AI
Tuesday, January 16, 2007 11:32:56 PM
Market Update 070116
http://biz.yahoo.com/mu/update.html
4:20 pm : Even after a long holiday weekend, stocks looked a bit tired Tuesday as the absence of leadership rom the Energy sector amid another sell-off in oil, valuation concerns in tech, and weak economic data minimized blue-chip gains and snapped a three-day winning streak on the Nasdaq.
Stalling follow-through buying interest on the Nasdaq were concerns that the recent rally in tech may not live up to the earnings expectations that have been priced into the sector over the last few months. Exacerbating such concerns was a profit warning from Symantec (SYMC 17.79 -2.69), which tumbled 13% in response to its downwardly revised full-year outlook.
After hitting a multi-year high last week, Cisco Systems (CSCO 28.04 -0.88) plunged 3% after it was downgraded on valuation concerns. Analyst downgrades on KLA-Tencor (KLAC 50.54 -1.63) and Novellus Systems (NVLS 32.20 -0.55) also prompted consolidation in this year's best performing sector.
Not surprisingly, oil prices were a focal point again. Crude for February delivery plunged 3.4% to 19-month lows ($51.21/bbl) after Saudi Arabia's oil minister surprisingly denounced the need for an emergency OPEC meeting and further production cuts. However, while a nearly 6% decline in the front-month crude contract last week was clearly a reason behind the positive tone that contributed to an average gain of 1.9% for the major indices, today's sell-off removing notable leadership from Energy was more of a concern.
The Energy sector had been expected to grow earnings a solid 16% this quarter (Q107), following an anticipated 3% decline in Q4 profits; but that was before the continued downturn in crude now leaves the commodity down 16% already this year.
Since oil makes up as much as 60% of the costs for many chemical companies, DuPont (DD 50.51 +0.78) paced the way (+1.6%) among the 18 Dow components trading higher and helped the Dow inch to another new record close.
Another beneficiary of oil's continued slide was Transports. Airlines, for which oil constitutes roughly 30% of total costs, got an added boost from an analyst upgrade on Southwest Airlines (LUV 16.56 +0.34). FedEx (FDX 111.58 +2.72), which was also upgraded, provided additional support for an Industrials sector that was also dealing with a weaker than expected read on manufacturing conditions.
Before the bell, the January NY Empire Index fell to a 20-month low of 9.1 in January and December's figure was revised lower. Albeit not the most influential of regional surveys, it was today's only scheduled economic release and offered investors one of the first perspectives on economic strength in the New Year. BTK +0.2% DJ30 +26.51 DJTA +2.1% DJUA +0.2% DOT -0.7% NASDAQ -5.04 NQ100 -0.1% R2K -0.4% SOX -1.3% SP400 -0.2% SP500 +1.17 XOI -1.5% NASDAQ Dec/Adv/Vol 1654/1406/2.13 bln NYSE Dec/Adv/Vol 1724/1575/1.39 bln
3:30 pm : Equities continue to run in place with a sense of caution going into the close. Energy's 1.4% decline now leaves the sector down more than 7% for the year, as 30 of 33 components are trading lower, and continues to act as an offset to the fact that seven out of 10 sectors are actually in positive territory. It is worth noting, though, that today's breather isn't all that surprising since earnings pick up in earnest this week and it remains to be seen if upcoming results and guidance can justify the sustainability of recent market gains.DJ30 +13.05 NASDAQ -7.73 SP500 -0.10 NASDAQ Dec/Adv/Vol 1667/1367/1.81 bln NYSE Dec/Adv/Vol 1675/1581/1.18 bln
3:00 pm : Recent recovery efforts appear to have stalled, leaving the major indices vacillating around the flat line with few catalysts to help them convincingly abandon their neutral stance. On a positive note, oil prices have recently closed down 3.3% at $52.21/bbl; but that also leaves the Energy sector down 1.3% and not enough upside momentum to act as an offset to the absence of leadership from the likes of Refiners (-1.5%), Drillers (-1.4%) and Integrated oil (-1.4%). Exxon Mobil (XOM 71.51 -1.15) still paces the way lower (-1.6%) on the Dow and is off nearly 7% for the year, which accounts for $29 bln in lost market capitalization for the S&P 500's largest company.
11:00 am : All three indices are now in the red as split sector leadership continues to dictate this morning's action. While Tech's 0.6% decline remains the biggest obstacle for the bulls to overcome, as evidenced by the Nasdaq pacing the way lower among the majors, the absence of leadership in Energy (-1.1%) is also noteworthy.
Even though the sector is expected to follow up a 34% rise in profit growth (Q3) with a nearly 3% decline in Q4 earnings, the sector was forecast to grow Q107 earnings about 16%. However, that was before the ongoing sell-off in oil prices that now leave the front-month February crude contract down nearly 20% just two weeks into the New Year. After plunging nearly 6% last week, oil prices are currently down another 3.0% at $51.35/bbl after Saudi Arabian Oil Minister Ali al- Naimi surprisingly denounced the need for an emergency OPEC meeting and further production cuts. DJ30 -13.19 NASDAQ -7.08 SP500 -1.29 XOI -0.9% NASDAQ Dec/Adv/Vol 1389/1434/654 mln NYSE Dec/Adv/Vol 1387/1641/400 mln
10:30 am : The major averages are now trading in split fashion as sellers regain some momentum within the last 30 minutes. After briefly hitting a new intraday all-time high, the Dow has since run into some resistance. Intel (INTC 21.82 -0.31) is the Dow's worst performing component (-1.4%) amid concerns it will say after the close that earnings fell for a fourth straight quarter.
Also contributing to further deterioration in Technology (-0.4%) is consolidation in bellwether Cisco Systems (CSCO 28.32 -0.60), which is down 2.1% after it was downgraded on valuation concerns. The PHLX Semiconductor Sector Index is also under pressure following analyst downgrades on KLA-Tencor (KLAC 50.88 -1.29) and Novellus Systems (NVLS 31.97 -0.78). Throw in a Q3 warning from Symantec (SYMC 18.98 -1.50) and it appears investors are becoming a bit worried about tech's earnings prospects and the sustainability of recent gains that have earmarked Tech as this year's best performing S&P 500 sector (+4.2%).DJ30 -3.32 NASDAQ -2.17 SOX -1.2% SP500 +0.17 NASDAQ Dec/Adv/Vol 1277/1501/492 mln NYSE Dec/Adv/Vol 1281/1702/286 mln
10:00 am : Equities are still on the offensive as eight out of 10 sectors remain positive. Industrials (+0.5%) is pacing the way as Transports get a boost from plunging oil prices (-1.6%) as well as analyst upgrades on FedEx (FDX 112.00 +3.14) and Southwest Airlines (LUV 16.40 +0.18). Materials, which is forecast to post 37% year/year earnings growth in Q4, is turning in a similar performance while Health Care is providing some upside leadership after Express Scripts (ESRX 65.81 +0.98) launched a $24.8 bln tender offer for Caremark (CMX 56.39 -0.44).DJ30 +13.94 DJTA +1.4% NASDAQ +4.22 SP500 +2.49 NASDAQ Dec/Adv/Vol 819/1781/242 mln NYSE Dec/Adv/Vol 939/1829/102 mln
09:40 am : After a three-day break, last week's underlying positive tone is carrying over into this morning's open. Oil prices tacking a 1.8% decline (now near $52/bbl) onto last week's nearly 6% sell-off are providing a floor of support, as is Dow component General Electric (GE 38.10 +0.21) doing its part to keep the M&A theme going in 2007. GE is acquiring the aerospace unit of Smiths Group for $4.8 bln in cash.
However, since investors are still preoccupied with the pace of economic growth, especially with earnings season picking up in earnest this week, the NY Empire State manufacturing index falling to a 20-month low of 9.1 in January, from a downwardly revised reading of 22.2 in December, is minimizing early market gains. DJ30 +13.17 NASDAQ +3.48 SP500 +1.06 NASDAQ Vol 82 mln NYSE Vol 52 mln
09:15 am : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +1.0.
09:00 am : S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +1.0. The stage remains set for the major averages to open slightly higher, but futures indications clinging to their positive disposition aren't providing a whole lot of conviction on the part of buyers. Following notable analyst downgrades (e.g. CSCO, KLAC, and NVLS) and a Q3 warning from Symantec (SYMC), this year's best performing sector (Technology) may come under some profit-taking pressure. With earnings reports dominating market action this week as well, investors may also be waiting to get further validation about the sustainability of a nearly four year run of double-digit profit growth for the S&P 500.
http://biz.yahoo.com/mu/update.html
4:20 pm : Even after a long holiday weekend, stocks looked a bit tired Tuesday as the absence of leadership rom the Energy sector amid another sell-off in oil, valuation concerns in tech, and weak economic data minimized blue-chip gains and snapped a three-day winning streak on the Nasdaq.
Stalling follow-through buying interest on the Nasdaq were concerns that the recent rally in tech may not live up to the earnings expectations that have been priced into the sector over the last few months. Exacerbating such concerns was a profit warning from Symantec (SYMC 17.79 -2.69), which tumbled 13% in response to its downwardly revised full-year outlook.
After hitting a multi-year high last week, Cisco Systems (CSCO 28.04 -0.88) plunged 3% after it was downgraded on valuation concerns. Analyst downgrades on KLA-Tencor (KLAC 50.54 -1.63) and Novellus Systems (NVLS 32.20 -0.55) also prompted consolidation in this year's best performing sector.
Not surprisingly, oil prices were a focal point again. Crude for February delivery plunged 3.4% to 19-month lows ($51.21/bbl) after Saudi Arabia's oil minister surprisingly denounced the need for an emergency OPEC meeting and further production cuts. However, while a nearly 6% decline in the front-month crude contract last week was clearly a reason behind the positive tone that contributed to an average gain of 1.9% for the major indices, today's sell-off removing notable leadership from Energy was more of a concern.
The Energy sector had been expected to grow earnings a solid 16% this quarter (Q107), following an anticipated 3% decline in Q4 profits; but that was before the continued downturn in crude now leaves the commodity down 16% already this year.
Since oil makes up as much as 60% of the costs for many chemical companies, DuPont (DD 50.51 +0.78) paced the way (+1.6%) among the 18 Dow components trading higher and helped the Dow inch to another new record close.
Another beneficiary of oil's continued slide was Transports. Airlines, for which oil constitutes roughly 30% of total costs, got an added boost from an analyst upgrade on Southwest Airlines (LUV 16.56 +0.34). FedEx (FDX 111.58 +2.72), which was also upgraded, provided additional support for an Industrials sector that was also dealing with a weaker than expected read on manufacturing conditions.
Before the bell, the January NY Empire Index fell to a 20-month low of 9.1 in January and December's figure was revised lower. Albeit not the most influential of regional surveys, it was today's only scheduled economic release and offered investors one of the first perspectives on economic strength in the New Year. BTK +0.2% DJ30 +26.51 DJTA +2.1% DJUA +0.2% DOT -0.7% NASDAQ -5.04 NQ100 -0.1% R2K -0.4% SOX -1.3% SP400 -0.2% SP500 +1.17 XOI -1.5% NASDAQ Dec/Adv/Vol 1654/1406/2.13 bln NYSE Dec/Adv/Vol 1724/1575/1.39 bln
3:30 pm : Equities continue to run in place with a sense of caution going into the close. Energy's 1.4% decline now leaves the sector down more than 7% for the year, as 30 of 33 components are trading lower, and continues to act as an offset to the fact that seven out of 10 sectors are actually in positive territory. It is worth noting, though, that today's breather isn't all that surprising since earnings pick up in earnest this week and it remains to be seen if upcoming results and guidance can justify the sustainability of recent market gains.DJ30 +13.05 NASDAQ -7.73 SP500 -0.10 NASDAQ Dec/Adv/Vol 1667/1367/1.81 bln NYSE Dec/Adv/Vol 1675/1581/1.18 bln
3:00 pm : Recent recovery efforts appear to have stalled, leaving the major indices vacillating around the flat line with few catalysts to help them convincingly abandon their neutral stance. On a positive note, oil prices have recently closed down 3.3% at $52.21/bbl; but that also leaves the Energy sector down 1.3% and not enough upside momentum to act as an offset to the absence of leadership from the likes of Refiners (-1.5%), Drillers (-1.4%) and Integrated oil (-1.4%). Exxon Mobil (XOM 71.51 -1.15) still paces the way lower (-1.6%) on the Dow and is off nearly 7% for the year, which accounts for $29 bln in lost market capitalization for the S&P 500's largest company.
11:00 am : All three indices are now in the red as split sector leadership continues to dictate this morning's action. While Tech's 0.6% decline remains the biggest obstacle for the bulls to overcome, as evidenced by the Nasdaq pacing the way lower among the majors, the absence of leadership in Energy (-1.1%) is also noteworthy.
Even though the sector is expected to follow up a 34% rise in profit growth (Q3) with a nearly 3% decline in Q4 earnings, the sector was forecast to grow Q107 earnings about 16%. However, that was before the ongoing sell-off in oil prices that now leave the front-month February crude contract down nearly 20% just two weeks into the New Year. After plunging nearly 6% last week, oil prices are currently down another 3.0% at $51.35/bbl after Saudi Arabian Oil Minister Ali al- Naimi surprisingly denounced the need for an emergency OPEC meeting and further production cuts. DJ30 -13.19 NASDAQ -7.08 SP500 -1.29 XOI -0.9% NASDAQ Dec/Adv/Vol 1389/1434/654 mln NYSE Dec/Adv/Vol 1387/1641/400 mln
10:30 am : The major averages are now trading in split fashion as sellers regain some momentum within the last 30 minutes. After briefly hitting a new intraday all-time high, the Dow has since run into some resistance. Intel (INTC 21.82 -0.31) is the Dow's worst performing component (-1.4%) amid concerns it will say after the close that earnings fell for a fourth straight quarter.
Also contributing to further deterioration in Technology (-0.4%) is consolidation in bellwether Cisco Systems (CSCO 28.32 -0.60), which is down 2.1% after it was downgraded on valuation concerns. The PHLX Semiconductor Sector Index is also under pressure following analyst downgrades on KLA-Tencor (KLAC 50.88 -1.29) and Novellus Systems (NVLS 31.97 -0.78). Throw in a Q3 warning from Symantec (SYMC 18.98 -1.50) and it appears investors are becoming a bit worried about tech's earnings prospects and the sustainability of recent gains that have earmarked Tech as this year's best performing S&P 500 sector (+4.2%).DJ30 -3.32 NASDAQ -2.17 SOX -1.2% SP500 +0.17 NASDAQ Dec/Adv/Vol 1277/1501/492 mln NYSE Dec/Adv/Vol 1281/1702/286 mln
10:00 am : Equities are still on the offensive as eight out of 10 sectors remain positive. Industrials (+0.5%) is pacing the way as Transports get a boost from plunging oil prices (-1.6%) as well as analyst upgrades on FedEx (FDX 112.00 +3.14) and Southwest Airlines (LUV 16.40 +0.18). Materials, which is forecast to post 37% year/year earnings growth in Q4, is turning in a similar performance while Health Care is providing some upside leadership after Express Scripts (ESRX 65.81 +0.98) launched a $24.8 bln tender offer for Caremark (CMX 56.39 -0.44).DJ30 +13.94 DJTA +1.4% NASDAQ +4.22 SP500 +2.49 NASDAQ Dec/Adv/Vol 819/1781/242 mln NYSE Dec/Adv/Vol 939/1829/102 mln
09:40 am : After a three-day break, last week's underlying positive tone is carrying over into this morning's open. Oil prices tacking a 1.8% decline (now near $52/bbl) onto last week's nearly 6% sell-off are providing a floor of support, as is Dow component General Electric (GE 38.10 +0.21) doing its part to keep the M&A theme going in 2007. GE is acquiring the aerospace unit of Smiths Group for $4.8 bln in cash.
However, since investors are still preoccupied with the pace of economic growth, especially with earnings season picking up in earnest this week, the NY Empire State manufacturing index falling to a 20-month low of 9.1 in January, from a downwardly revised reading of 22.2 in December, is minimizing early market gains. DJ30 +13.17 NASDAQ +3.48 SP500 +1.06 NASDAQ Vol 82 mln NYSE Vol 52 mln
09:15 am : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +1.0.
09:00 am : S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +1.0. The stage remains set for the major averages to open slightly higher, but futures indications clinging to their positive disposition aren't providing a whole lot of conviction on the part of buyers. Following notable analyst downgrades (e.g. CSCO, KLAC, and NVLS) and a Q3 warning from Symantec (SYMC), this year's best performing sector (Technology) may come under some profit-taking pressure. With earnings reports dominating market action this week as well, investors may also be waiting to get further validation about the sustainability of a nearly four year run of double-digit profit growth for the S&P 500.
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