per share this morning. The calls have only nine more trading days to rise about 14% or they will finish out of the money. Since my cost basis is well below $125 per share, I like the risk/reward here. My second move was to unload the shares of US Steel (X) that I bought last Wednesday when the stock dropped over $22 in one day. I decided to take the quick gain and lighten up on my position since the market is trading so poorly lately. I know the company will report great second quarter earnings in just a few weeks, but I am being very cautious at the moment and wanted to raise some cash in case buying opportunities present themselves in the meantime.
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