AI
Friday, April 13, 2007 11:26:20 PM
Market Update 070413
http://biz.yahoo.com/mu/update.html
4:20 pm : The major averages closed modestly higher Friday as some upbeat corporate news eventually helped investors look past mixed economic data.
With the Fed recently increasing its attention on raw material prices as the chief influence on inflation, the market's early focus was on the March PPI report. Core PPI in March checking in unchanged was initially comforting; but the soft number, coupled with rising food and energy costs, did not exactly signal that inflation is back under control.
Another report showing erosion in consumer sentiment and that one-year inflation expectations are at the highest level in eight months also sidelined the bulls in early action.
Be that as it may, investors gradually embraced leadership in two of the S&P 500's most heavily-weighted sectors -- Financials and Health Care. The latter got a huge boost from Merck (MRK 50.20 +3.84), which opened up 6% at a three-year high after upside Q1 and FY07 EPS guidance prompted an upgrade from Goldman Sachs. By far today's best performing Dow component (+8.3%), Merck accounted for more than half of the Dow's 59-point advance.
Financials garnered some early interest following reports that SLM Corp. (SLM 46.76 +6.01) could be taken private in a deal worth $30 bln, including debt. ABN AMRO (ABN 48.28 +2.49) confirming receipt of a joint letter from three potential acquirers late in the day gave the sector an added lift.
It wasn't until news out of Cisco Systems (CSCO 26.65 +0.68) late in the session, though, that helped the Nasdaq finally break out of its intraday funk. After trading down as much as 1.2% in early trading, Cisco spiked more than 3.0% after its Chief Development Officer said the company is at the "high end" of sales forecasts and is in the "early phases" of an upgrade cycle.
The news gave the market a late-day lift, especially among tech companies reeling from a handful of warnings that have placed the sector's growth prospects under scrutiny of late. Technology bounced 1.1% from its intraday lows. DJ30 +59.17 NASDAQ +11.62 SP500 +5.05 NASDAQ Dec/Adv/Vol 1119/1902/1.86 bln NYSE Dec/Adv/Vol 1306/1940/1.32 bln
3:30 pm : The indices are holding onto the bulk of their gains and on pace to finish the day, and the week, in positive territory. The Dow is poised to close higher for the tenth time in 11 sessions and is now up more than 1% for the year.
The tech-heavy Nasdaq, thanks in large part to the recent rally in Cisco Systems (CSCO 26.91 +0.94), looks to extend its year-to-date leading advance to over 3%. DJ30 +52.77 NASDAQ +11.53 SP500 +4.96 NASDAQ Dec/Adv/Vol 1251/1723/1.50 bln NYSE Dec/Adv/Vol 1361/1858/1.08 bln
3:00 pm : The indices have spiked to their best levels of the day within the last 15 minutes. The return of upside leadership from a turnaround in the Tech sector is spearheading the market's advance.
After trading down as much as 1.2% in early trading, Cisco Systems (CSCO 26.87 +0.90) recently spiking more than 3.0% after Chief Development Officer Giancarlo said the company is at the "high end" of sales forecasts and is in the "early phases" of an upgrade cycle. The news has given the market its biggest boost, especially among tech companies since a handful of warnings have placed the sector's growth prospects under scrutiny of late. Technology has bounced 1.1% from its intraday lows. DJ30 +52.58 NASDAQ +9.41 SP500 +4.77 NASDAQ Dec/Adv/Vol 1375/1588/1.33 bln NYSE Dec/Adv/Vol 1459/1738/996 mln
2:30 pm : Efforts on the part of buyers which lifted the indices to afternoon highs 30 minutes ago have recently run out of steam. Industrials, Staples and Telecom turning the corner around the top of the hour were contributing to the market's improved stance.
However, their gains have not been substantial enough to counter the lack of leadership from the Technology and Discretionary sectors. Total volume thinning out late in the day further underscores the lack of conviction to own equities going into the weekend. DJ30 +41.61 NASDAQ -0.34 SP500 +3.02 NASDAQ Dec/Adv/Vol 1426/1510/1.18 bln NYSE Dec/Adv/Vol 1482/1687/908 mln
2:00 pm : Lacking a trading catalyst all afternoon, investors have recently sifted through some Fed speak. However, Dallas Fed President Fisher, who is not a Voting Fed Official until next year, did not comment on outlook for inflation or interest rates.
Nonetheless, buyers have shown enough resolve within the last 30 minutes to inch the Nasdaq above the flat line for the first time this afternoon. Among the best performers on the Nasdaq 100 are AMGN (+2.7%), DELL (+2.7%), EBAY (+1.6%), FAST (+2.5%), LRCX (+1.5%), MNST (+2.1%), and WYNN (+2.1%). DJ30 +45..27 NASDAQ +0.16 SP500 +3.18 NASDAQ Dec/Adv/Vol 1407/1498/1.09 bln NYSE Dec/Adv/Vol 1475/1676/838 mln
1:30 pm : Little has changed since the last update as the major averages continue to vacillate in relatively narrow ranges. Materials, though, has recently inched into positive territory; but a 0.1% advance from the least influential of the 10 S&P 500 sectors hasn't even been noticed.
The bulk of today's action continues to be a tug of war between a surge in Health Care and modest weakness in Technology. Excluding a minimal 0.2% gain in Financials, the remaining seven sectors are either up or down 0.1%. DJ30 +37.38 NASDAQ -2.87 SP500 +1.91 NASDAQ Dec/Adv/Vol 1412/1469/1.01 bln NYSE Dec/Adv/Vol 1469/1662/772 mln
1:00 pm : More of the same for stocks as there still isn't a strong sense of conviction on either the bullish or bearish side of the aisle. The market's holding pattern has been further evidenced by the fact that advancers and decliners on both the NYSE and the Nasdaq remain evenly matched.
A very narrow ratio of up to down volume further underscores what has been a rather quiet day of trading today; but today's sluggishness may be the calm before the storm as earnings kick into full gear next week alongside a plethora of influential economic data. DJ30 +31.35 NASDAQ -2.31 SP500 +1.93 NASDAQ Dec/Adv/Vol 1400/1472/926 mln NYSE Dec/Adv/Vol 1514/1590/706 mln
12:30 pm : No real change in the proceedings as the afternoon session gets underway. The Dow is still turning in the day's best performance, but its 0.2% advance has been hardly much to get excited about. Aside from the rally in Merck (MRK 50.19 +3.83), which is now up 8.3%, there are a handful of other Dow components turning in solid performances.
McDonald's (MCD 47.68 +1.05) is up 2.3% at a seven-year high after issuing upside Q1 guidance due to strong March comps. General Electric (GE 35.44 +0.26) is up nicely as shareholders applaud upbeat commentary from its conference call after management reaffirmed its full-year outlook. However, seventeen of the Dow's 30 components still trading lower underscores why the blue-chip index is not posting a more convincing gain. DJ30 +28.46 NASDAQ -3.62 SP500 +1.38 NASDAQ Dec/Adv/Vol 1371/1479/840 mln NYSE Dec/Adv/Vol 1446/1637/638 mln
12:00 pm : The major averages are trading in split fashion midday as mixed economic and corporate news offer investors little incentive to aggressively build on yesterday's surprise gains.
Before the bell, the market got a short-term boost from the producer-price report. Core PPI was unchanged versus an expected gain of 0.2% and following a 0.4% gain in February. However, the larger-than-expected 1.0% rise in total PPI garnering added attention since food costs climbing more than 1% for a fourth straight month and a 3.6% surge in energy prices remain a concern. The focus now turns to next Tuesday's CPI report since it offers the better inflation read for Fed policy direction.
A sharper-than-expected decline in sentiment as also provided an excuse to sideline the bulls. Even though there isn't as strong a correlation between the University of Michigan's preliminary read on sentiment and consumer spending as some might think, the report's one-year inflation expectations component rising to the highest in eight months has done little to quell renewed concerns about pricing pressures.
Perhaps an even bigger news item today has been Merck (MRK 50.00 +3.64), which has surged to its best levels in 3 1/2 years after upside Q1 and FY07 earnings guidance prompted Goldman Sachs to upgrade the stock. By far and away today's best performing Dow component (+7.9%), Merck currently accounts for nearly all 30 points of the Dow's intraday advance and is helping Health Care enjoy the day's only noticeable gain (+1.0%).
Financials has also been in focus following reports that SLM Corp. (SLM 45.86 +5.11) could be taken private in a deal worth $30 bln, including debt. However, the sector's modest 0.3% advance is struggling to offset a 0.4% decline in Technology and the absence of leadership anywhere else. Apple (AAPL 90.73 -1.46) is down 1.6% after delaying the release of its Leopard operating system while Semiconductor Equipment (-1.5%) ranks among today's biggest disappointments. DJ30 +30.80 DJTA -0.6% NASDAQ -0.45 NQ100 -0.2% SOX -1.0% SP500 +2.25 XOI +0.3% NASDAQ Dec/Adv/Vol 1391/1434/738 mln NYSE Dec/Adv/Vol 1486/1563/556 mln
11:30 am : Not much has changed since the last update as investors continue to err on the side of caution. That isn't a big surprise since today's PPI data didn't exactly provide overwhelming evidence that inflation is back under control or that a new lower trend has developed.
It is also worth noting that there are typical headwinds going into the weekend, especially one in which millions of Americans will be scrambling to finish their taxes before next Tuesday; 2006 tax returns are due April 17 because the usual April 15 deadline falls on a Sunday this year and the next day is Emancipation Day. DJ30 +14.23 NASDAQ -3.96 SP500 +0.40 NASDAQ Dec/Adv/Vol 1420/1366/630 mln NYSE Dec/Adv/Vol 1440/1536/460 mln
11:00 am : The major averages are bouncing off their recent lows but only enough to inch the Dow and S&P 500 back above the flat line. The AMEX Securities Broker/Dealer Index recently spiking into positive territory has given an added boost to the influential Financials sector (+0.3%). The sector has been in focus following reports that SLM Corp. (SLM 45.35 +4.60), better known as Sallie Mae, could be taken private in a deal worth $30 bln including debt.
The Energy sector turning positive within the last 30 minutes is also worth noting, especially since it has not come at the expense of a surge in oil prices. Crude for May delivery is still at a level that is bearish for equities, near $64/bbl; but the commodity is currently unchanged. DJ30 +10.08 NASDAQ -4.90 SP500 +0.23 NASDAQ Dec/Adv/Vol 1421/1307/500 mln NYSE Dec/Adv/Vol 1577/1355/346 mln
10:30 am : Stocks spike lower since the last update, pushing the Dow and S&P 500 into the red as investors use a sharper than expected decline in sentiment as an excuse to sideline the bulls. At the top of the hour, a survey compiled by the University of Michigan checking in with a preliminary read of 85.3 (consensus 87.5), the lowest since August, has shown that sentiment eroded this month.
Even though there isn't as strong a correlation between sentiment and consumer spending as some might think, the report's one-year inflation expectations component rising to 3.3% -- the highest in eight months -- exacerbates renewed concerns about pricing pressures. DJ30 -12.85 NASDAQ -8.74 SP500 -2.52 NASDAQ Dec/Adv/Vol 1550/1073/340 mln NYSE Dec/Adv/Vol 1613/1250/224 mln
10:00 am : The major averages are now trading in split fashion as mixed industry leadership dictates this morning's action. Fortunately for the bulls, the only three sectors trading higher also happen to be among the four most heavily-weighted areas on the S&P 500. Health Care (+1.0%) is leading the way, getting a huge lift from Merck's upside guidance.
However, broad-based weakness in Technology (-0.6%) is acting as an offsetting factor, accounting for five of today's worst performing S&P industry groups. Semiconductor Equipment (-2.0%) is this morning's biggest laggard, followed by Application Software (-1.0%), Semiconductors (-0.9%), Electronic Equipment Manufacturing (-0.7%), and Systems Software (-0.7%). DJ30 +23.34 NASDAQ -4.30 SP500 +1.20 NASDAQ Dec/Adv/Vol 1210/1216/148 mln NYSE Dec/Adv/Vol 1221/1377/74 mln
09:40 am : Stocks open slightly higher as investors weigh upside guidance from a couple of Dow components against a mixed PPI report. Merck (MRK 49.45 +2.89) raising its Q1 and FY07 profit forecasts, prompting an upgrade from Goldman Sachs, is providing the bulk of early blue-chip support. Merck, which opened up 6% at a three-year high, accounts for 23 Dow points. McDonald's (MCD 46.98 +0.35) is also up nicely after issuing upside Q1 guidance following strong March comps.
On the economic front, core PPI was unchanged (consensus 0.2%), following a 0.4% rise in February. That lowers the year/year rate to 1.7% and provides some evidence that inflation pressures have moderated. However, the large 1.0% rise in total PPI is garnering added attention since food costs rising more than 1% for a fourth straight month and a 3.6% surge in energy prices remain a concern. DJ30 +32.76 NASDAQ +1.30 SP500 +2.08 NASDAQ Vol 66 mln NYSE Vol 44 mln
09:15 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -0.5.
09:00 am : S&P futures vs fair value: flat. Nasdaq futures vs fair value: -1.0. Recent recovery efforts have stalled amid further analysis of today's producer-price data, now pointing to a sluggish start. While the unchanged core rate is comforting it doesn't exactly signal that inflation is back under control or that a new lower trend has developed; and the soft March number may prove temporary. A larger than expected 1.0% rise in total PPI is also worth another look since food costs rising more than 1% for a fourth straight month and a 3.6% surge in energy prices could have a broad impact on inflation. It is also worth noting that next Tuesday's CPI report offers the better inflation read for Fed policy direction.
08:33 am : S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +2.3. Futures trade spikes higher following tame inflation data, now suggesting a slightly higher start for the cash market. Total PPI rose 1.0% (consensus 0.7%) in March; but the more closely-watched core rate was unchanged (consensus 0.2%), following a 0.4% rise in February. That pushes the year/year rate to 1.7% and provides some evidence that inflation pressures have abated somewhat. The Trade Deficit unexpectedly narrowed to $58.4 bln (consensus $60.5 bln). Bonds have strengthened as the 10-year note is now up 3 ticks to yield 4.72%.
08:00 am : S&P futures vs fair value: -2.5. Nasdaq futures vs fair value: -6.2. So much for yesterday's surprise momentum carrying over into this morning's open as futures indications currently signal a lower start for stocks. On a positive note, Merck (MRK) raised its Q1 and FY07 profit forecasts, prompting an upgrade from Goldman Sachs, while fellow Dow component General Electric (GE) matched analysts' estimates and reaffirmed its full-year outlook. It is also being reported that SLM Corp. (SLM) could be taken private in a deal worth $20 bln.
Be that as it may, with the Fed recently increasing its attention on raw material prices as the chief influence on inflation, it's not surprising to see investors anxiously waiting for March PPI data (8:30 ET) to set the tone for today's trading.
06:17 am : S&P futures vs fair value: -1.5. Nasdaq futures vs fair value: -4.8.
http://biz.yahoo.com/mu/update.html
4:20 pm : The major averages closed modestly higher Friday as some upbeat corporate news eventually helped investors look past mixed economic data.
With the Fed recently increasing its attention on raw material prices as the chief influence on inflation, the market's early focus was on the March PPI report. Core PPI in March checking in unchanged was initially comforting; but the soft number, coupled with rising food and energy costs, did not exactly signal that inflation is back under control.
Another report showing erosion in consumer sentiment and that one-year inflation expectations are at the highest level in eight months also sidelined the bulls in early action.
Be that as it may, investors gradually embraced leadership in two of the S&P 500's most heavily-weighted sectors -- Financials and Health Care. The latter got a huge boost from Merck (MRK 50.20 +3.84), which opened up 6% at a three-year high after upside Q1 and FY07 EPS guidance prompted an upgrade from Goldman Sachs. By far today's best performing Dow component (+8.3%), Merck accounted for more than half of the Dow's 59-point advance.
Financials garnered some early interest following reports that SLM Corp. (SLM 46.76 +6.01) could be taken private in a deal worth $30 bln, including debt. ABN AMRO (ABN 48.28 +2.49) confirming receipt of a joint letter from three potential acquirers late in the day gave the sector an added lift.
It wasn't until news out of Cisco Systems (CSCO 26.65 +0.68) late in the session, though, that helped the Nasdaq finally break out of its intraday funk. After trading down as much as 1.2% in early trading, Cisco spiked more than 3.0% after its Chief Development Officer said the company is at the "high end" of sales forecasts and is in the "early phases" of an upgrade cycle.
The news gave the market a late-day lift, especially among tech companies reeling from a handful of warnings that have placed the sector's growth prospects under scrutiny of late. Technology bounced 1.1% from its intraday lows. DJ30 +59.17 NASDAQ +11.62 SP500 +5.05 NASDAQ Dec/Adv/Vol 1119/1902/1.86 bln NYSE Dec/Adv/Vol 1306/1940/1.32 bln
3:30 pm : The indices are holding onto the bulk of their gains and on pace to finish the day, and the week, in positive territory. The Dow is poised to close higher for the tenth time in 11 sessions and is now up more than 1% for the year.
The tech-heavy Nasdaq, thanks in large part to the recent rally in Cisco Systems (CSCO 26.91 +0.94), looks to extend its year-to-date leading advance to over 3%. DJ30 +52.77 NASDAQ +11.53 SP500 +4.96 NASDAQ Dec/Adv/Vol 1251/1723/1.50 bln NYSE Dec/Adv/Vol 1361/1858/1.08 bln
3:00 pm : The indices have spiked to their best levels of the day within the last 15 minutes. The return of upside leadership from a turnaround in the Tech sector is spearheading the market's advance.
After trading down as much as 1.2% in early trading, Cisco Systems (CSCO 26.87 +0.90) recently spiking more than 3.0% after Chief Development Officer Giancarlo said the company is at the "high end" of sales forecasts and is in the "early phases" of an upgrade cycle. The news has given the market its biggest boost, especially among tech companies since a handful of warnings have placed the sector's growth prospects under scrutiny of late. Technology has bounced 1.1% from its intraday lows. DJ30 +52.58 NASDAQ +9.41 SP500 +4.77 NASDAQ Dec/Adv/Vol 1375/1588/1.33 bln NYSE Dec/Adv/Vol 1459/1738/996 mln
2:30 pm : Efforts on the part of buyers which lifted the indices to afternoon highs 30 minutes ago have recently run out of steam. Industrials, Staples and Telecom turning the corner around the top of the hour were contributing to the market's improved stance.
However, their gains have not been substantial enough to counter the lack of leadership from the Technology and Discretionary sectors. Total volume thinning out late in the day further underscores the lack of conviction to own equities going into the weekend. DJ30 +41.61 NASDAQ -0.34 SP500 +3.02 NASDAQ Dec/Adv/Vol 1426/1510/1.18 bln NYSE Dec/Adv/Vol 1482/1687/908 mln
2:00 pm : Lacking a trading catalyst all afternoon, investors have recently sifted through some Fed speak. However, Dallas Fed President Fisher, who is not a Voting Fed Official until next year, did not comment on outlook for inflation or interest rates.
Nonetheless, buyers have shown enough resolve within the last 30 minutes to inch the Nasdaq above the flat line for the first time this afternoon. Among the best performers on the Nasdaq 100 are AMGN (+2.7%), DELL (+2.7%), EBAY (+1.6%), FAST (+2.5%), LRCX (+1.5%), MNST (+2.1%), and WYNN (+2.1%). DJ30 +45..27 NASDAQ +0.16 SP500 +3.18 NASDAQ Dec/Adv/Vol 1407/1498/1.09 bln NYSE Dec/Adv/Vol 1475/1676/838 mln
1:30 pm : Little has changed since the last update as the major averages continue to vacillate in relatively narrow ranges. Materials, though, has recently inched into positive territory; but a 0.1% advance from the least influential of the 10 S&P 500 sectors hasn't even been noticed.
The bulk of today's action continues to be a tug of war between a surge in Health Care and modest weakness in Technology. Excluding a minimal 0.2% gain in Financials, the remaining seven sectors are either up or down 0.1%. DJ30 +37.38 NASDAQ -2.87 SP500 +1.91 NASDAQ Dec/Adv/Vol 1412/1469/1.01 bln NYSE Dec/Adv/Vol 1469/1662/772 mln
1:00 pm : More of the same for stocks as there still isn't a strong sense of conviction on either the bullish or bearish side of the aisle. The market's holding pattern has been further evidenced by the fact that advancers and decliners on both the NYSE and the Nasdaq remain evenly matched.
A very narrow ratio of up to down volume further underscores what has been a rather quiet day of trading today; but today's sluggishness may be the calm before the storm as earnings kick into full gear next week alongside a plethora of influential economic data. DJ30 +31.35 NASDAQ -2.31 SP500 +1.93 NASDAQ Dec/Adv/Vol 1400/1472/926 mln NYSE Dec/Adv/Vol 1514/1590/706 mln
12:30 pm : No real change in the proceedings as the afternoon session gets underway. The Dow is still turning in the day's best performance, but its 0.2% advance has been hardly much to get excited about. Aside from the rally in Merck (MRK 50.19 +3.83), which is now up 8.3%, there are a handful of other Dow components turning in solid performances.
McDonald's (MCD 47.68 +1.05) is up 2.3% at a seven-year high after issuing upside Q1 guidance due to strong March comps. General Electric (GE 35.44 +0.26) is up nicely as shareholders applaud upbeat commentary from its conference call after management reaffirmed its full-year outlook. However, seventeen of the Dow's 30 components still trading lower underscores why the blue-chip index is not posting a more convincing gain. DJ30 +28.46 NASDAQ -3.62 SP500 +1.38 NASDAQ Dec/Adv/Vol 1371/1479/840 mln NYSE Dec/Adv/Vol 1446/1637/638 mln
12:00 pm : The major averages are trading in split fashion midday as mixed economic and corporate news offer investors little incentive to aggressively build on yesterday's surprise gains.
Before the bell, the market got a short-term boost from the producer-price report. Core PPI was unchanged versus an expected gain of 0.2% and following a 0.4% gain in February. However, the larger-than-expected 1.0% rise in total PPI garnering added attention since food costs climbing more than 1% for a fourth straight month and a 3.6% surge in energy prices remain a concern. The focus now turns to next Tuesday's CPI report since it offers the better inflation read for Fed policy direction.
A sharper-than-expected decline in sentiment as also provided an excuse to sideline the bulls. Even though there isn't as strong a correlation between the University of Michigan's preliminary read on sentiment and consumer spending as some might think, the report's one-year inflation expectations component rising to the highest in eight months has done little to quell renewed concerns about pricing pressures.
Perhaps an even bigger news item today has been Merck (MRK 50.00 +3.64), which has surged to its best levels in 3 1/2 years after upside Q1 and FY07 earnings guidance prompted Goldman Sachs to upgrade the stock. By far and away today's best performing Dow component (+7.9%), Merck currently accounts for nearly all 30 points of the Dow's intraday advance and is helping Health Care enjoy the day's only noticeable gain (+1.0%).
Financials has also been in focus following reports that SLM Corp. (SLM 45.86 +5.11) could be taken private in a deal worth $30 bln, including debt. However, the sector's modest 0.3% advance is struggling to offset a 0.4% decline in Technology and the absence of leadership anywhere else. Apple (AAPL 90.73 -1.46) is down 1.6% after delaying the release of its Leopard operating system while Semiconductor Equipment (-1.5%) ranks among today's biggest disappointments. DJ30 +30.80 DJTA -0.6% NASDAQ -0.45 NQ100 -0.2% SOX -1.0% SP500 +2.25 XOI +0.3% NASDAQ Dec/Adv/Vol 1391/1434/738 mln NYSE Dec/Adv/Vol 1486/1563/556 mln
11:30 am : Not much has changed since the last update as investors continue to err on the side of caution. That isn't a big surprise since today's PPI data didn't exactly provide overwhelming evidence that inflation is back under control or that a new lower trend has developed.
It is also worth noting that there are typical headwinds going into the weekend, especially one in which millions of Americans will be scrambling to finish their taxes before next Tuesday; 2006 tax returns are due April 17 because the usual April 15 deadline falls on a Sunday this year and the next day is Emancipation Day. DJ30 +14.23 NASDAQ -3.96 SP500 +0.40 NASDAQ Dec/Adv/Vol 1420/1366/630 mln NYSE Dec/Adv/Vol 1440/1536/460 mln
11:00 am : The major averages are bouncing off their recent lows but only enough to inch the Dow and S&P 500 back above the flat line. The AMEX Securities Broker/Dealer Index recently spiking into positive territory has given an added boost to the influential Financials sector (+0.3%). The sector has been in focus following reports that SLM Corp. (SLM 45.35 +4.60), better known as Sallie Mae, could be taken private in a deal worth $30 bln including debt.
The Energy sector turning positive within the last 30 minutes is also worth noting, especially since it has not come at the expense of a surge in oil prices. Crude for May delivery is still at a level that is bearish for equities, near $64/bbl; but the commodity is currently unchanged. DJ30 +10.08 NASDAQ -4.90 SP500 +0.23 NASDAQ Dec/Adv/Vol 1421/1307/500 mln NYSE Dec/Adv/Vol 1577/1355/346 mln
10:30 am : Stocks spike lower since the last update, pushing the Dow and S&P 500 into the red as investors use a sharper than expected decline in sentiment as an excuse to sideline the bulls. At the top of the hour, a survey compiled by the University of Michigan checking in with a preliminary read of 85.3 (consensus 87.5), the lowest since August, has shown that sentiment eroded this month.
Even though there isn't as strong a correlation between sentiment and consumer spending as some might think, the report's one-year inflation expectations component rising to 3.3% -- the highest in eight months -- exacerbates renewed concerns about pricing pressures. DJ30 -12.85 NASDAQ -8.74 SP500 -2.52 NASDAQ Dec/Adv/Vol 1550/1073/340 mln NYSE Dec/Adv/Vol 1613/1250/224 mln
10:00 am : The major averages are now trading in split fashion as mixed industry leadership dictates this morning's action. Fortunately for the bulls, the only three sectors trading higher also happen to be among the four most heavily-weighted areas on the S&P 500. Health Care (+1.0%) is leading the way, getting a huge lift from Merck's upside guidance.
However, broad-based weakness in Technology (-0.6%) is acting as an offsetting factor, accounting for five of today's worst performing S&P industry groups. Semiconductor Equipment (-2.0%) is this morning's biggest laggard, followed by Application Software (-1.0%), Semiconductors (-0.9%), Electronic Equipment Manufacturing (-0.7%), and Systems Software (-0.7%). DJ30 +23.34 NASDAQ -4.30 SP500 +1.20 NASDAQ Dec/Adv/Vol 1210/1216/148 mln NYSE Dec/Adv/Vol 1221/1377/74 mln
09:40 am : Stocks open slightly higher as investors weigh upside guidance from a couple of Dow components against a mixed PPI report. Merck (MRK 49.45 +2.89) raising its Q1 and FY07 profit forecasts, prompting an upgrade from Goldman Sachs, is providing the bulk of early blue-chip support. Merck, which opened up 6% at a three-year high, accounts for 23 Dow points. McDonald's (MCD 46.98 +0.35) is also up nicely after issuing upside Q1 guidance following strong March comps.
On the economic front, core PPI was unchanged (consensus 0.2%), following a 0.4% rise in February. That lowers the year/year rate to 1.7% and provides some evidence that inflation pressures have moderated. However, the large 1.0% rise in total PPI is garnering added attention since food costs rising more than 1% for a fourth straight month and a 3.6% surge in energy prices remain a concern. DJ30 +32.76 NASDAQ +1.30 SP500 +2.08 NASDAQ Vol 66 mln NYSE Vol 44 mln
09:15 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -0.5.
09:00 am : S&P futures vs fair value: flat. Nasdaq futures vs fair value: -1.0. Recent recovery efforts have stalled amid further analysis of today's producer-price data, now pointing to a sluggish start. While the unchanged core rate is comforting it doesn't exactly signal that inflation is back under control or that a new lower trend has developed; and the soft March number may prove temporary. A larger than expected 1.0% rise in total PPI is also worth another look since food costs rising more than 1% for a fourth straight month and a 3.6% surge in energy prices could have a broad impact on inflation. It is also worth noting that next Tuesday's CPI report offers the better inflation read for Fed policy direction.
08:33 am : S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +2.3. Futures trade spikes higher following tame inflation data, now suggesting a slightly higher start for the cash market. Total PPI rose 1.0% (consensus 0.7%) in March; but the more closely-watched core rate was unchanged (consensus 0.2%), following a 0.4% rise in February. That pushes the year/year rate to 1.7% and provides some evidence that inflation pressures have abated somewhat. The Trade Deficit unexpectedly narrowed to $58.4 bln (consensus $60.5 bln). Bonds have strengthened as the 10-year note is now up 3 ticks to yield 4.72%.
08:00 am : S&P futures vs fair value: -2.5. Nasdaq futures vs fair value: -6.2. So much for yesterday's surprise momentum carrying over into this morning's open as futures indications currently signal a lower start for stocks. On a positive note, Merck (MRK) raised its Q1 and FY07 profit forecasts, prompting an upgrade from Goldman Sachs, while fellow Dow component General Electric (GE) matched analysts' estimates and reaffirmed its full-year outlook. It is also being reported that SLM Corp. (SLM) could be taken private in a deal worth $20 bln.
Be that as it may, with the Fed recently increasing its attention on raw material prices as the chief influence on inflation, it's not surprising to see investors anxiously waiting for March PPI data (8:30 ET) to set the tone for today's trading.
06:17 am : S&P futures vs fair value: -1.5. Nasdaq futures vs fair value: -4.8.
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