AI
Tuesday, March 13, 2007 4:32:31 PM
Market Update 070312
4:20 pm : Stocks tumbled Tuesday as an overly pessimistic market exaggerated everything from the implications of an unwinding in the yen carry trade to potential defaults by subprime lenders spilling over into an economy that again showed signs of slowing.
Before the bell, February retail sales rose just 0.1% (consensus 0.3%) while the more closely-watched sales, ex-autos, unexpectedly fell 0.1% (consensus 0.3%). Both figures pressured a market already extremely sensitive to signs of potential economic weakness even though unseasonably cold weather was a likely cause for the soft report. It is also worth noting that the data won't alter expectations of about 2% real GDP growth in Q1.
However, with subprime mortgage worries acting as an overhang for weeks now, more negative developments in the space took a weak stock market and made it even weaker provided a perfect excuse for sellers to take some money off the table following three straight days of gains for the Dow and S&P 500.
Accredited Home Lenders (LEND 3.97 -7.43) was the latest company in the subprime lineup to warn of such difficulties, saying it needs to raise new funds to cover the risk of default. The stock plunged nearly 70%. Adding insult to injury was Countrywide Financial (CFC 33.49 -1.65) CEO saying on CNBC that the subprime issue becoming "liquidity crisis."
But the straw that broke the backs of buyers today was a report midday from the Mortgage Bankers Association which showed delinquencies among subprime borrowers hit 13.3% in the fourth quarter. That was the highest rate in more than four years and overshadowed a blowout report from Goldman Sachs (GS 199.03 -3.57) that discounted the overall impact of something we believe isn't going to have a material impact on the economy.
Nonetheless, the damage was done as a 3.2% sell-off in the most influential of all S&P sectors -- Financials -- pulled the rug out of the market and left buyers sidelined into the close. The Dow, S&P 500 and Nasdaq plunged at least 2.0%, forcing the NYSE to institute downside trading curbs. Of the 147 S&P industry groups, 146 posted losses.
Further underscoring the widespread bearish tone were huge gains of 31% and 19% on the VIX (CBOE Volatility Index) and the VXN (CBOE Nasdaq Volatility Index), respectively. Both "investor fear gauges" closing at session highs, suggesting investors were actively buying put protection, heighten the anxiety that has been priced into stocks ever since the "Shanghai Surprise" roiled global equity markets two weeks ago today. DJ30 -242.66 NASDAQ -51.72 SP500 -28.65 NASDAQ Dec/Adv/Vol 2542/553/2.15 bln NYSE Dec/Adv/Vol 2753/587/1.93 bln
3:30 pm : Recent recovery efforts were very short-lived as a renewed wave of selling interest going into the close push the major averages to fresh session lows and force the NYSE to institute downside trading curbs. Further deterioration in market breadth is echoing the sense of anxiety on the part of buyers as decliners now hold a more than 4-to-1 edge over advancers on both the NYSE and the NYSE.
All three indices plunging roughly in synch with each other and logging roughly the same percentage declines (-1.7%) suggests that program trading is behind today’s broad-based move to the downsideDJ30 -210.09 NASDAQ -41.57 SP500 -24.00 NASDAQ Dec/Adv/Vol 2488/559/1.76 bln NYSE Dec/Adv/Vol 2694/608/1.49 bln
3:00 pm : The indices are bouncing off session lows but not nearly enough to make a significant change in the standings. Stocks are still noticeably weak across the board, led by a 2.6% drubbing in the Financials sector. With a more than 22% weighting on the S&P 500, the absence of its leadership is very noteworthy.
Problems in the subprime mortgage market continue to weigh heavily on overall sentiment. More than 90% of the S&P 500 trading lower suggest investors limping into the final hour of trading will be hard pressed to see much more in the way of a recovery. DJ30 -175.45 NASDAQ -38.77 SP500 -21.46 NASDAQ Dec/Adv/Vol 2448/563/1.59 bln NYSE Dec/Adv/Vol 2674/623/1.33 bln
2:30 pm : Selling remains the name of the game as all 10 sectors are now negative. While crude oil turning negative within the last 30 minutes and now at session lows (-1.6%) below $58/bbl is a net positive for consumers, oil's recent plunge is also removing what little support the market was getting from Energy earlier. The sector is now down nearly 1%.
As an aside, Dow component General Motors (GM 30.27 -1.05) is now down 3.4% after saying GMAC's severely depressed nonprime portfolio will constrain overall results exacerbates underlying concerns about subprime mortgage misfortunes spilling over into the broader economy. DJ30 -192.75 NASDAQ -44.04 SP500 -23.46 NASDAQ Dec/Adv/Vol 2434/555/1.44 bln NYSE Dec/Adv/Vol 2640/630/1.18 bln
2:00 pm : Sellers remain an active bunch as the indices extend their reach to the downside. Further underscoring the bearish tone have been huge gains of 20% and 13% on the VIX (CBOE Volatility Index) and the VXN (CBOE Nasdaq Volatility Index), respectively.
Both "investor fear gauges" spiking to session highs, suggesting investors are actively buying put protection, heighten the anxiety that has been priced into stocks ever since the "Shanghai Surprise" roiled global equity markets two weeks ago today. DJ30 -164.73 NASDAQ -37.06 SP500 -19.72 NASDAQ Dec/Adv/Vol 2356/609/1.27 bln NYSE Dec/Adv/Vol 2562/695/1.03 bln
1:30 pm : Stocks continue to languish near their worst levels as market internals remain decidedly bearish. As reflected in the A/D line, decliners outpace advancers on both the NYSE and the NYSE by a more than 3-to-1 margin. The ratio of down to up volumes paints an even more negative picture at the Big Board and the Composite as buyers are very few and far between.
Of the 147 S&P industry groups, 140 are trading lower. The only winners today are tied primarily to Energy as oil prices hold onto a 1.0% intraday advance. The two exceptions are Food Retail (+0.7%), following Kroger's (KR 26.15 +0.39) solid Q4 report and upbeat guidance, and Drug Retail (+0.1%), which is benefiting from an analyst upgrade on CVS Corp (CVS 32.21 +0.23). The latter two are also known for their defensive characteristics in a down market.DJ30 -143.78 NASDAQ -32.58 SP500 -16.51 NASDAQ Dec/Adv/Vol 2265/671/1.14 bln NYSE Dec/Adv/Vol 2467/764/938 mln
1:00 pm : The bottom continues to fall out of stocks as sellers remain in complete control of the action. Adding to the market's recent struggles have been the indices' inability to find support near key technical levels of 12210, 1396 and 2374 on the Dow, S&P 500 and Nasdaq, respectively.
All three major averages are now down more than 1.0%, led by the tech-heavy Nasdaq's 1.3% decline. On the Dow, 28 of 30 components are trading lower. DJ30 -134.73 NASDAQ -33.23 SP500 -15.56 NASDAQ Dec/Adv/Vol 2263/656/1.00 bln NYSE Dec/Adv/Vol 2466/752/820 mln
12:30 pm : The market is taking a turn for the worse as the afternoon gets underway. The Financials sector is now down sharply (-1.7%) after the Mortgage Bankers Association (MBA) recently said delinquencies among subprime borrowers hit 13.33% in Q4, the highest rate since Q3 of 2002, while delinquencies among prime lenders rose 2.57% in Q4, the highest rate since Q2 of 2003.
Delinquency rates rose in 49 states in Q4, foreclosure inventory rates grew in 44 states and the MBA pushed back its forecast for the housing market to regain footing from the middle of the year to the end of 2007. As an aside, Goldman Sachs (GS 202.30 -0.30), which was up nearly 3% earlier following its blowout Q1 report, is now in negative territory. Technology, Industrials and Consumer Discretionary now posting declines of at least 1.0% also remove significant leadership for the broader market. DJ30 -108.87 NASDAQ -27.69 SP500 -12.62 NASDAQ Dec/Adv/Vol 2099/802/826 mln NYSE Dec/Adv/Vol 2204/964/670 mln
12:00 pm : After three consecutive days of gains for the Dow and S&P 500, sellers are finding excuses to take some money off the table midday.
A market still focused on everything negative is again exaggerating everything from the implications of an unwinding in the yen carry trade to potential defaults by subprime lenders spilling over into an economy that continues to show signs of slowing.
Before the bell, February retail sales rose just 0.1% (consensus 0.3%) while the more closely-watched sales, ex-autos, unexpectedly fell 0.1% (consensus 0.3%). Both figures are pressuring a market already extremely sensitive to signs of potential economic weakness even though it is likely that retail sales were held down by unseasonably cold weather. It is also worth noting that the data won't alter expectations of about 2% real GDP growth in Q1.
Meanwhile, Goldman Sachs' (GS 205.66 +3.06) has helped to put potentially overblown subprime concerns in perspective after citing weakness in the space but still handily topping Wall Street expectations with record earnings and saying the broader credit market remains strong. Nonetheless, weakness throughout the most influential of S&P sector of them all -- Financials -- is acting as a huge overhang for the broader market.
Consumer Discretionary is today's second worst performing sector. Homebuilders are getting hit on more subprime worries and after the National Association of Realtors saying that the new home market will feel additional pain over the next 12 months. Retailers are under pressure following soft monthly sales figures.
Technology has been in focus after Texas Instruments (TXN 32.02 -0.57) narrowed its Q1 revenue and earnings guidance. However, with shares up nearly 15% from the January lows and investors hoping for a more bullish outlook, the stock has succumbed to modest selling pressure and is offsetting raised Q2 guidance from Qualcomm (QCOM 42.08 +1.96). DJ30 -69.13 NASDAQ -15.28 SP500 -6.48 NASDAQ Dec/Adv/Vol 1959/859/696 mln NYSE Dec/Adv/Vol 2103/1042/572 mln
11:30 am : Equities are still on the defensive as the bulk of industry leadership remains negative. Weakness throughout Financials, which has now displaced Energy as this year's worst performing S&P sector (-3.9%), remains the biggest obstacle for the bulls to overcome this morning.
The influential sector accounts for the Dow's three worst performers today (e.g. AXP -1.15, C -1.2%, JPM -1.2%). Specialized Financials is today's worst performing S&P industry group after Moody's (MCO 59.65 -3.92) said it is suspending the rollout of its revised bank ratings. The stock has plunged 6%. DJ30 -60.31 NASDAQ -13.17 SP500 -5.69 NASDAQ Dec/Adv/Vol 1822/957/564 mln NYSE Dec/Adv/Vol 2002/1051/452 mln
11:00 am : The major averages continue to languish in negative territory as oil prices flirting with $60/bbl a day after slipping below the psychologically significant barrier provide sellers with another reason to consolidate gains.
Fortunately for the bulls, subsequent leadership in Energy, which is now up 1%, is helping to offset some of the commodity's potential risk to sustain inflation pressures. Of today's best performing S&P industry groups, Energy accounts for six of the top ten. Refiners (+1.9%), Drillers (+1.3%), Oil & Gas Equipment (+1.2%), Coal & Consumable Fuel (+1.1%), Explorers (+1.1%) and Integrated Oil (+0.6%). DJ30 -54.11 NASDAQ -8.45 SP500 -4.59 XOI +0.8% NASDAQ Dec/Adv/Vol 1848/884/442 mln NYSE Dec/Adv/Vol 2074/936/344 mln
10:30 am : More of the same for stocks as selling remains widespread across most areas. Bonds, though, continue to attract buyers. The 10-year note yield is down to 4.51% as traders price in an increased likelihood of the Fed cutting the overnight lending rate at its June meeting by 25 basis points following further evidence (i.e. Feb retail sales) of economic weakness.
Ongoing concerns that rising loan delinquencies may trigger defaults are also fueling a flight-to-quality bid in Treasuries that remains noticeably absent in the rate-sensitive Financials sector even in the face of falling bond yields. DJ30 -56.68 NASDAQ -9.29 SP500 -4.71 NASDAQ Dec/Adv/Vol 1883/793/334 mln NYSE Dec/Adv/Vol 2152/789/242 mln
10:00 am : The indices are off their opening lows but nine out of 10 sectors remain negative. For a second straight day, weakness throughout the most influential of them all -- Financials -- is acting as the biggest overhang for the broader market. Consumer Discretionary ranks a close second as a disappointing retail sales report earmarks Home Furniture (-1.9%), General Merchandise (-1.5%) and Home Furnishings (-1.3%) as three of today's top ten laggards.
Energy is the only sector attracting buyers; but it's gain is modest at best and it's coming at the expense of rising oil prices. Crude for April delivery is up more than 1% near $59.50/bbl after the IEA said it expects stockpiles in industrialized countries to see the largest Q1 decline in 10 years. DJ30 -55.32 NASDAQ -9.04 SP500 -5.80 NASDAQ Dec/Adv/Vol 1836/591/140 mln NYSE Dec/Adv/Vol 1917/472/64 mln
09:40 am : With the Dow and S&P 500 up for three straight days, it's not surprising to see stocks take a breather and the bears looking for reasons to lock in recent gains. A market still focused on everything negative is again exaggerating the implications of an unwinding in the yen carry trade that really doesn't alter the fundamental condition of U.S. companies at all. Goldman Sachs' (GS 203.87 +1.27) cited significant weakness in the subprime mortgage sector, but still had a blowout earnings report and noted the broader credit market remains strong, which helps to put such potentially overblown subprime concerns in perspective.
Another piece of modestly bad news being blown out of proportion is the modest 0.1% gain in February retail sales and an unexpected 0.1% decline in sales (ex autos). Both figures are pressuring a market already extremely sensitive to signs of potential economic weakness even though it is likely that sales were held down by unseasonably cold weather. It is also worth noting that the data won't alter expectations of about 2% real GDP growth in Q1. DJ30 -77.71 NASDAQ -16.07 SP500 -8.52 NASDAQ Vol 82 mln NYSE Vol 46 mln
09:15 am : S&P futures vs fair value: -8.9. Nasdaq futures vs fair value: -12.8.
09:00 am : S&P futures vs fair value: -8.8. Nasdaq futures vs fair value: -12.5. Still shaping up to be a weak open for the cash market as futures continue to languish well below fair value. Fears about the subprime business spilling over to the broader economy continue to weigh on investors' minds, especially after New Century Financial (NEW) said the SEC has subpoenaed documents in accounting probes and Accredited Home Lenders (LEND) said it needs to raise new funds to cover the risk of default. Goldman Sachs (GS) following up its record Q1 results by saying the broader credit market remains strong does help quell the worst of subprime worries but the news is barely helping to minimize early market losses.
08:33 am : S&P futures vs fair value: -9.2. Nasdaq futures vs fair value: -15.0. February retail sales rose just 0.1% (consensus 0.3%) while the more closely-watched sales, ex-autos, unexpectedly fell 0.1% (consensus 0.3%). With the market increasingly concerned about the pace of economic growth, the weaker than expected data exacerbate ongoing concerns about a slowdown. Bonds, in contrast, have strengthened as the 10-yr note is now up 13 ticks to yield 4.49% as traders price in an improved likelihood of a Fed rate cut.
.
4:20 pm : Stocks tumbled Tuesday as an overly pessimistic market exaggerated everything from the implications of an unwinding in the yen carry trade to potential defaults by subprime lenders spilling over into an economy that again showed signs of slowing.
Before the bell, February retail sales rose just 0.1% (consensus 0.3%) while the more closely-watched sales, ex-autos, unexpectedly fell 0.1% (consensus 0.3%). Both figures pressured a market already extremely sensitive to signs of potential economic weakness even though unseasonably cold weather was a likely cause for the soft report. It is also worth noting that the data won't alter expectations of about 2% real GDP growth in Q1.
However, with subprime mortgage worries acting as an overhang for weeks now, more negative developments in the space took a weak stock market and made it even weaker provided a perfect excuse for sellers to take some money off the table following three straight days of gains for the Dow and S&P 500.
Accredited Home Lenders (LEND 3.97 -7.43) was the latest company in the subprime lineup to warn of such difficulties, saying it needs to raise new funds to cover the risk of default. The stock plunged nearly 70%. Adding insult to injury was Countrywide Financial (CFC 33.49 -1.65) CEO saying on CNBC that the subprime issue becoming "liquidity crisis."
But the straw that broke the backs of buyers today was a report midday from the Mortgage Bankers Association which showed delinquencies among subprime borrowers hit 13.3% in the fourth quarter. That was the highest rate in more than four years and overshadowed a blowout report from Goldman Sachs (GS 199.03 -3.57) that discounted the overall impact of something we believe isn't going to have a material impact on the economy.
Nonetheless, the damage was done as a 3.2% sell-off in the most influential of all S&P sectors -- Financials -- pulled the rug out of the market and left buyers sidelined into the close. The Dow, S&P 500 and Nasdaq plunged at least 2.0%, forcing the NYSE to institute downside trading curbs. Of the 147 S&P industry groups, 146 posted losses.
Further underscoring the widespread bearish tone were huge gains of 31% and 19% on the VIX (CBOE Volatility Index) and the VXN (CBOE Nasdaq Volatility Index), respectively. Both "investor fear gauges" closing at session highs, suggesting investors were actively buying put protection, heighten the anxiety that has been priced into stocks ever since the "Shanghai Surprise" roiled global equity markets two weeks ago today. DJ30 -242.66 NASDAQ -51.72 SP500 -28.65 NASDAQ Dec/Adv/Vol 2542/553/2.15 bln NYSE Dec/Adv/Vol 2753/587/1.93 bln
3:30 pm : Recent recovery efforts were very short-lived as a renewed wave of selling interest going into the close push the major averages to fresh session lows and force the NYSE to institute downside trading curbs. Further deterioration in market breadth is echoing the sense of anxiety on the part of buyers as decliners now hold a more than 4-to-1 edge over advancers on both the NYSE and the NYSE.
All three indices plunging roughly in synch with each other and logging roughly the same percentage declines (-1.7%) suggests that program trading is behind today’s broad-based move to the downsideDJ30 -210.09 NASDAQ -41.57 SP500 -24.00 NASDAQ Dec/Adv/Vol 2488/559/1.76 bln NYSE Dec/Adv/Vol 2694/608/1.49 bln
3:00 pm : The indices are bouncing off session lows but not nearly enough to make a significant change in the standings. Stocks are still noticeably weak across the board, led by a 2.6% drubbing in the Financials sector. With a more than 22% weighting on the S&P 500, the absence of its leadership is very noteworthy.
Problems in the subprime mortgage market continue to weigh heavily on overall sentiment. More than 90% of the S&P 500 trading lower suggest investors limping into the final hour of trading will be hard pressed to see much more in the way of a recovery. DJ30 -175.45 NASDAQ -38.77 SP500 -21.46 NASDAQ Dec/Adv/Vol 2448/563/1.59 bln NYSE Dec/Adv/Vol 2674/623/1.33 bln
2:30 pm : Selling remains the name of the game as all 10 sectors are now negative. While crude oil turning negative within the last 30 minutes and now at session lows (-1.6%) below $58/bbl is a net positive for consumers, oil's recent plunge is also removing what little support the market was getting from Energy earlier. The sector is now down nearly 1%.
As an aside, Dow component General Motors (GM 30.27 -1.05) is now down 3.4% after saying GMAC's severely depressed nonprime portfolio will constrain overall results exacerbates underlying concerns about subprime mortgage misfortunes spilling over into the broader economy. DJ30 -192.75 NASDAQ -44.04 SP500 -23.46 NASDAQ Dec/Adv/Vol 2434/555/1.44 bln NYSE Dec/Adv/Vol 2640/630/1.18 bln
2:00 pm : Sellers remain an active bunch as the indices extend their reach to the downside. Further underscoring the bearish tone have been huge gains of 20% and 13% on the VIX (CBOE Volatility Index) and the VXN (CBOE Nasdaq Volatility Index), respectively.
Both "investor fear gauges" spiking to session highs, suggesting investors are actively buying put protection, heighten the anxiety that has been priced into stocks ever since the "Shanghai Surprise" roiled global equity markets two weeks ago today. DJ30 -164.73 NASDAQ -37.06 SP500 -19.72 NASDAQ Dec/Adv/Vol 2356/609/1.27 bln NYSE Dec/Adv/Vol 2562/695/1.03 bln
1:30 pm : Stocks continue to languish near their worst levels as market internals remain decidedly bearish. As reflected in the A/D line, decliners outpace advancers on both the NYSE and the NYSE by a more than 3-to-1 margin. The ratio of down to up volumes paints an even more negative picture at the Big Board and the Composite as buyers are very few and far between.
Of the 147 S&P industry groups, 140 are trading lower. The only winners today are tied primarily to Energy as oil prices hold onto a 1.0% intraday advance. The two exceptions are Food Retail (+0.7%), following Kroger's (KR 26.15 +0.39) solid Q4 report and upbeat guidance, and Drug Retail (+0.1%), which is benefiting from an analyst upgrade on CVS Corp (CVS 32.21 +0.23). The latter two are also known for their defensive characteristics in a down market.DJ30 -143.78 NASDAQ -32.58 SP500 -16.51 NASDAQ Dec/Adv/Vol 2265/671/1.14 bln NYSE Dec/Adv/Vol 2467/764/938 mln
1:00 pm : The bottom continues to fall out of stocks as sellers remain in complete control of the action. Adding to the market's recent struggles have been the indices' inability to find support near key technical levels of 12210, 1396 and 2374 on the Dow, S&P 500 and Nasdaq, respectively.
All three major averages are now down more than 1.0%, led by the tech-heavy Nasdaq's 1.3% decline. On the Dow, 28 of 30 components are trading lower. DJ30 -134.73 NASDAQ -33.23 SP500 -15.56 NASDAQ Dec/Adv/Vol 2263/656/1.00 bln NYSE Dec/Adv/Vol 2466/752/820 mln
12:30 pm : The market is taking a turn for the worse as the afternoon gets underway. The Financials sector is now down sharply (-1.7%) after the Mortgage Bankers Association (MBA) recently said delinquencies among subprime borrowers hit 13.33% in Q4, the highest rate since Q3 of 2002, while delinquencies among prime lenders rose 2.57% in Q4, the highest rate since Q2 of 2003.
Delinquency rates rose in 49 states in Q4, foreclosure inventory rates grew in 44 states and the MBA pushed back its forecast for the housing market to regain footing from the middle of the year to the end of 2007. As an aside, Goldman Sachs (GS 202.30 -0.30), which was up nearly 3% earlier following its blowout Q1 report, is now in negative territory. Technology, Industrials and Consumer Discretionary now posting declines of at least 1.0% also remove significant leadership for the broader market. DJ30 -108.87 NASDAQ -27.69 SP500 -12.62 NASDAQ Dec/Adv/Vol 2099/802/826 mln NYSE Dec/Adv/Vol 2204/964/670 mln
12:00 pm : After three consecutive days of gains for the Dow and S&P 500, sellers are finding excuses to take some money off the table midday.
A market still focused on everything negative is again exaggerating everything from the implications of an unwinding in the yen carry trade to potential defaults by subprime lenders spilling over into an economy that continues to show signs of slowing.
Before the bell, February retail sales rose just 0.1% (consensus 0.3%) while the more closely-watched sales, ex-autos, unexpectedly fell 0.1% (consensus 0.3%). Both figures are pressuring a market already extremely sensitive to signs of potential economic weakness even though it is likely that retail sales were held down by unseasonably cold weather. It is also worth noting that the data won't alter expectations of about 2% real GDP growth in Q1.
Meanwhile, Goldman Sachs' (GS 205.66 +3.06) has helped to put potentially overblown subprime concerns in perspective after citing weakness in the space but still handily topping Wall Street expectations with record earnings and saying the broader credit market remains strong. Nonetheless, weakness throughout the most influential of S&P sector of them all -- Financials -- is acting as a huge overhang for the broader market.
Consumer Discretionary is today's second worst performing sector. Homebuilders are getting hit on more subprime worries and after the National Association of Realtors saying that the new home market will feel additional pain over the next 12 months. Retailers are under pressure following soft monthly sales figures.
Technology has been in focus after Texas Instruments (TXN 32.02 -0.57) narrowed its Q1 revenue and earnings guidance. However, with shares up nearly 15% from the January lows and investors hoping for a more bullish outlook, the stock has succumbed to modest selling pressure and is offsetting raised Q2 guidance from Qualcomm (QCOM 42.08 +1.96). DJ30 -69.13 NASDAQ -15.28 SP500 -6.48 NASDAQ Dec/Adv/Vol 1959/859/696 mln NYSE Dec/Adv/Vol 2103/1042/572 mln
11:30 am : Equities are still on the defensive as the bulk of industry leadership remains negative. Weakness throughout Financials, which has now displaced Energy as this year's worst performing S&P sector (-3.9%), remains the biggest obstacle for the bulls to overcome this morning.
The influential sector accounts for the Dow's three worst performers today (e.g. AXP -1.15, C -1.2%, JPM -1.2%). Specialized Financials is today's worst performing S&P industry group after Moody's (MCO 59.65 -3.92) said it is suspending the rollout of its revised bank ratings. The stock has plunged 6%. DJ30 -60.31 NASDAQ -13.17 SP500 -5.69 NASDAQ Dec/Adv/Vol 1822/957/564 mln NYSE Dec/Adv/Vol 2002/1051/452 mln
11:00 am : The major averages continue to languish in negative territory as oil prices flirting with $60/bbl a day after slipping below the psychologically significant barrier provide sellers with another reason to consolidate gains.
Fortunately for the bulls, subsequent leadership in Energy, which is now up 1%, is helping to offset some of the commodity's potential risk to sustain inflation pressures. Of today's best performing S&P industry groups, Energy accounts for six of the top ten. Refiners (+1.9%), Drillers (+1.3%), Oil & Gas Equipment (+1.2%), Coal & Consumable Fuel (+1.1%), Explorers (+1.1%) and Integrated Oil (+0.6%). DJ30 -54.11 NASDAQ -8.45 SP500 -4.59 XOI +0.8% NASDAQ Dec/Adv/Vol 1848/884/442 mln NYSE Dec/Adv/Vol 2074/936/344 mln
10:30 am : More of the same for stocks as selling remains widespread across most areas. Bonds, though, continue to attract buyers. The 10-year note yield is down to 4.51% as traders price in an increased likelihood of the Fed cutting the overnight lending rate at its June meeting by 25 basis points following further evidence (i.e. Feb retail sales) of economic weakness.
Ongoing concerns that rising loan delinquencies may trigger defaults are also fueling a flight-to-quality bid in Treasuries that remains noticeably absent in the rate-sensitive Financials sector even in the face of falling bond yields. DJ30 -56.68 NASDAQ -9.29 SP500 -4.71 NASDAQ Dec/Adv/Vol 1883/793/334 mln NYSE Dec/Adv/Vol 2152/789/242 mln
10:00 am : The indices are off their opening lows but nine out of 10 sectors remain negative. For a second straight day, weakness throughout the most influential of them all -- Financials -- is acting as the biggest overhang for the broader market. Consumer Discretionary ranks a close second as a disappointing retail sales report earmarks Home Furniture (-1.9%), General Merchandise (-1.5%) and Home Furnishings (-1.3%) as three of today's top ten laggards.
Energy is the only sector attracting buyers; but it's gain is modest at best and it's coming at the expense of rising oil prices. Crude for April delivery is up more than 1% near $59.50/bbl after the IEA said it expects stockpiles in industrialized countries to see the largest Q1 decline in 10 years. DJ30 -55.32 NASDAQ -9.04 SP500 -5.80 NASDAQ Dec/Adv/Vol 1836/591/140 mln NYSE Dec/Adv/Vol 1917/472/64 mln
09:40 am : With the Dow and S&P 500 up for three straight days, it's not surprising to see stocks take a breather and the bears looking for reasons to lock in recent gains. A market still focused on everything negative is again exaggerating the implications of an unwinding in the yen carry trade that really doesn't alter the fundamental condition of U.S. companies at all. Goldman Sachs' (GS 203.87 +1.27) cited significant weakness in the subprime mortgage sector, but still had a blowout earnings report and noted the broader credit market remains strong, which helps to put such potentially overblown subprime concerns in perspective.
Another piece of modestly bad news being blown out of proportion is the modest 0.1% gain in February retail sales and an unexpected 0.1% decline in sales (ex autos). Both figures are pressuring a market already extremely sensitive to signs of potential economic weakness even though it is likely that sales were held down by unseasonably cold weather. It is also worth noting that the data won't alter expectations of about 2% real GDP growth in Q1. DJ30 -77.71 NASDAQ -16.07 SP500 -8.52 NASDAQ Vol 82 mln NYSE Vol 46 mln
09:15 am : S&P futures vs fair value: -8.9. Nasdaq futures vs fair value: -12.8.
09:00 am : S&P futures vs fair value: -8.8. Nasdaq futures vs fair value: -12.5. Still shaping up to be a weak open for the cash market as futures continue to languish well below fair value. Fears about the subprime business spilling over to the broader economy continue to weigh on investors' minds, especially after New Century Financial (NEW) said the SEC has subpoenaed documents in accounting probes and Accredited Home Lenders (LEND) said it needs to raise new funds to cover the risk of default. Goldman Sachs (GS) following up its record Q1 results by saying the broader credit market remains strong does help quell the worst of subprime worries but the news is barely helping to minimize early market losses.
08:33 am : S&P futures vs fair value: -9.2. Nasdaq futures vs fair value: -15.0. February retail sales rose just 0.1% (consensus 0.3%) while the more closely-watched sales, ex-autos, unexpectedly fell 0.1% (consensus 0.3%). With the market increasingly concerned about the pace of economic growth, the weaker than expected data exacerbate ongoing concerns about a slowdown. Bonds, in contrast, have strengthened as the 10-yr note is now up 13 ticks to yield 4.49% as traders price in an improved likelihood of a Fed rate cut.
. 
Discover What Traders Are Watching
Explore small cap ideas before they hit the headlines.
