AI
Monday, February 12, 2007 5:29:35 PM
Market Update 070212
http://biz.yahoo.com/mu/update.html
4:20 pm : The selling continued Monday as investors weighed ongoing uncertainty about Fed policy and the collapse of some noteworthy M&A deals against a sell-off in oil.
Per usual for a Monday, there was some acquisition news to digest. Home Depot (HD 41.48 +0.48) mulling the spin-off, IPO, or even a sale of its HD Supply unit had the Dow component up as much as 2.5% at one point. Vodaphone (VOD 29.53 +0.58) won a majority stake in Hutchison Essar for $11.1 bln. Hindalco Industries agreed to buy Alcan spin-off Novelis (NVL 43.67 +5.13) for $6 bln -- a sizable 16% premium on top of two weeks of takeover speculation.
However, reports that Sanofi-Aventis (SNY 44.29 +0.51) called off merger talks with Bristol-Myers (BMY 27.59 -0.93) and that the Nasdaq (NDAQ 35.10 -2.10) failed again to get shareholder approval for its hostile takeover of the London Stock Exchange left investors questioning valuations and the market's weakening fundamentals.
Stocks running virtually unabated since July of last year, without any real setback, has raised concerns that a correction is coming; worries that we believe will make it difficult for any sustained move to the upside in the near-term.
Market participants also erred on the side of caution as they awaited clues about the interest rate outlook. All eyes this week will be on Fed Chairman Bernanke as he goes before the Senate and House Committees Wednesday and Thursday, respectively, to provide his semi-annual testimony on the economy and monetary policy.
As a reminder, now that 75% of S&P 500 constituents have reported quarterly results, the focus has shifted from Q4 earnings to the general economic outlook.
On a positive note, oil prices plunged 4.0% and closed near $57.50/bbl after briefly eclipsing the psychologically important $60/bbl mark on Friday. Crude for March delivery was initially under pressure after the Saudi oil minister suggested production cuts may not be necessary; but the commodity's decline was exacerbated by this year's biggest one-day decline (-7.6%) in natural gas futures.
As one might expect, the oil price retreat weighed on the Energy sector, which was the day's worst-performing economic sector with a loss of 1.20%. BTK -1.0% DJ30 -28.28 DJTA +0.4% DJUA -0.1% DOT -0.4% NASDAQ -9.44 NQ100 -0.4% R2K -0.1% SOX -1.0% SP400 -0.3% SP500 -4.69 XOI -1.3% NASDAQ Dec/Adv/Vol 1740/1326/1.87 bln NYSE Dec/Adv/Vol 2004/1259/1.26 bln
3:30 pm : The major averages are paring some of their losses going into the close, but market breadth remains decidedly negative. As reflected in the A/D line, decliners on the NYSE still hold a nearly 2-to-1 edge over advancers. However, with only 1.0 bln shares having exchanged hands with only 30 minutes left in the trading day, below average volume on the Big Board lends little conviction on the part of buyers' last ditch efforts.DJ30 -25.40 NASDAQ -8.76 SP500 -3.94 NASDAQ Dec/Adv/Vol 1872/1168/1.54 bln NYSE Dec/Adv/Vol 2093/1141/1.00 bln
10:00 am : The major averages are now mixed as split industry leadership dictates this morning's lackluster action. Among the five sectors attracting buyers, the only sector posting a noticeable gain is Materials (+0.6%), which is also the least influential of the 10 S&P 500 sectors. Of the five trading lower, Energy paces the way (-0.6%) in sympathy with oil prices slipping below $59/bbl (-1.5%) while the failure by Technology to bounce back following Friday's 1.3% sell-off further underscores the early sense of apprehension.DJ30 +10.66 NASDAQ -7.46 SP500 -1.09 NASDAQ Dec/Adv/Vol 1206/1300/150 mln NYSE Dec/Adv/Vol 1058/1123/54 mln
09:40 am : Stocks open with little fanfare as investors sift through some mixed M&A news. Home Depot (HD 41.70 +0.70) mulling the spin-off or sale of its HD Supply unit has the Dow component up nearly 2%. Other deals making headlines include Vodaphone (VOD 29.60 +0.65) winning a majority stake in Hutchison Essar for $11.1 bln, Hindalco Industries buying Alcan spinoff Novelis (NVL 44.01 +5.47) for $6 bln and Four Seasons (FS 81.51 -2.37) accepting a $3.8 bln buyout.
However, since none of today's deals were blockbusters, investors continue to err on the side of caution and question the market's weakening fundamentals. Reports that Sanofi-Aventis (SNY 44.13 +0.35) called off merger talks with Bristol-Myers (BMY 27.19 -1.33) and Nasdaq (NDAQ 36.20 -1.00) has failed again to get shareholder approval for its hostile takeover of the London Stock Exchange also diminish the impact of other deals. DJ30 +14.64 NASDAQ +0.16 SP500 +0.65 NASDAQ Vol 88 mln NYSE Vol 44 mln
09:15 am : S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: -1.6.
09:00 am : S&P futures vs fair value: +0.1. Nasdaq futures vs fair value: -1.6. Equities are slated for a sluggish start as futures indications continue to vacillate around the unchanged mark. While the Dow last week failed to hold above the 12,700 level, Home Depot (HD) evaluating strategic alternatives for its HD Supply business (i.e. a possible sale, spin-off or IPO) is providing some blue-chip support, as is an analyst upgrade on fellow Dow component (Disney).
Tech stocks will also be in focus following upgrades on Apple (AAPL) and Adobe (ADBE) and after Qualcomm (QCOM) inked a deal with AT&T (T); but it remains to be seen if such company-specific news will have an impact on the rest of the influential tech sector since Nasdaq 100 futures have slipped back below fair value.
http://biz.yahoo.com/mu/update.html
4:20 pm : The selling continued Monday as investors weighed ongoing uncertainty about Fed policy and the collapse of some noteworthy M&A deals against a sell-off in oil.
Per usual for a Monday, there was some acquisition news to digest. Home Depot (HD 41.48 +0.48) mulling the spin-off, IPO, or even a sale of its HD Supply unit had the Dow component up as much as 2.5% at one point. Vodaphone (VOD 29.53 +0.58) won a majority stake in Hutchison Essar for $11.1 bln. Hindalco Industries agreed to buy Alcan spin-off Novelis (NVL 43.67 +5.13) for $6 bln -- a sizable 16% premium on top of two weeks of takeover speculation.
However, reports that Sanofi-Aventis (SNY 44.29 +0.51) called off merger talks with Bristol-Myers (BMY 27.59 -0.93) and that the Nasdaq (NDAQ 35.10 -2.10) failed again to get shareholder approval for its hostile takeover of the London Stock Exchange left investors questioning valuations and the market's weakening fundamentals.
Stocks running virtually unabated since July of last year, without any real setback, has raised concerns that a correction is coming; worries that we believe will make it difficult for any sustained move to the upside in the near-term.
Market participants also erred on the side of caution as they awaited clues about the interest rate outlook. All eyes this week will be on Fed Chairman Bernanke as he goes before the Senate and House Committees Wednesday and Thursday, respectively, to provide his semi-annual testimony on the economy and monetary policy.
As a reminder, now that 75% of S&P 500 constituents have reported quarterly results, the focus has shifted from Q4 earnings to the general economic outlook.
On a positive note, oil prices plunged 4.0% and closed near $57.50/bbl after briefly eclipsing the psychologically important $60/bbl mark on Friday. Crude for March delivery was initially under pressure after the Saudi oil minister suggested production cuts may not be necessary; but the commodity's decline was exacerbated by this year's biggest one-day decline (-7.6%) in natural gas futures.
As one might expect, the oil price retreat weighed on the Energy sector, which was the day's worst-performing economic sector with a loss of 1.20%. BTK -1.0% DJ30 -28.28 DJTA +0.4% DJUA -0.1% DOT -0.4% NASDAQ -9.44 NQ100 -0.4% R2K -0.1% SOX -1.0% SP400 -0.3% SP500 -4.69 XOI -1.3% NASDAQ Dec/Adv/Vol 1740/1326/1.87 bln NYSE Dec/Adv/Vol 2004/1259/1.26 bln
3:30 pm : The major averages are paring some of their losses going into the close, but market breadth remains decidedly negative. As reflected in the A/D line, decliners on the NYSE still hold a nearly 2-to-1 edge over advancers. However, with only 1.0 bln shares having exchanged hands with only 30 minutes left in the trading day, below average volume on the Big Board lends little conviction on the part of buyers' last ditch efforts.DJ30 -25.40 NASDAQ -8.76 SP500 -3.94 NASDAQ Dec/Adv/Vol 1872/1168/1.54 bln NYSE Dec/Adv/Vol 2093/1141/1.00 bln
10:00 am : The major averages are now mixed as split industry leadership dictates this morning's lackluster action. Among the five sectors attracting buyers, the only sector posting a noticeable gain is Materials (+0.6%), which is also the least influential of the 10 S&P 500 sectors. Of the five trading lower, Energy paces the way (-0.6%) in sympathy with oil prices slipping below $59/bbl (-1.5%) while the failure by Technology to bounce back following Friday's 1.3% sell-off further underscores the early sense of apprehension.DJ30 +10.66 NASDAQ -7.46 SP500 -1.09 NASDAQ Dec/Adv/Vol 1206/1300/150 mln NYSE Dec/Adv/Vol 1058/1123/54 mln
09:40 am : Stocks open with little fanfare as investors sift through some mixed M&A news. Home Depot (HD 41.70 +0.70) mulling the spin-off or sale of its HD Supply unit has the Dow component up nearly 2%. Other deals making headlines include Vodaphone (VOD 29.60 +0.65) winning a majority stake in Hutchison Essar for $11.1 bln, Hindalco Industries buying Alcan spinoff Novelis (NVL 44.01 +5.47) for $6 bln and Four Seasons (FS 81.51 -2.37) accepting a $3.8 bln buyout.
However, since none of today's deals were blockbusters, investors continue to err on the side of caution and question the market's weakening fundamentals. Reports that Sanofi-Aventis (SNY 44.13 +0.35) called off merger talks with Bristol-Myers (BMY 27.19 -1.33) and Nasdaq (NDAQ 36.20 -1.00) has failed again to get shareholder approval for its hostile takeover of the London Stock Exchange also diminish the impact of other deals. DJ30 +14.64 NASDAQ +0.16 SP500 +0.65 NASDAQ Vol 88 mln NYSE Vol 44 mln
09:15 am : S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: -1.6.
09:00 am : S&P futures vs fair value: +0.1. Nasdaq futures vs fair value: -1.6. Equities are slated for a sluggish start as futures indications continue to vacillate around the unchanged mark. While the Dow last week failed to hold above the 12,700 level, Home Depot (HD) evaluating strategic alternatives for its HD Supply business (i.e. a possible sale, spin-off or IPO) is providing some blue-chip support, as is an analyst upgrade on fellow Dow component (Disney).
Tech stocks will also be in focus following upgrades on Apple (AAPL) and Adobe (ADBE) and after Qualcomm (QCOM) inked a deal with AT&T (T); but it remains to be seen if such company-specific news will have an impact on the rest of the influential tech sector since Nasdaq 100 futures have slipped back below fair value.
Discover What Traders Are Watching
Explore small cap ideas before they hit the headlines.
