AI
Thursday, January 25, 2007 8:48:35 PM
Market Update 070124
http://biz.yahoo.com/mu/update.html
4:20 pm : Evidently, the absence of potentially troubling economic data a day earlier did help investors place more of an emphasis on the "good" news embedded in earnings reports because today's mixed earnings news and economic data dashing hopes of a Fed rate cut anytime soon took a toll on sentiment.
The major averages opened mixed as investors weighed the sustainability of yesterday's impressive rally against another round of better than expected results. Dow component AT&T (T 36.84 0.21) was the day's biggest name, opening at a multi-year high (+2.6%) after beating expectations and guiding for double-digit EPS growth this year and next. Nonetheless, blue-chip buyers began showing some reserve early on, especially after the Dow hit record levels and the S&P 500 hit six-year highs Wednesday.
The Nasdaq wasn't faring much better early on as it was clinging to a small gain following unexpectedly strong results from tech companies like eBay (EBAY 33.65 +3.65) and Qualcomm (QCOM 38.16 -0.46). eBay, a recommended holding in the Briefing.com Active Portfolio, was up as much as 18% last night following its encouraging Q4 report and still closed up 8%. Be that as it may, a two-day hiatus from any economic reports also left investors anxiously waiting to see if the housing market was still showing signs of stabilization.
Then, at 10:00 ET, existing home sales for December checked in shy of economists' forecasts and, for all of 2006, fell 8.4% -- the largest annual decline in 17 years. While that was responsible for a knee-jerk reaction in stocks that exacerbated the temptation to take some of yesterday's gains off the table, the worst was yet to come.
Fed funds futures, which were pricing in a nearly 50% rate cut before June, erased all expectations of a Fed easing. As a result, bonds began selling off, which lifted the yield on the 10-year note to five-month highs and left investors pricing in a more hawkish Fed stance just days before the next FOMC meeting. Such concerns weighed heavily on the rate-sensitive and influential Financials sector.
Since higher interest rates spark valuation concerns among growth stocks, Technology found itself under some additional profit-taking pressure. That was especially evident on the tech-heavy Nasdaq, which surrendered nearly all of Wednesday's 1.4% advance. In fact, Microsoft (MSFT 30.45 -0.64), which is also a Dow component and the fourth most influential constituent on the S&P 500, was up as much as 1.3% at 4 1/2-year highs earlier in the session. However, the overwhelmingly bearish bias eventually weighed on the software giant as investors growing nervous about tonight's Q2 report closed the stock at its worst level of the day and down 2.1%.
On a positive note, oil prices plunged 2.1% to close at $54.23/bbl, but subsequent absence of leadership from Energy (-2.0%) -- today's worst performing sector -- and the failure of transportation stocks to take notice raised another wall of worry about current valuations. Sure, the bulk of earnings reports were again better than expected today; but the percentage of those beating estimates (~55%) running below normal (65-70%), and the number of blowout reports not as large as in recent quarters, merely fed into underlying worries about decelerating profit growth. BTK -1.4% DJ30 -119.21 DJTA -1.4% DJUA -0.6% DOT -0.8% NASDAQ -32.04 NQ100 -1.4% R2K -1.3% SOX -0.5% SP400 1.2% SP500 -16.23 XOI -2.1% NASDAQ Dec/Adv/Vol 2146/883/2.15 bln NYSE Dec/Adv/Vol 2551/771/1.70 bln
3:30 pm : More of the same for stocks as all three major indices remain on pace to snap a two-day winning streak. The Dow has now joined the S&P 500 and Nasdaq lower with a decline of at least 1.0%; 29 of 30 components are trading lower. Among virtually every industry group that is now on the defensive, Homebuilding (-3.4%) is today's worst performer. As if Beazer Homes (BZH 44.43 -2.58) swinging to a Q1 loss and guiding FY07 EPS well below forecasts wasn't bad enough, the homebuilder also saying they have "yet to see any meaningful evidence of a sustainable recovery in the housing market" has completely overshadowed today's otherwise decent housing report. Bond yields climbing to five-month highs has also weighed on the rate-sensitive group. ..HGX -2.5%.DJ30 -125.78 NASDAQ -33.10 SP500 -16.67 NASDAQ Dec/Adv/Vol 2175/831/1.86 bln NYSE Dec/Adv/Vol 2551/740/1.38 bln
3:00 pm : Sellers remain in complete control of the action heading into the final hour of trading. As reflected in the A/D line, decliners holding a more than 3-to-1 edge over advancers on the NYSE, and a more than 2-to-1 margin on the Nasdaq, further reflects the uphill battle bulls are facing at the moment. A wider ratio of down to up volume paints an even more dismal picture at both the Big Board and the Composite.DJ30 -110.31 NASDAQ -29.40 SP500 -14.40 NASDAQ Dec/Adv/Vol 844/2136/1.69 bln NYSE Dec/Adv/Vol 2504/758/1.26 bln
2:30 pm : The bottom continues to fall out of the market as the major averages slip even deeper into negative territory. The Dow and S&P 500 have now completely erased yesterday's respective 0.7% and 0.9% gains, as they break through technical levels of 12510 and 1430. The Nasdaq (-1.2%), which recently failed to find key support near 2438, now leaves it within just 0.2% of also relinquishing everything it made Wednesday.DJ30 -120.88 NASDAQ -32.18 SP500 -15.28 NASDAQ Dec/Adv/Vol 2093/892/1.54 bln NYSE Dec/Adv/Vol 2449/816/1.14 bln
2:00 pm : After some initial hesitation following the recent spike in bond yields, all three of the major averages are now taking a bearish cue from the sell-off in Treasuries and making fresh session lows. Faring even worse than large-cap names are small and mid-cap companies, which is not all that surprising since they are typically more dependent on borrowing. The Russell 2000 Index is now in negative territory for the year. Since higher interest rates spark valuation concerns among growth stocks, Technology also finds itself under some additional profit-taking pressure. That is especially evident on the Nasdaq, which has now given back more than half of Wednesday's 1.4% advance.DJ30 -90.53 NASDAQ -22.77 NQ100 -0.9% R2K -1.1% SP400 -1.0% SP500 -11.46 NASDAQ Dec/Adv/Vol 1963/1006/1.38 bln NYSE Dec/Adv/Vol 2295/940/1.00 bln
1:30 pm : Not much has changed since the last update as stocks appear to be settling into a relatively narrow range. Bonds, however, are extending their reach to the downside following a weaker than expected auction. At the top of the hour, a $13 bln auction of new 5-year Treasury notes attracted a meager 21.8% indirect bidder participation rate, exacerbating earlier weakness sparked by further proof of stabilization in the housing market. Throw in the fact that fed funds futures now price in no chance of an interest cut through the first half of 2007 and the yield on the 10-year note (-15/32) now stands at a five-month high (4.86%). DJ30 -50.32 NASDAQ -16.15 SP500 -7.91 NASDAQ Dec/Adv/Vol 1896/1015/1.27 bln NYSE Dec/Adv/Vol 2253/952/930 mln
1:00 pm : The indices are bouncing off their early afternoon lows, but the absence of spirited leadership from a number of blue chips remains an obstacle for the bulls. On the Dow, 22 of 30 components are trading lower. McDonald's (MCD 43.55 -0.61) paces the way lower, nearly matching yesterday's 1.5% sell-on-the-news decline following record Q4 results. Other blue chips down at least 1% include AIG, AXP, HD, VZ, and XOM. DJ30 -50.79 NASDAQ -16.52 SP500 -7.94 NASDAQ Dec/Adv/Vol 1911/980/1.18 bln NYSE Dec/Adv/Vol 2210/945/858 mln
12:30 pm : Selling remains the name of the game heading into the afternoon session as all 10 sectors are now in the red. Technology and Materials were the only two areas showing relative strength 30 minutes ago, but both have recently turned negative. That's not entirely surprising since both sectors were also among yesterday's best performers averaging a gain of 1.5%. Further deterioration in the Energy sector (-1.5%), as oil prices spike to session lows (-1.5%) near $54.50/bbl, also removes some notable leadership.DJ30 -55.08 NASDAQ -18.94 SP500 -8.77 NASDAQ Dec/Adv/Vol 1911/958/1.06 bln NYSE Dec/Adv/Vol 2196/950/764 mln
12:00 pm : For a second straight day, investors have digested another round of better than expected results and upbeat developments coming out of Technology.
Dow component AT&T (T 36.90 +0.27) has been today's headliner, opening at a multi-year high after beating expectations and also guiding double-digit EPS growth this year and next. Surprisingly strong reports from eBay (EBAY 33.14 +3.14), a suggested holding in the Briefing.com Active Portfolio which is up 10.5%, and Nokia (21.07 +0.86), are also lending some support for a sector that was left for dead last week (-3.4%).
Be that as it may, the Dow back in record territory, the S&P 500 finishing at six-year highs and the Nasdaq posting its largest one-day gain this year (+1.4%) a day earlier has just as ineffectively underpinned a sense of uneasiness.
Sure, yesterday's broad-based rally played into the argument that recent consolidation efforts may have been overdone, but such a dramatic surge in one session also leaves some questioning the sustainability of such a move to the upside. That's especially true since only 25% of the S&P 500 has reported quarterly results so far, the percentage of those beating expectations is running below normal and the number of blowout reports is not as large as in recent quarters, which feeds into underlying worries about decelerating profit growth.
Further evidence of stabilization in the housing market to suggest the so-called "soft landing" for the U.S. economy remains intact is also noteworthy. However, while inventories of unsold homes falling 7.9% and median price of homes sold holding steady should be treated as good news, Dec. existing home sales missing economists' forecasts has been viewed as a negative. When the report was released at 10:00 ET, the unexpected decline prompted a knee-jerk reaction in stocks that exacerbated the temptation to lock in some of yesterday's impressive gains.
Of the eight sectors trading lower, Energy is pacing the way (-1.2%). Downside guidance from BJ Services (BJS 27.09 -0.87) and Peabody Energy (BTU 39.61 -1.30) is weighing most heavily on the sector. Other weak spots include Financials, Consumer Discretionary and Industrials. The latter is under pressure in part after Textron's (TXT 92.92 -3.66) FY)& EPS outlook fell shy of expectations and Rockwell Automation (ROK 58.95 -1.55) said it sees slowing growth in Asia. BTK -1.1% DJ30 -43.42 DJTA -1.1% DJUA -0.1% NASDAQ -12.78 NQ100 -0.6% R2K -0.5% SOX +0.7% SP400 -0.9% SP500 -6.40 XOI -1.4% NASDAQ Dec/Adv/Vol 1782/1047/906 mln NYSE Dec/Adv/Vol 2099/985/660 mln
10:00 am : The major averages remain mixed as split industry leadership continues to dictate this morning's trading action. For a second straight day, Telecom (+0.8%) and Technology (+0.8%) are pacing the way to the upside, due in large part to AT&T's (T 37.59 +0.96) presence in both sectors. Unfortunately for the bulls, Materials -- which has the smallest weighting on the S&P 500 -- is the only other sector trading higher. The Energy sector is tumbling 1.2% as downside guidance from BJ Services (BJS 27.01 -0.95) and Peabody Energy (BTU 38.80 -2.11) prompts further rotation out of oil stocks and into beaten-down tech names. Oil prices are only down 0.2% and still above $55/bbl. DJ30 -13.94 NASDAQ +2.32 SOX +1.4% SP500 -1.62 XOI -0.9% NASDAQ Dec/Adv/Vol 1427/1052/216 mln NYSE Dec/Adv/Vol 1599/1037/108 mln
09:40 am : As expected, the indices open in split fashion as investors weigh the sustainability of yesterday's impressive rally against another round of better than expected results. Dow component AT&T (T 37.58 +0.95) has been today's headliner, opening at a multi-year high (+2.6%) after beating expectations and also guiding double-digit EPS growth this year and next. But blue-chip buyers overall are showing some reserve after the Dow hit record levels and the S&P 500 hit six-year highs yesterday.
The Nasdaq so far is another story as unexpectedly strong results from tech companies like eBay (EBAY 33.65 +3.65) and Qualcomm (QCOM 39.75 +1.13) lend some support for a sector that was left for dead last week (-3.4%). Index gains, however, are modest at best as investors also anxiously wait to see if the housing market is still showing signs of stabilization. Existing home sales will be out at the top of the hour. DJ30 -4.09 NASDAQ +2.73 SP500 -0.67 NASDAQ Vol 88 mln NYSE Vol 42 mln
09:15 am : S&P futures vs fair value: -0.3. Nasdaq futures vs fair value: +3.0.
09:00 am : S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: +1.6. Futures trade still shows a lack of conviction on the part of buyers and sellers, suggesting a mixed start for stocks. While yesterday's broad-based rally played into the argument that recent consolidation efforts are overdone, such a dramatic surge Wednesday also leaves some questioning the sustainability of such a move to the upside since only 25% of the S&P 500 has reported quarterly results so far. The percentage of those beating expectations running below normal and the number of blowout reports not as large as in recent quarters, which provide evidence of decelerating earnings growth, is also cause for concern.
08:33 am : S&P futures vs fair value: -1.0. Nasdaq futures vs fair value: +2.0. The Labor Dept. has just reported that initial claims rose a much stronger than expected 36,000 to 325,000 (consensus 310K). The initial response in both stocks and bonds, though, has been relatively muted since claims were expected to rebound after falling to their lowest level since last February a week earlier. Both S&P 500 and Nasdaq 100 futures continue to vacillate around the unchanged mark. The 10-year note, which was unchanged ahead of the report, remains flat yielding 4.80%.
08:00 am : S&P futures vs fair value: -1.4. Nasdaq futures vs fair value: +0.5. Early indications are pointing to a mixed open for stocks as investors continue to sift through a barrage of earnings reports. Dow component AT&T (T) looks to open at a five-year high as it headlines a list of other notable names (e.g. EBAY, QCOM, LMT, DOW, BAX, OXY, BMY, and NOK) topping expectations last night and this morning. Be that as it may, the Dow back in record territory, the S&P 500 finishing at six-year highs and the Nasdaq posting its largest one-day gain this year (+1.4%) yesterday are contributing to the hesitation on the part of investors.
After a two-day hiatus, economic data returning in the form of initial claims (8:30 ET) and existing home sales (10:00), which will provide updates on labor conditions and the health of housing, are also underpinning a sense of nervousness as futures trade continues to weaken.
http://biz.yahoo.com/mu/update.html
4:20 pm : Evidently, the absence of potentially troubling economic data a day earlier did help investors place more of an emphasis on the "good" news embedded in earnings reports because today's mixed earnings news and economic data dashing hopes of a Fed rate cut anytime soon took a toll on sentiment.
The major averages opened mixed as investors weighed the sustainability of yesterday's impressive rally against another round of better than expected results. Dow component AT&T (T 36.84 0.21) was the day's biggest name, opening at a multi-year high (+2.6%) after beating expectations and guiding for double-digit EPS growth this year and next. Nonetheless, blue-chip buyers began showing some reserve early on, especially after the Dow hit record levels and the S&P 500 hit six-year highs Wednesday.
The Nasdaq wasn't faring much better early on as it was clinging to a small gain following unexpectedly strong results from tech companies like eBay (EBAY 33.65 +3.65) and Qualcomm (QCOM 38.16 -0.46). eBay, a recommended holding in the Briefing.com Active Portfolio, was up as much as 18% last night following its encouraging Q4 report and still closed up 8%. Be that as it may, a two-day hiatus from any economic reports also left investors anxiously waiting to see if the housing market was still showing signs of stabilization.
Then, at 10:00 ET, existing home sales for December checked in shy of economists' forecasts and, for all of 2006, fell 8.4% -- the largest annual decline in 17 years. While that was responsible for a knee-jerk reaction in stocks that exacerbated the temptation to take some of yesterday's gains off the table, the worst was yet to come.
Fed funds futures, which were pricing in a nearly 50% rate cut before June, erased all expectations of a Fed easing. As a result, bonds began selling off, which lifted the yield on the 10-year note to five-month highs and left investors pricing in a more hawkish Fed stance just days before the next FOMC meeting. Such concerns weighed heavily on the rate-sensitive and influential Financials sector.
Since higher interest rates spark valuation concerns among growth stocks, Technology found itself under some additional profit-taking pressure. That was especially evident on the tech-heavy Nasdaq, which surrendered nearly all of Wednesday's 1.4% advance. In fact, Microsoft (MSFT 30.45 -0.64), which is also a Dow component and the fourth most influential constituent on the S&P 500, was up as much as 1.3% at 4 1/2-year highs earlier in the session. However, the overwhelmingly bearish bias eventually weighed on the software giant as investors growing nervous about tonight's Q2 report closed the stock at its worst level of the day and down 2.1%.
On a positive note, oil prices plunged 2.1% to close at $54.23/bbl, but subsequent absence of leadership from Energy (-2.0%) -- today's worst performing sector -- and the failure of transportation stocks to take notice raised another wall of worry about current valuations. Sure, the bulk of earnings reports were again better than expected today; but the percentage of those beating estimates (~55%) running below normal (65-70%), and the number of blowout reports not as large as in recent quarters, merely fed into underlying worries about decelerating profit growth. BTK -1.4% DJ30 -119.21 DJTA -1.4% DJUA -0.6% DOT -0.8% NASDAQ -32.04 NQ100 -1.4% R2K -1.3% SOX -0.5% SP400 1.2% SP500 -16.23 XOI -2.1% NASDAQ Dec/Adv/Vol 2146/883/2.15 bln NYSE Dec/Adv/Vol 2551/771/1.70 bln
3:30 pm : More of the same for stocks as all three major indices remain on pace to snap a two-day winning streak. The Dow has now joined the S&P 500 and Nasdaq lower with a decline of at least 1.0%; 29 of 30 components are trading lower. Among virtually every industry group that is now on the defensive, Homebuilding (-3.4%) is today's worst performer. As if Beazer Homes (BZH 44.43 -2.58) swinging to a Q1 loss and guiding FY07 EPS well below forecasts wasn't bad enough, the homebuilder also saying they have "yet to see any meaningful evidence of a sustainable recovery in the housing market" has completely overshadowed today's otherwise decent housing report. Bond yields climbing to five-month highs has also weighed on the rate-sensitive group. ..HGX -2.5%.DJ30 -125.78 NASDAQ -33.10 SP500 -16.67 NASDAQ Dec/Adv/Vol 2175/831/1.86 bln NYSE Dec/Adv/Vol 2551/740/1.38 bln
3:00 pm : Sellers remain in complete control of the action heading into the final hour of trading. As reflected in the A/D line, decliners holding a more than 3-to-1 edge over advancers on the NYSE, and a more than 2-to-1 margin on the Nasdaq, further reflects the uphill battle bulls are facing at the moment. A wider ratio of down to up volume paints an even more dismal picture at both the Big Board and the Composite.DJ30 -110.31 NASDAQ -29.40 SP500 -14.40 NASDAQ Dec/Adv/Vol 844/2136/1.69 bln NYSE Dec/Adv/Vol 2504/758/1.26 bln
2:30 pm : The bottom continues to fall out of the market as the major averages slip even deeper into negative territory. The Dow and S&P 500 have now completely erased yesterday's respective 0.7% and 0.9% gains, as they break through technical levels of 12510 and 1430. The Nasdaq (-1.2%), which recently failed to find key support near 2438, now leaves it within just 0.2% of also relinquishing everything it made Wednesday.DJ30 -120.88 NASDAQ -32.18 SP500 -15.28 NASDAQ Dec/Adv/Vol 2093/892/1.54 bln NYSE Dec/Adv/Vol 2449/816/1.14 bln
2:00 pm : After some initial hesitation following the recent spike in bond yields, all three of the major averages are now taking a bearish cue from the sell-off in Treasuries and making fresh session lows. Faring even worse than large-cap names are small and mid-cap companies, which is not all that surprising since they are typically more dependent on borrowing. The Russell 2000 Index is now in negative territory for the year. Since higher interest rates spark valuation concerns among growth stocks, Technology also finds itself under some additional profit-taking pressure. That is especially evident on the Nasdaq, which has now given back more than half of Wednesday's 1.4% advance.DJ30 -90.53 NASDAQ -22.77 NQ100 -0.9% R2K -1.1% SP400 -1.0% SP500 -11.46 NASDAQ Dec/Adv/Vol 1963/1006/1.38 bln NYSE Dec/Adv/Vol 2295/940/1.00 bln
1:30 pm : Not much has changed since the last update as stocks appear to be settling into a relatively narrow range. Bonds, however, are extending their reach to the downside following a weaker than expected auction. At the top of the hour, a $13 bln auction of new 5-year Treasury notes attracted a meager 21.8% indirect bidder participation rate, exacerbating earlier weakness sparked by further proof of stabilization in the housing market. Throw in the fact that fed funds futures now price in no chance of an interest cut through the first half of 2007 and the yield on the 10-year note (-15/32) now stands at a five-month high (4.86%). DJ30 -50.32 NASDAQ -16.15 SP500 -7.91 NASDAQ Dec/Adv/Vol 1896/1015/1.27 bln NYSE Dec/Adv/Vol 2253/952/930 mln
1:00 pm : The indices are bouncing off their early afternoon lows, but the absence of spirited leadership from a number of blue chips remains an obstacle for the bulls. On the Dow, 22 of 30 components are trading lower. McDonald's (MCD 43.55 -0.61) paces the way lower, nearly matching yesterday's 1.5% sell-on-the-news decline following record Q4 results. Other blue chips down at least 1% include AIG, AXP, HD, VZ, and XOM. DJ30 -50.79 NASDAQ -16.52 SP500 -7.94 NASDAQ Dec/Adv/Vol 1911/980/1.18 bln NYSE Dec/Adv/Vol 2210/945/858 mln
12:30 pm : Selling remains the name of the game heading into the afternoon session as all 10 sectors are now in the red. Technology and Materials were the only two areas showing relative strength 30 minutes ago, but both have recently turned negative. That's not entirely surprising since both sectors were also among yesterday's best performers averaging a gain of 1.5%. Further deterioration in the Energy sector (-1.5%), as oil prices spike to session lows (-1.5%) near $54.50/bbl, also removes some notable leadership.DJ30 -55.08 NASDAQ -18.94 SP500 -8.77 NASDAQ Dec/Adv/Vol 1911/958/1.06 bln NYSE Dec/Adv/Vol 2196/950/764 mln
12:00 pm : For a second straight day, investors have digested another round of better than expected results and upbeat developments coming out of Technology.
Dow component AT&T (T 36.90 +0.27) has been today's headliner, opening at a multi-year high after beating expectations and also guiding double-digit EPS growth this year and next. Surprisingly strong reports from eBay (EBAY 33.14 +3.14), a suggested holding in the Briefing.com Active Portfolio which is up 10.5%, and Nokia (21.07 +0.86), are also lending some support for a sector that was left for dead last week (-3.4%).
Be that as it may, the Dow back in record territory, the S&P 500 finishing at six-year highs and the Nasdaq posting its largest one-day gain this year (+1.4%) a day earlier has just as ineffectively underpinned a sense of uneasiness.
Sure, yesterday's broad-based rally played into the argument that recent consolidation efforts may have been overdone, but such a dramatic surge in one session also leaves some questioning the sustainability of such a move to the upside. That's especially true since only 25% of the S&P 500 has reported quarterly results so far, the percentage of those beating expectations is running below normal and the number of blowout reports is not as large as in recent quarters, which feeds into underlying worries about decelerating profit growth.
Further evidence of stabilization in the housing market to suggest the so-called "soft landing" for the U.S. economy remains intact is also noteworthy. However, while inventories of unsold homes falling 7.9% and median price of homes sold holding steady should be treated as good news, Dec. existing home sales missing economists' forecasts has been viewed as a negative. When the report was released at 10:00 ET, the unexpected decline prompted a knee-jerk reaction in stocks that exacerbated the temptation to lock in some of yesterday's impressive gains.
Of the eight sectors trading lower, Energy is pacing the way (-1.2%). Downside guidance from BJ Services (BJS 27.09 -0.87) and Peabody Energy (BTU 39.61 -1.30) is weighing most heavily on the sector. Other weak spots include Financials, Consumer Discretionary and Industrials. The latter is under pressure in part after Textron's (TXT 92.92 -3.66) FY)& EPS outlook fell shy of expectations and Rockwell Automation (ROK 58.95 -1.55) said it sees slowing growth in Asia. BTK -1.1% DJ30 -43.42 DJTA -1.1% DJUA -0.1% NASDAQ -12.78 NQ100 -0.6% R2K -0.5% SOX +0.7% SP400 -0.9% SP500 -6.40 XOI -1.4% NASDAQ Dec/Adv/Vol 1782/1047/906 mln NYSE Dec/Adv/Vol 2099/985/660 mln
10:00 am : The major averages remain mixed as split industry leadership continues to dictate this morning's trading action. For a second straight day, Telecom (+0.8%) and Technology (+0.8%) are pacing the way to the upside, due in large part to AT&T's (T 37.59 +0.96) presence in both sectors. Unfortunately for the bulls, Materials -- which has the smallest weighting on the S&P 500 -- is the only other sector trading higher. The Energy sector is tumbling 1.2% as downside guidance from BJ Services (BJS 27.01 -0.95) and Peabody Energy (BTU 38.80 -2.11) prompts further rotation out of oil stocks and into beaten-down tech names. Oil prices are only down 0.2% and still above $55/bbl. DJ30 -13.94 NASDAQ +2.32 SOX +1.4% SP500 -1.62 XOI -0.9% NASDAQ Dec/Adv/Vol 1427/1052/216 mln NYSE Dec/Adv/Vol 1599/1037/108 mln
09:40 am : As expected, the indices open in split fashion as investors weigh the sustainability of yesterday's impressive rally against another round of better than expected results. Dow component AT&T (T 37.58 +0.95) has been today's headliner, opening at a multi-year high (+2.6%) after beating expectations and also guiding double-digit EPS growth this year and next. But blue-chip buyers overall are showing some reserve after the Dow hit record levels and the S&P 500 hit six-year highs yesterday.
The Nasdaq so far is another story as unexpectedly strong results from tech companies like eBay (EBAY 33.65 +3.65) and Qualcomm (QCOM 39.75 +1.13) lend some support for a sector that was left for dead last week (-3.4%). Index gains, however, are modest at best as investors also anxiously wait to see if the housing market is still showing signs of stabilization. Existing home sales will be out at the top of the hour. DJ30 -4.09 NASDAQ +2.73 SP500 -0.67 NASDAQ Vol 88 mln NYSE Vol 42 mln
09:15 am : S&P futures vs fair value: -0.3. Nasdaq futures vs fair value: +3.0.
09:00 am : S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: +1.6. Futures trade still shows a lack of conviction on the part of buyers and sellers, suggesting a mixed start for stocks. While yesterday's broad-based rally played into the argument that recent consolidation efforts are overdone, such a dramatic surge Wednesday also leaves some questioning the sustainability of such a move to the upside since only 25% of the S&P 500 has reported quarterly results so far. The percentage of those beating expectations running below normal and the number of blowout reports not as large as in recent quarters, which provide evidence of decelerating earnings growth, is also cause for concern.
08:33 am : S&P futures vs fair value: -1.0. Nasdaq futures vs fair value: +2.0. The Labor Dept. has just reported that initial claims rose a much stronger than expected 36,000 to 325,000 (consensus 310K). The initial response in both stocks and bonds, though, has been relatively muted since claims were expected to rebound after falling to their lowest level since last February a week earlier. Both S&P 500 and Nasdaq 100 futures continue to vacillate around the unchanged mark. The 10-year note, which was unchanged ahead of the report, remains flat yielding 4.80%.
08:00 am : S&P futures vs fair value: -1.4. Nasdaq futures vs fair value: +0.5. Early indications are pointing to a mixed open for stocks as investors continue to sift through a barrage of earnings reports. Dow component AT&T (T) looks to open at a five-year high as it headlines a list of other notable names (e.g. EBAY, QCOM, LMT, DOW, BAX, OXY, BMY, and NOK) topping expectations last night and this morning. Be that as it may, the Dow back in record territory, the S&P 500 finishing at six-year highs and the Nasdaq posting its largest one-day gain this year (+1.4%) yesterday are contributing to the hesitation on the part of investors.
After a two-day hiatus, economic data returning in the form of initial claims (8:30 ET) and existing home sales (10:00), which will provide updates on labor conditions and the health of housing, are also underpinning a sense of nervousness as futures trade continues to weaken.
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