Options Wonderland : Market Update 081223

Upgrade Today! Streaming real-time quotes from only $9.99

Free Zone | User's Groups | Options Wonderland

Public Reply | Private Reply | Keep | Last Read

Posted by: 3xBuBa	Date: Tuesday, December 23, 2008 5:38:51 PM
In reply to: 3xBuBa who wrote msg# 41396	Post # of 60585

Market Update 081223
http://biz.yahoo.com/mu/update.html
4:15 pm : A lack of leadership prompted participants to send the stock market lower in another thinly traded session.

Trading volume remains light ahead of the Dec. 25 holiday. Less than 1 billion shares were exchanged on the NYSE this session. That is the least volume in a full trading day since August.

Stocks actually opened with broad-based gains, advancing as much as 1.0%. Those gains quickly turned into losses, though, as sellers entered the ring, focusing much of their effort on the financial sector.

Financials were up as much as 1.2%, but finished the session 1.9% lower as the worst performing economic sector. The sector's weakness was largely attributable to diversified financial players, which will still be facing formidable obstacles in 2009. Bank of America (BAC 12.76, -0.77) and JPMorgan Chase (JPM 29.14, -0.68) traded as laggards, and also weighed on the Dow.

Goldman Sachs (GS 75.34, -1.66) and Morgan Stanley (MS 14.44, -0.14) also finished lower. Analysts at JPMorgan lowered their earnings estimates for Goldman, but raised their estimates for Morgan Stanley.

Concern continues to surround automakers. Standard & Poor's lowered the unsecured debt rating of General Motors (GM 3.01, -0.51) to C from CC, even though the government plans to provide GM with financing. Meanwhile, Moody's lowered Ford's (F 2.19, -0.40) credit rating to Caa3.

Economic data did little to entice buyers into the market. The latest batch of home sales remained weak. November new home sales declined 2.9% to an annualized rate of 407,000 units, which is the lowest level in 17 years. The consensus forecast called for new home sales of 415,000.

November existing home sales declined 8.6% to an annualized rate of 4.49 million units, which is worse than the already-depressed levels seen in recent months. The consensus called for 4.93 million sales.

Final third quarter GDP data came without major surprise. The economy contracted at an annualized rate of 0.5%, which is unchanged from the prior reading. The personal consumption component was down 3.8%, while the core personal consumption component was up 2.4%. Economists expected the consumption levels to remain unchanged from the prior reading at -3.7% and +2.6%, respectively.

European exchanges closed with mixed results. Britain's FTSE finished 0.2% higher as its investors overcame news that the economy officially slipped 0.6% during the third quarter. British banks were key in the advance. Banks and financial companies in Germany helped limit weakness in the DAX, which fell 0.2%. France's CAC lagged, closing 0.7% lower.

The MSCI Asia-Pacific Index closed 2.8% lower in the wake of yesterday's loss warning from Toyota Motor (TM 60.36, -0.52). The fact China cut its benchmark rate by a less-than-expected 27 basis points to 5.31% also weighed on sentiment. The Hang Seng shed 2.8% as developers and banks showed weakness. Japan's markets were closed for holiday observance. DJ30 -100.82 NASDAQ -10.81 NQ100 -0.5% R2K -1.4% SP400 -0.9% SP500 -8.48 NASDAQ Adv/Vol/Dec 984/1.31 bln/1835 NYSE Adv/Vol/Dec 1205/984 mln/1886

3:30 pm : Crude oil closed roughly 3.3% lower at $38.58 per barrel. Oil futures had been down 5.3% when they set a session low of $37.79 per barrel.

Crude actually traded higher, though only for a bit. Its session high was $40.65 per barrel.

January natural gas had a strong session. It finished near its session high at $5.61, up 6.0%.

Oil and natural gas inventory data are due tomorrow morning since the U.S. markets will be closed Dec. 25.

February gold contracts slipped 1.6% to finish just below $834 per ounce. Gold actually closed near the middle of the session's trading range. Gold is trading with a modest gain year-to-date.

Silver also slid. March silver contracts closed near $10.23 per ounce, which is roughly 5.8% lower. DJ30 -82.12 NASDAQ -9.77 SP500 -6.38 NASDAQ Adv/Vol/Dec 989/1.09 bln/1814 NYSE Adv/Vol/Dec 1243/738 mln/1838

3:00 pm : Stocks have fallen to new session lows amid renewed selling pressure. All 10 of the major economic sectors are now in the red; seven of the sectors are trading with losses of at least 1%.

Utilities (-1.7%) are the worst performing sector of the bunch, and have been for virtually the entire session. The sector's weakness is largely specific to electric utilities players. On the other hand, nuclear generator Exelon (EXC 51.55, +0.14) is providing modest support to the sector. DJ30 -99.40 NASDAQ -16.26 SP500 -9.02 NASDAQ Adv/Vol/Dec 924/976 mln/1864 NYSE Adv/Vol/Dec 1139/657 mln/1936

2:30 pm : Stocks are slowly drifting back toward the unchanged mark but pervasive weakness continues to restrain the move.

Only a handful of trading sessions remain before 2008 draws to a close. Many investors will be happy to put the year behind them.

Year-to-date, the S&P 500 has fallen more than 40%. The Dow has dropped 36% this year. The Nasdaq is down more than 42% year-to-date.

Financials remain the worst performing economic sector. Financials have lost nearly 60% of their worth this fiscal year.DJ30 -33.45 NASDAQ -8.78 SP500 -2.21 NASDAQ Adv/Vol/Dec 1024/883 mln/1760 NYSE Adv/Vol/Dec 1312/593 mln/1742

2:00 pm : Stocks are making a pronounced upward turn after trading in a relatively narrow range during the last hour.

Energy has made its way back into the green, reversing its decline as oil pares its losses. Energy was down as much as 1.0%, but is now up 0.7%. Oil futures were down as much as 5.3%, but are now down 1.0% to $39.50 per barrel.DJ30 -24.53 NASDAQ -7.40 SP500 -1.60 NASDAQ Adv/Vol/Dec 986/807 mln/1748 NYSE Adv/Vol/Dec 1271/538 mln/1780

1:30 pm : Action remains listless, and the stock market has begun to trade in a relatively narrow range. Stocks are still showing losses, though, as nearly 70% of the holdings in the S&P 500 are trading lower.

Weakness has extended into commodities. The CRB Commodity Index is down 0.3%. Oil has shed 2.5% to trade just below $39 per barrel. Gold was recently indicated at $835 per ounce, down 1.3%.

Treasuries are also finding little action. The 10-year Note is up just one tick. DJ30 -46.83 NASDAQ -8.76 SP500 -4.51 NASDAQ Adv/Vol/Dec 986/741 mln/1725 NYSE Adv/Vol/Dec 1184/492 mln/1855

1:00 pm : After opening the session with solid gains the stock market turned lower midsession as sellers entered the fold. Stocks traded as much as 1.0% higher, but a wave of selling knocked stocks lower. Stocks are currently down 0.4%, a bit off their session low.

With a holiday just a few days ahead, trading has been thin, which means there is little conviction behind the market's moves. Roughly 450 million shares have traded hands on the NYSE so far this session.

A lack of tradable headlines has also kept many investors on the sidelines.

Early news items included word that Standard & Poor's lowered the unsecured debt rating of General Motors (GM 2.98, -0.54) to C from CC. Meanwhile, Moody's lowered Ford's (F 2.18, -0.41) rating to Caa3.

The latest batch of home sales was predictably weak. November new home sales declined 2.9% to an annualized rate of 407,000 units, which is the lowest level in 17 years. New home sales fell short of the consensus estimate of 415,000.

Existing home sales for November declined 8.6% to an annualized rate of 4.49 million units, which is below recent averages. The consensus called for 4.93 million sales.

Sluggish sales continue to keep inventory elevated, which puts downward pressure on prices. Lower prices along with the drop in mortgage rates should stimulate demand in coming months. Still, banks will first need to open their coffers to make the funds available.

Weakness among financial stocks (-0.9%) factored into the broader market's downward move. The financial sector was up as much as 1.2% earlier, but continued weakness among major financial services companies has been a drag; diversified financial services companies are down 1.4%.

Goldman Sachs (GS 75.44, -1.56) has traded as a laggard after analysts at JPMorgan trimmed their earnings estimates for the company. The analysts raised their estimates for Morgan Stanley (MS 14.73, +0.15), though. DJ30 -63.76 NASDAQ -11.62 SP500 -6.23 NASDAQ Adv/Vol/Dec 952/689 mln/1762 NYSE Adv/Vol/Dec 1128/456 mln/1908

12:30 pm : Stocks continue to trade with weakness. The largest declines are coming from the utilities (-1.4%) and financial (-1.0%) sectors.

Only health care remains in positve ground. Advancers have a slight edge over decliners in the sector.

Dow component Merck (MRK 29.65, +0.56) is providing leadership to the health care sector, as is Bristol-Myers Squibb (BMY 23.45, +0.52).DJ30 -59.50 NASDAQ -10.52 SP500 -5.92 NASDAQ Adv/Vol/Dec 1031/604 mln/1660 NYSE Adv/Vol/Dec 1159/403 mln/1847

12:00 pm : The major indices have fallen to their worst levels of the session as broad-based gains reverse into broad-based declines. Eight of the 10 economic sectors are now in the red. The only two sectors to trade with a gain, health care (+0.1%) and materials (+0.3%), are quickly losing ground, though.

Considerable weakness continues to surround automakers after General Motors (GM 2.95, -0.57) and Ford (F 2.16, -0.43) had their credit ratings downgraded.

Specifically, Standard and Poor's lowered GM's unsecured debt rating to C from CC. The revision takes into account the funds that are being made available from the U.S. government. Standard & Poor's also indicated that it is unlikely to raise the credit ratings of the Big Three automakers in the near future.

As for Ford, Moody's lowered the automaker's rating to Caa3 after considering the risk that Ford might have to restructure its balance sheet in order to achieve some of the same union concessions that GM or Chrysler may achieve as they reorganize their operations.

Automakers have traded lower for two straight sessions. The group has dropped nearly 30% since the close of last week.DJ30 -39.27 NASDAQ -4.51 SP500 -3.90 NASDAQ Adv/Vol/Dec 1130/526 mln/1540 NYSE Adv/Vol/Dec 1331/355 mln/1672

11:30 am : Energy (-0.4%) and financial stocks (-0.5%) have turned sharply lower, taking the broader market with them.

At its session high, energy was up 1.7%. Energy was holding up against retreating oil prices earlier, but the recent 4.5% drop in crude proved too much. Crude is now trading hands at $38.10 per barrel.

Financials were up 1.2% at their session high, but continued weakness from the likes of Bank of America (BAC 13.10, -0.43) and Citigroup (C 6.55, -0.20) has undercut the sector's performance.DJ30 -15.37 NASDAQ +0.50 SP500 -1.30 NASDAQ Adv/Vol/Dec 1177/447 mln/1428 NYSE Adv/Vol/Dec 1392/307 mln/1556

11:00 am : A few fits of sellling pressure have made for choppy trading this morning. Still, gains remain solid and broad-based.

Within the S&P 500, utilities are the only economic sector trading with a loss. The sector is currently down 1.0% as Duke Energy (DUK 14.59, -0.25) and FirstEnergy (FE 46.89, -2.20) show weakness. FirstEnergy announced after the prior session's close it will begin a competitive bidding process for several of its regional utilities.

The Dow Jones Utility Average is down 1.0% as 11 of its 15 members trade lower.

Gains are strongest in the materials sector, which is up 1.4%. The advance comes as a rebound after materials have been hit with stiff selling pressure during recent sessions. Previous weakness is largely owed to falling commodities prices, which stem from weakened demand amid a softer global economy.DJ30 +31.06 NASDAQ +8.15 SP500 +4.43 NASDAQ Adv/Vol/Dec 1277/368 mln/1286 NYSE Adv/Vol/Dec 1645/252 mln/1247

10:30 am : Crude oil futures have retreated into the red after trading with gains earlier this morning. Crude futures were up as much as 1.9% before falling to a loss of as much as 2.2%. Crude was most recently indicated 2.0% lower at $39.10 per barrel.

Though oil is making swings this morning, price movement was relatively limited in overnight trade.

Despite the weakness in oil, energy is trading markedly higher. Its 0.5% gain follows leadership from energy giant and Dow component Exxon Mobil (XOM 75.67, +0.76).

Natural gas for January delivery recently traded near a session high of $5.44, up $0.14 or roughly 0.9%.

Since markets are closed Dec. 25, both crude oil and natural gas will have inventory data tomorrow (at 10:35 AM ET and 12:00 PM ET, respectively).

Gold is trading a modest 0.2% lower at $844.50 per ounce. Its slide comes despite a considerable 1.4% drop in the U.S. dollar. DJ30 +58.06 NASDAQ +12.30 SP500 +7.18 NASDAQ Adv/Vol/Dec 1387/273 mln/1093 NYSE Adv/Vol/Dec 1782/194 mln/1069

10:00 am : November new home sales totaled 407,000, which is less than the consensus estimate of 415,000 new home sales. New home sales in the prior month were revised lower to 419,000. The actual month-over-month change reflected a 2.9% decrease.

Toll Brothers (TOL 20.96, +0.42), Pulte Homes (PHM 10.65, +0.11), and DR Horton (DHI 7.17, +0.12) continue to trade with strength.

November existing home sales totaled 4.49 million, which is less than the consensus estimate of 4.93 million homes, and down from the downwardly revised 4.91 million existing home sales registered in the month before.

Separately, the final December consumer sentiment survey came in at 60.1, which is above the 58.8 reading that was widely expected. The final reading is up modestly from the preliminary December reading of 59.1. The final reading for November was 55.3.DJ30 +51.61 NASDAQ +14.15 SP500 +5.58 NASDAQ Adv/Vol/Dec 1450/159 mln/873 NYSE Adv/Vol/Dec 1829/124 mln/920

09:45 am : Selling pressure has quickly taken hold of the major indices, though solid gains remain.

Financials (-0.4%) are laggards in the early going as Bank of America (BAC 13.12, -0.41) has come under early pressure. Goldman Sachs (GS 75.99, -1.01) is also trading lower, but Morgan Stanley (MS 14.69, +0.11) is finding favor. Analysts at JPMorgan lowered their earnings estimates for Goldman, but increased their estimates for Morgan Stanley.

Utilities are also being hit. The defensive-oriented sector is down 0.4% with weakness in Duke Energy (DUK 14.71, -0.13).DJ30 +42.13 NASDAQ +6.35 SP500 +3.96 NASDAQ Adv/Dec 1263/946 NYSE Adv/Dec 1577/1108

09:20 am : S&P futures vs fair value: +7.60. Nasdaq futures vs fair value: +5.00. Stock futures point to a slightly higher start, despite a lack of positive headlines. Low volume in premarket trading makes stock futures an imperfect indicator of what direction trading will actually take, however. Trading volume is expected to remain light this session since many traders and market participants are taking off around the holiday schedule.

09:00 am : S&P futures vs fair value: +5.00. Nasdaq futures vs fair value: +3.00. U.S. stock futures continue pointing to a positive start, which contrasts the weakness that Asian markets showed Tuesday. The MSCI Asia-Pacific Index closed 2.8% lower after Toyota Motor (TM) yesterday warned investors the company could post its first ever loss. China cut its benchmark rate by 27 basis points to 5.31% in another move to help stimulate its economy, though the reduction was less than some expected. Disappointment following the cut weighed on sentiment, which helped push the Hang Seng 2.8% lower. Meanwhile, the Shanghai Composite closed 4.6% lower. Developers and banks showed weakness. Japan’s markets were closed for holiday observance. India’s Sensex closed 2.4% lower with realty and banking stocks trading as primary losers. The Indian government indicated the country has room to cut interest rates further and pump more money into the economy. Europe's major indices are trading with gains, however. The French CAC is up 0.6%. London's FTSE and Germany's DAX are both up 0.9%. Financial holdings are helping lead the benchmark German index higher.

08:35 am : S&P futures vs fair value: +4.00. Nasdaq futures vs fair value: +2.80. U.S. stock futures continue pointing to an upward start. The final third quarter GDP reading indicated the economy contracted at an annualized rate of 0.5%, which is unchanged from the prior reading and in step with what economists were expecting. The personal consumption component was down 3.8%, while the core personal consumption component was up 2.4%. Economists expected the consumption levels to remain unchanged from the prior reading at -3.7% and +2.6%, respectively. The final GDP price index was up 3.9%, which is below the 4.2% increase that was indicated in the prior reading. Economists were expecting the price index to go unchanged.

08:00 am : S&P futures vs fair value: +2.80. Nasdaq futures vs fair value: +2.30. U.S. stock futures point to a modestly higher open. Standard & Poor's cut the unsecured debt rating of General Motors (GM) and General Motors of Canada to C from CC. The revision reflects the expected funds from the U.S. and Canadian governments. Standard & Poor's also noted it is not likely to raise the credit ratings on Big Three companies above the CCC category in the near future. Moody's lowered Ford's (F) ratings to Caa3, reflecting the increased risk Ford will restructure its balance sheet to achieve the same union concessions as GM and Chrysler. Analysts at JPMorgan lowered their earnings estimates for Goldman Sachs (GS), but raised their estimates for Morgan Stanley (MS). Final third quarter GDP data are due at the bottom of the hour. New and Existing November home sales data are due later in the morning, along with the revised December consumer sentiment survey (10:00 AM ET).

06:43 am : S&P futures vs fair value: +4.30. Nasdaq futures vs fair value: +3.00.

06:40 am : Nikkei...Holiday......... Hang Seng...14220.79...-401.60...-2.80%.

06:40 am : FTSE...4268.16...+19.00...+0.50%. DAX...4656.81...+18.10...+0.30%.