AI
Thursday, April 19, 2007 9:08:18 PM
Market Update 070419
http://biz.yahoo.com/mu/update.html
4:20 pm : With conviction on the part of buyers lagging all day and the Dow closing in record territory a day earlier, it wasn't surprising to see the blue-chip index take a bit of a breather Thursday. Be that as it may, the blue-chip index still eked out enough of a gain to extend its winning streak to six and close at another new all-time high. The major averages finished mixed for a third straight session as the tech-heavy Nasdaq languished again as investors remained cautious ahead of more key earnings reports.
It is worth noting, though, that things could have been a lot worse, given the decidedly bearish tone coming into today's trading. Before the bell, the market had all of the makings for round two, albeit a much less dramatic sequel, of the Shanghai sell-off that triggered widespread panic on February 27. Higher than expected GDP and CPI reports from China initially renewed concerns about the Chinese government stepping up its efforts to curb speculative buying interest with a possible rate hike.
The news roiled overseas markets as Japan's Nikkei 225 fell 1.7%, Hong Kong's Hang Seng Index plunged 2.3% and the once unknown Shanghai stock exchange tumbled 4.5%. Fortunately for the bulls, fears of a possible unwinding in the yen carry trade and resurgence in risk aversion, similar to that exhibited throughout the month of March in the aftermath of the Asian contagion, continued to subside as the day wore on. The European bourses as well as the major U.S. averages posted only fractional declines.
From a leadership standpoint, six of 10 sectors posted losses. Energy (-1.0%) paced the way lower as a 2.1% drop in oil prices diminished the desire to own the likes of explorers and refiners. Crude for May delivery, which expires tomorrow, closed near $61.80/bbl following reports that Enbridge resumed shipments through a previously shutdown pipeline from Canada, last year's biggest source of U.S. crude-oil imports.
Evidently lower oil prices did little to excite consumers as the Discretionary turned in the day's second worst performance. Everything from retailers to autos to cable companies were weak, but hotels were the sector's biggest disappointment after Marriott International (MAR 48.12 -3.75) issued disappointing RevPAR guidance.
With Google's (GOOG 471.27 -4.74) earnings out after the close, and rival Yahoo! (YHOO 27.50 -0.80) shocking Wall Street yesterday with its disappointing Q1 report, Technology was in focus again Thursday. Yahoo! tacked a nearly 3% decline onto yesterday's 11% drubbing while eBay (EBAY 33.16 -1.29) also weighed heavily on the Internet Services group. A suggested holding in the Briefing.com Active Portfolio, eBay posted a 52% rise in Q1 profits and raised its full-year earnings and revenue forecasts; but with expectations running high ahead of its report last night, investors were tempted to lock in some of its 15% year-to-date advance. One bright spot for tech was Intel (INTC 21.81 +0.46), another suggested holding which surged 2.2% after being upgraded. Intel was an integral reason the Dow hit a new record again and why the tech sector's decline was minimal.
On the positive side of things, Health Care was the day's standout, with the bulk of sector support coming from Biotech (+3.4%), today's best performing S&P industry group. Amgen (AMGN 62.32 +2.31) staged a relief rally following upbeat results from a study regarding its blockbuster Aranesp drug while investors also applauded an upbeat Q1 report from Gilead Sciences (GILD 81.67 +3.24). BTK +0.7% DJ30 +4.79 DJTA +0.7% DJUA -0.4% DOT -0.6% NASDAQ -5.15 R2K -0.8% SOX +0.5% SP400 -0.4% SP500 -1.77 XOI -0.8% NASDAQ Dec/Adv/Vol 1988/1023/2.04 bln NYSE Dec/Adv/Vol 2122/1117/1.48 bln
3:30 pm : The market continues to show good resilience going into the close, especially after the stage was set for such a huge disappointment before the market even opened. The Dow appears poised to make it six for six while tech investors erring on the side of caution ahead of earnings from Google (GOOG 473.90 -2.11) after the bell position the Nasdaq to post its third straight decline.
The S&P 500, still plagued by split sector leadership, looks like it too will close with little fanfare as it has been mired in a 9-point range all day.DJ30 +13.32 NASDAQ -4.75 SP500 -0.82 NASDAQ Dec/Adv/Vol 1881/1105/1.77 bln NYSE Dec/Adv/Vol 2100/1112/1.30 bln
3:00 pm : With oil prices recently closing and the bond market relatively stagnant all day, the market is currently lacking the necessary catalysts to support the bull's uphill battle to lift blue chips for a 14th time in 15 days.
The Dow has recently bounced back into positive territory but an intraday gain of less than 0.1% leaves the door wide open for just one of its 30 components to slip up and snap a five-day winning streak, especially with Dow gains and losses being evenly matched. DJ30 +6.47 NASDAQ -5.09 SP500 -1.47 NASDAQ Dec/Adv/Vol 1863/1117/1.66 bln NYSE Dec/Adv/Vol 2083/1116/1.18 bln
2:30 pm : In similar fashion to yesterday's late-day breakdown, stocks have succumbed to some afternoon consolidation. This time around, though, market gains were so minimal that a renewed wave of modest selling pressure has been enough to push the major averages back below the flat line.
The most noticeable contributors to the recent pullback have been collapses in Financials and Technology, which removes leadership from two sectors that combine to account for nearly 37% of the total weighting on the S&P 500. DJ30 -3.58 NASDAQ -4.14 SP500 -2.05 NASDAQ Dec/Adv/Vol 1773/1175/1.53 bln NYSE Dec/Adv/Vol 1880/1296/1.08 bln
2:00 pm : More of the same for stocks as equities remain on the offensive but market internals still hold a negative slant. Decliners on the NYSE hold a nearly 3-to-2 edge over advancers while those on the Nasdaq hold a 4-to-3 margin.
A split ratio of up to down volume, though, paints a more accurate picture since the large-cap names acting as this week's biggest sources of support tend to be widely held and enjoy more institutional participation. AMD, PFE, and SGP are up 4.5% on average today and are among the most actively traded NYSE-listed securities, accounting for roughly 10% of the total volume on the Big Board. DJ30 +24.70 NASDAQ +2.38 SP500 +1.35 NASDAQ Dec/Adv/Vol 1694/1221/1.40 bln NYSE Dec/Adv/Vol 1893/1275/990 mln
1:30 pm : Not much has changed since the last update, but the Dow continues to inch its way even further into unchartered territory. Even though the index's intraday gain remains modest in scope (+0.2%), the psychological impact of it hitting new all-time highs is helping to provide a floor of improved sentiment across the board.
Intel (INTC 21.89 +0.54) is pacing the way with a 2.5% advance among the 21 components trading higher following an analyst upgrade. Another notable Dow winner is Honeywell (HON 49.21 +1.00), which is hitting fresh multi-year highs heading into its Q1 results tomorrow morning. Altria Group (MO 69.36 -0.72) remains the Dow's worst performer today (-1.0%) after its quarterly results fell shy of analysts' expectations. DJ30 +24.48 NASDAQ +3.86 SP500 +1.33 NASDAQ Dec/Adv/Vol 1629/1278/1.31 bln NYSE Dec/Adv/Vol 1832/1308/936 mln
1:00 pm : Stocks are quietly extending their reach to the upside as investors continue to embrace upside leadership from the S&P 500's four most heavily weighted sectors. Health Care is now turning in the best performance, tacking a 0.7% gain on to its 6.9% year-to-date advance.
Aside from renewed enthusiasm for Amgen (AMGN 63.12 +3.11) shares giving a boost to Biotech (+4.0%), the group is also getting a lift from a handful of names (e.g. MEDI +2.8%, CELG +4.7%) that have been mentioned in the past as LBO/acquisition candidates. Pharmaceuticals (+1.1%) also rank among today's best performers as Schering-Plough (SGP 31.02 +2.47) soars nearly 9% to a multi-year high after posting a 55% rise in Q1 earnings.BTK +1.4% DJ30 +15.68 NASDAQ +3.71 SP500 +1.21 NASDAQ Dec/Adv/Vol 1701/1173/1.22 bln NYSE Dec/Adv/Vol 1981/1135/860 mln
12:30 pm : Buyers continue to show some resolve, kicking off the afternoon session by lifting the major averages into positive territory for the first time today. The Financials sector turning the corner returns some very influential leadership. Specialized Financials (+0.8%) and Thrifts & Mortgage (+0.8%) have recently broken into today's top ten.
Separately, the Philly Fed recently checked in below forecasts; but investors so far appear somewhat relieved that the report showed overall activity in the region's manufacturing sector was steady this month and that new orders edged higher. DJ30 +6.90 NASDAQ +2.38 SP500 +0.56 NASDAQ Dec/Adv/Vol 1710/1147/1.08 bln NYSE Dec/Adv/Vol 2033/1073/760 mln
12:00 pm : The indices are trading just below the flat line and well off their opening lows midday as investors try to look past a sell-off in Asian markets sparking early concerns of a liquidity crisis and overbought market conditions.
With the Dow posting its 13th gain in 14 days and closing at record levels yesterday, a sense the market is overextended was exacerbated early on by renewed worries the Chinese government may step up its efforts to curb speculative buying interest. Higher than expected GDP and CPI reports from China had provoked concerns about a possible rate hike, which may in turn lead to an unwinding in the yen carry trade and resurgence in risk aversion similar to that exhibited throughout the month of March. However, such concerns continue to abate as participants still find value across a handful of sectors.
Of the five sectors trading lower, Energy (-0.9%) paces the way as a 2.0% drop in oil prices makes everything from explorers to refiners less attractive. Consumer Discretionary ranks second as disappointing RevPAR guidance from Marriott International (MAR 48.51 -3.36) earmarks Hotels (-2.5%) as today's worst performing S&P industry group.
On the positive side of things, Industrials is turning in the best performance, benefiting primarily from strength in Railroads (+2.6%) after Union Pacific (UNP 118.30 +4.52) handily topped Wall Street expectations citing improved margins and pricing. Transportation stocks are getting an added boost from oil's sharp downturn.
Health Care is the only other sector posting a respectable gain, but is not getting much of a lift from Merck's (MRK 49.92 +0.23) in-line report. The bulk of sector support is coming from Biotech (+3.3%) fueled by a relief rally in Amgen (AMGN 63.00 +2.99), following upbeat results from a study regarding its blockbuster Aranesp drug, as well as an upbeat Q1 report from Gilead Sciences (GILD 81.73 +3.30) last night. DJ30 -7.21 NASDAQ -1.60 SP500 -0.75 NASDAQ Dec/Adv/Vol 1884/954/960 mln NYSE Dec/Adv/Vol 2090/985/660 mln
11:30 am : A renewed wave of buying interest within the last 30 minutes now leaves all three major indices at their best levels of the morning and inching closer to the unchanged mark. While another turnaround in Technology is among the most noticeable reasons for the market's latest recovery, oil prices recently plunging to session lows below $62/bbl are the driving catalysts behind the improved sentiment.
Crude for May delivery, which expires tomorrow, is now down 2.3% near $61.70/bbl following reports that Enbridge has resumed shipments through a previously shutdown pipeline from Canada, last year's biggest source of U.S. crude-oil imports. Crude was down as much as 2.8% at $61.34/bbl.DJ30 -15.07 NASDAQ -4.48 SP500 -2.05 NASDAQ Dec/Adv/Vol 1930/799/790 mln NYSE Dec/Adv/Vol 2144/884/550 mln
11:00 am : The market's recent attempts to shrug off early consolidation efforts tied largely to overseas weakness have run into some resistance. The Tech sector's failure to stay positive has removed some notable leadership. Novellus Systems (NVLS 31.06 -1.65) is the sector's biggest laggard (-5.0%) after missing analysts' expectations and issuing weak bookings guidance.
Not even the defensive characteristics of the Health Care sector (+0.2%) have been able to convincingly attract buyers. While Biotech remains the sector's best performer (+2.9%), Managed Health (-2.7%) earmarked as today's worst performing S&P industry group is acting as an offset. Unitedhealth Group (UNH 52.05 -2.16) is plunging 4% after posting lower than expected Q1 revenue and forecasting higher medical costs for the full year. DJ30 -35.44 NASDAQ -8.96 SP500 -4.18 NASDAQ Dec/Adv/Vol 1919/810/668 mln NYSE Dec/Adv/Vol 2099/873/442 mln
10:30 am : The major averages are still in negative territory but continue to trade at improved levels. In fact, the Dow, S&P 500 and Nasdaq have seen their recent losses more than halved as the Tech and Industrials sectors turn the corner. The latter is benefiting largely from strength in Railroads (+2.0%), which has climbed into today's top ten after Union Pacific (UNP 115.94 +2.16) handily topped expectations with a 24% rise in Q1 net income improved margins and pricing.
Transportation stocks are getting an additional lift as oil prices languish near session lows. Technology's improved stance has come largely on the back of a 1.2% surge in Hewlett-Packard (HPQ 41.47 +0.49) following reports that it captured more of the PC during the first quarter. DJ30 -12.53 DJTA +0.3% NASDAQ -6.24 SP500 -2.35 NASDAQ Dec/Adv/Vol 2015/663/496 mln NYSE Dec/Adv/Vol 2180/722/296 mln
10:00 am : The indices are off their opening lows but haven't staged enough of a rebound yet to make a significant change in the standings. Nine out of 10 sectors are still trading lower, paced by a 0.7% decline in Materials. That isn't all that surprising, though, since it ranks as this year's second best performing sector (+10.6%) and economic news out of Asia raise concerns about China's longstanding appetite for commodities. Energy is turning in a similarly dismal performance, as oil stocks become less attractive in the face of a 2.0% sell-off in crude prices below $62/bbl. The absence of leadership from more influential areas like Financials and Technology is also acting as an overhang.
Health Care, however, has recently turned positive and is the biggest reason behind the market's improved stance. A relief rally in Amgen (AMGN 63.63 +3.62), following upbeat results from a study regarding its blockbuster drug Aranesp, is providing the bulk of sector support. Biotech (+2.8%) ranks as today's second best performing S&P industry group and is also getting a lift from Gilead Sciences (GILD 79.66 +1.23) after it posted a 55% rise in Q1 earnings last night. BTK +0.1% DJ30 -35.43 NASDAQ -13.31 SP500 -5.59 XOI -0.7% NASDAQ Dec/Adv/Vol 2026/454/272 mln NYSE Dec/Adv/Vol 2019/311/80 mln
09:40 am : Less than a week after the Dow, S&P 500 and Nasdaq finally got back to levels prior to the global sell-off on February 27 tied to a possible unwinding of the yen carry trade, all three indices this morning are succumbing to the resurfacing of similar concerns. This time around, higher than expected GDP and CPI reports from China have provoked fears of a possible rate hike, which may in turn lead to a resurgence in risk aversion similar to that exhibited throughout the month of March.
While it is likely investors would be taking money off the table anyway today, with the Dow posting its 13th gain in 14 days and closing at record levels, a sense the market is overextended has been exacerbated by the sell-off in Asian markets and overshadowing another round of better than expected earnings reports. DJ30 -50.71 NASDAQ -17.50 SP500 -7.03 NASDAQ Vol 92 mln NYSE Vol 50 mln
09:15 am : S&P futures vs fair value: -7.0. Nasdaq futures vs fair value: -9.0.
09:00 am : S&P futures vs fair value: -7.0. Nasdaq futures vs fair value: -8.0. The stage remains set for stocks to open on a downbeat note, but it is worth noting that early nervousness tied to a possible unwinding in the yen carry trade continues to abate. Futures still trades below fair value, signaling a lower open for the cash market, but it appears investors are merely using renewed concerns the Chinese government may step up its efforts to curb speculative buying interest as another excuse to consolidate a U.S. market that is ripe for a pullback. As a reminder, the variances in the Chinese economy and financial markets have only a marginal impact on the U.S. economy.
08:33 am : S&P futures vs fair value: -7.3. Nasdaq futures vs fair value: -9.5. Futures trade has improved slightly since the last update, as the bulk of earnings continue to check in above analysts' estimates; but early indications still point to a sharply lower open for stocks. Meanwhile, investors are sifting through the latest read on labor conditions. Initial claims, which were compiled during the same week as the crucial monthly payrolls report, fell 4,000 to 339,000 (consensus 320K) but are still at high levels, again signaling a softening in the job market. The yield on the 10-year note (+5/32) has fallen to 4.63% from 4.64% prior to the report.
08:00 am : S&P futures vs fair value: -8.2. Nasdaq futures vs fair value: -11.0. As evidenced by the late-day selling pressure that closed the indices off their highs yesterday, it's not surprising to see some of that consolidation attempt carrying over into this morning's pre-market action, especially with the Dow still managing to finish in record territory.
Investors are also taking a bearish cue from a sell-off in overseas markets as concerns of a possible rate hike in China renew fears that an unwinding of the yen carry trade may lead to a liquidity crisis as investors become more risk averse. Such concerns so far are overshadowing this week's largest batch of earnings reports which, on balance, are better than expected.
06:17 am : S&P futures vs fair value: -8.4. Nasdaq futures vs fair value: -10.8.
http://biz.yahoo.com/mu/update.html
4:20 pm : With conviction on the part of buyers lagging all day and the Dow closing in record territory a day earlier, it wasn't surprising to see the blue-chip index take a bit of a breather Thursday. Be that as it may, the blue-chip index still eked out enough of a gain to extend its winning streak to six and close at another new all-time high. The major averages finished mixed for a third straight session as the tech-heavy Nasdaq languished again as investors remained cautious ahead of more key earnings reports.
It is worth noting, though, that things could have been a lot worse, given the decidedly bearish tone coming into today's trading. Before the bell, the market had all of the makings for round two, albeit a much less dramatic sequel, of the Shanghai sell-off that triggered widespread panic on February 27. Higher than expected GDP and CPI reports from China initially renewed concerns about the Chinese government stepping up its efforts to curb speculative buying interest with a possible rate hike.
The news roiled overseas markets as Japan's Nikkei 225 fell 1.7%, Hong Kong's Hang Seng Index plunged 2.3% and the once unknown Shanghai stock exchange tumbled 4.5%. Fortunately for the bulls, fears of a possible unwinding in the yen carry trade and resurgence in risk aversion, similar to that exhibited throughout the month of March in the aftermath of the Asian contagion, continued to subside as the day wore on. The European bourses as well as the major U.S. averages posted only fractional declines.
From a leadership standpoint, six of 10 sectors posted losses. Energy (-1.0%) paced the way lower as a 2.1% drop in oil prices diminished the desire to own the likes of explorers and refiners. Crude for May delivery, which expires tomorrow, closed near $61.80/bbl following reports that Enbridge resumed shipments through a previously shutdown pipeline from Canada, last year's biggest source of U.S. crude-oil imports.
Evidently lower oil prices did little to excite consumers as the Discretionary turned in the day's second worst performance. Everything from retailers to autos to cable companies were weak, but hotels were the sector's biggest disappointment after Marriott International (MAR 48.12 -3.75) issued disappointing RevPAR guidance.
With Google's (GOOG 471.27 -4.74) earnings out after the close, and rival Yahoo! (YHOO 27.50 -0.80) shocking Wall Street yesterday with its disappointing Q1 report, Technology was in focus again Thursday. Yahoo! tacked a nearly 3% decline onto yesterday's 11% drubbing while eBay (EBAY 33.16 -1.29) also weighed heavily on the Internet Services group. A suggested holding in the Briefing.com Active Portfolio, eBay posted a 52% rise in Q1 profits and raised its full-year earnings and revenue forecasts; but with expectations running high ahead of its report last night, investors were tempted to lock in some of its 15% year-to-date advance. One bright spot for tech was Intel (INTC 21.81 +0.46), another suggested holding which surged 2.2% after being upgraded. Intel was an integral reason the Dow hit a new record again and why the tech sector's decline was minimal.
On the positive side of things, Health Care was the day's standout, with the bulk of sector support coming from Biotech (+3.4%), today's best performing S&P industry group. Amgen (AMGN 62.32 +2.31) staged a relief rally following upbeat results from a study regarding its blockbuster Aranesp drug while investors also applauded an upbeat Q1 report from Gilead Sciences (GILD 81.67 +3.24). BTK +0.7% DJ30 +4.79 DJTA +0.7% DJUA -0.4% DOT -0.6% NASDAQ -5.15 R2K -0.8% SOX +0.5% SP400 -0.4% SP500 -1.77 XOI -0.8% NASDAQ Dec/Adv/Vol 1988/1023/2.04 bln NYSE Dec/Adv/Vol 2122/1117/1.48 bln
3:30 pm : The market continues to show good resilience going into the close, especially after the stage was set for such a huge disappointment before the market even opened. The Dow appears poised to make it six for six while tech investors erring on the side of caution ahead of earnings from Google (GOOG 473.90 -2.11) after the bell position the Nasdaq to post its third straight decline.
The S&P 500, still plagued by split sector leadership, looks like it too will close with little fanfare as it has been mired in a 9-point range all day.DJ30 +13.32 NASDAQ -4.75 SP500 -0.82 NASDAQ Dec/Adv/Vol 1881/1105/1.77 bln NYSE Dec/Adv/Vol 2100/1112/1.30 bln
3:00 pm : With oil prices recently closing and the bond market relatively stagnant all day, the market is currently lacking the necessary catalysts to support the bull's uphill battle to lift blue chips for a 14th time in 15 days.
The Dow has recently bounced back into positive territory but an intraday gain of less than 0.1% leaves the door wide open for just one of its 30 components to slip up and snap a five-day winning streak, especially with Dow gains and losses being evenly matched. DJ30 +6.47 NASDAQ -5.09 SP500 -1.47 NASDAQ Dec/Adv/Vol 1863/1117/1.66 bln NYSE Dec/Adv/Vol 2083/1116/1.18 bln
2:30 pm : In similar fashion to yesterday's late-day breakdown, stocks have succumbed to some afternoon consolidation. This time around, though, market gains were so minimal that a renewed wave of modest selling pressure has been enough to push the major averages back below the flat line.
The most noticeable contributors to the recent pullback have been collapses in Financials and Technology, which removes leadership from two sectors that combine to account for nearly 37% of the total weighting on the S&P 500. DJ30 -3.58 NASDAQ -4.14 SP500 -2.05 NASDAQ Dec/Adv/Vol 1773/1175/1.53 bln NYSE Dec/Adv/Vol 1880/1296/1.08 bln
2:00 pm : More of the same for stocks as equities remain on the offensive but market internals still hold a negative slant. Decliners on the NYSE hold a nearly 3-to-2 edge over advancers while those on the Nasdaq hold a 4-to-3 margin.
A split ratio of up to down volume, though, paints a more accurate picture since the large-cap names acting as this week's biggest sources of support tend to be widely held and enjoy more institutional participation. AMD, PFE, and SGP are up 4.5% on average today and are among the most actively traded NYSE-listed securities, accounting for roughly 10% of the total volume on the Big Board. DJ30 +24.70 NASDAQ +2.38 SP500 +1.35 NASDAQ Dec/Adv/Vol 1694/1221/1.40 bln NYSE Dec/Adv/Vol 1893/1275/990 mln
1:30 pm : Not much has changed since the last update, but the Dow continues to inch its way even further into unchartered territory. Even though the index's intraday gain remains modest in scope (+0.2%), the psychological impact of it hitting new all-time highs is helping to provide a floor of improved sentiment across the board.
Intel (INTC 21.89 +0.54) is pacing the way with a 2.5% advance among the 21 components trading higher following an analyst upgrade. Another notable Dow winner is Honeywell (HON 49.21 +1.00), which is hitting fresh multi-year highs heading into its Q1 results tomorrow morning. Altria Group (MO 69.36 -0.72) remains the Dow's worst performer today (-1.0%) after its quarterly results fell shy of analysts' expectations. DJ30 +24.48 NASDAQ +3.86 SP500 +1.33 NASDAQ Dec/Adv/Vol 1629/1278/1.31 bln NYSE Dec/Adv/Vol 1832/1308/936 mln
1:00 pm : Stocks are quietly extending their reach to the upside as investors continue to embrace upside leadership from the S&P 500's four most heavily weighted sectors. Health Care is now turning in the best performance, tacking a 0.7% gain on to its 6.9% year-to-date advance.
Aside from renewed enthusiasm for Amgen (AMGN 63.12 +3.11) shares giving a boost to Biotech (+4.0%), the group is also getting a lift from a handful of names (e.g. MEDI +2.8%, CELG +4.7%) that have been mentioned in the past as LBO/acquisition candidates. Pharmaceuticals (+1.1%) also rank among today's best performers as Schering-Plough (SGP 31.02 +2.47) soars nearly 9% to a multi-year high after posting a 55% rise in Q1 earnings.BTK +1.4% DJ30 +15.68 NASDAQ +3.71 SP500 +1.21 NASDAQ Dec/Adv/Vol 1701/1173/1.22 bln NYSE Dec/Adv/Vol 1981/1135/860 mln
12:30 pm : Buyers continue to show some resolve, kicking off the afternoon session by lifting the major averages into positive territory for the first time today. The Financials sector turning the corner returns some very influential leadership. Specialized Financials (+0.8%) and Thrifts & Mortgage (+0.8%) have recently broken into today's top ten.
Separately, the Philly Fed recently checked in below forecasts; but investors so far appear somewhat relieved that the report showed overall activity in the region's manufacturing sector was steady this month and that new orders edged higher. DJ30 +6.90 NASDAQ +2.38 SP500 +0.56 NASDAQ Dec/Adv/Vol 1710/1147/1.08 bln NYSE Dec/Adv/Vol 2033/1073/760 mln
12:00 pm : The indices are trading just below the flat line and well off their opening lows midday as investors try to look past a sell-off in Asian markets sparking early concerns of a liquidity crisis and overbought market conditions.
With the Dow posting its 13th gain in 14 days and closing at record levels yesterday, a sense the market is overextended was exacerbated early on by renewed worries the Chinese government may step up its efforts to curb speculative buying interest. Higher than expected GDP and CPI reports from China had provoked concerns about a possible rate hike, which may in turn lead to an unwinding in the yen carry trade and resurgence in risk aversion similar to that exhibited throughout the month of March. However, such concerns continue to abate as participants still find value across a handful of sectors.
Of the five sectors trading lower, Energy (-0.9%) paces the way as a 2.0% drop in oil prices makes everything from explorers to refiners less attractive. Consumer Discretionary ranks second as disappointing RevPAR guidance from Marriott International (MAR 48.51 -3.36) earmarks Hotels (-2.5%) as today's worst performing S&P industry group.
On the positive side of things, Industrials is turning in the best performance, benefiting primarily from strength in Railroads (+2.6%) after Union Pacific (UNP 118.30 +4.52) handily topped Wall Street expectations citing improved margins and pricing. Transportation stocks are getting an added boost from oil's sharp downturn.
Health Care is the only other sector posting a respectable gain, but is not getting much of a lift from Merck's (MRK 49.92 +0.23) in-line report. The bulk of sector support is coming from Biotech (+3.3%) fueled by a relief rally in Amgen (AMGN 63.00 +2.99), following upbeat results from a study regarding its blockbuster Aranesp drug, as well as an upbeat Q1 report from Gilead Sciences (GILD 81.73 +3.30) last night. DJ30 -7.21 NASDAQ -1.60 SP500 -0.75 NASDAQ Dec/Adv/Vol 1884/954/960 mln NYSE Dec/Adv/Vol 2090/985/660 mln
11:30 am : A renewed wave of buying interest within the last 30 minutes now leaves all three major indices at their best levels of the morning and inching closer to the unchanged mark. While another turnaround in Technology is among the most noticeable reasons for the market's latest recovery, oil prices recently plunging to session lows below $62/bbl are the driving catalysts behind the improved sentiment.
Crude for May delivery, which expires tomorrow, is now down 2.3% near $61.70/bbl following reports that Enbridge has resumed shipments through a previously shutdown pipeline from Canada, last year's biggest source of U.S. crude-oil imports. Crude was down as much as 2.8% at $61.34/bbl.DJ30 -15.07 NASDAQ -4.48 SP500 -2.05 NASDAQ Dec/Adv/Vol 1930/799/790 mln NYSE Dec/Adv/Vol 2144/884/550 mln
11:00 am : The market's recent attempts to shrug off early consolidation efforts tied largely to overseas weakness have run into some resistance. The Tech sector's failure to stay positive has removed some notable leadership. Novellus Systems (NVLS 31.06 -1.65) is the sector's biggest laggard (-5.0%) after missing analysts' expectations and issuing weak bookings guidance.
Not even the defensive characteristics of the Health Care sector (+0.2%) have been able to convincingly attract buyers. While Biotech remains the sector's best performer (+2.9%), Managed Health (-2.7%) earmarked as today's worst performing S&P industry group is acting as an offset. Unitedhealth Group (UNH 52.05 -2.16) is plunging 4% after posting lower than expected Q1 revenue and forecasting higher medical costs for the full year. DJ30 -35.44 NASDAQ -8.96 SP500 -4.18 NASDAQ Dec/Adv/Vol 1919/810/668 mln NYSE Dec/Adv/Vol 2099/873/442 mln
10:30 am : The major averages are still in negative territory but continue to trade at improved levels. In fact, the Dow, S&P 500 and Nasdaq have seen their recent losses more than halved as the Tech and Industrials sectors turn the corner. The latter is benefiting largely from strength in Railroads (+2.0%), which has climbed into today's top ten after Union Pacific (UNP 115.94 +2.16) handily topped expectations with a 24% rise in Q1 net income improved margins and pricing.
Transportation stocks are getting an additional lift as oil prices languish near session lows. Technology's improved stance has come largely on the back of a 1.2% surge in Hewlett-Packard (HPQ 41.47 +0.49) following reports that it captured more of the PC during the first quarter. DJ30 -12.53 DJTA +0.3% NASDAQ -6.24 SP500 -2.35 NASDAQ Dec/Adv/Vol 2015/663/496 mln NYSE Dec/Adv/Vol 2180/722/296 mln
10:00 am : The indices are off their opening lows but haven't staged enough of a rebound yet to make a significant change in the standings. Nine out of 10 sectors are still trading lower, paced by a 0.7% decline in Materials. That isn't all that surprising, though, since it ranks as this year's second best performing sector (+10.6%) and economic news out of Asia raise concerns about China's longstanding appetite for commodities. Energy is turning in a similarly dismal performance, as oil stocks become less attractive in the face of a 2.0% sell-off in crude prices below $62/bbl. The absence of leadership from more influential areas like Financials and Technology is also acting as an overhang.
Health Care, however, has recently turned positive and is the biggest reason behind the market's improved stance. A relief rally in Amgen (AMGN 63.63 +3.62), following upbeat results from a study regarding its blockbuster drug Aranesp, is providing the bulk of sector support. Biotech (+2.8%) ranks as today's second best performing S&P industry group and is also getting a lift from Gilead Sciences (GILD 79.66 +1.23) after it posted a 55% rise in Q1 earnings last night. BTK +0.1% DJ30 -35.43 NASDAQ -13.31 SP500 -5.59 XOI -0.7% NASDAQ Dec/Adv/Vol 2026/454/272 mln NYSE Dec/Adv/Vol 2019/311/80 mln
09:40 am : Less than a week after the Dow, S&P 500 and Nasdaq finally got back to levels prior to the global sell-off on February 27 tied to a possible unwinding of the yen carry trade, all three indices this morning are succumbing to the resurfacing of similar concerns. This time around, higher than expected GDP and CPI reports from China have provoked fears of a possible rate hike, which may in turn lead to a resurgence in risk aversion similar to that exhibited throughout the month of March.
While it is likely investors would be taking money off the table anyway today, with the Dow posting its 13th gain in 14 days and closing at record levels, a sense the market is overextended has been exacerbated by the sell-off in Asian markets and overshadowing another round of better than expected earnings reports. DJ30 -50.71 NASDAQ -17.50 SP500 -7.03 NASDAQ Vol 92 mln NYSE Vol 50 mln
09:15 am : S&P futures vs fair value: -7.0. Nasdaq futures vs fair value: -9.0.
09:00 am : S&P futures vs fair value: -7.0. Nasdaq futures vs fair value: -8.0. The stage remains set for stocks to open on a downbeat note, but it is worth noting that early nervousness tied to a possible unwinding in the yen carry trade continues to abate. Futures still trades below fair value, signaling a lower open for the cash market, but it appears investors are merely using renewed concerns the Chinese government may step up its efforts to curb speculative buying interest as another excuse to consolidate a U.S. market that is ripe for a pullback. As a reminder, the variances in the Chinese economy and financial markets have only a marginal impact on the U.S. economy.
08:33 am : S&P futures vs fair value: -7.3. Nasdaq futures vs fair value: -9.5. Futures trade has improved slightly since the last update, as the bulk of earnings continue to check in above analysts' estimates; but early indications still point to a sharply lower open for stocks. Meanwhile, investors are sifting through the latest read on labor conditions. Initial claims, which were compiled during the same week as the crucial monthly payrolls report, fell 4,000 to 339,000 (consensus 320K) but are still at high levels, again signaling a softening in the job market. The yield on the 10-year note (+5/32) has fallen to 4.63% from 4.64% prior to the report.
08:00 am : S&P futures vs fair value: -8.2. Nasdaq futures vs fair value: -11.0. As evidenced by the late-day selling pressure that closed the indices off their highs yesterday, it's not surprising to see some of that consolidation attempt carrying over into this morning's pre-market action, especially with the Dow still managing to finish in record territory.
Investors are also taking a bearish cue from a sell-off in overseas markets as concerns of a possible rate hike in China renew fears that an unwinding of the yen carry trade may lead to a liquidity crisis as investors become more risk averse. Such concerns so far are overshadowing this week's largest batch of earnings reports which, on balance, are better than expected.
06:17 am : S&P futures vs fair value: -8.4. Nasdaq futures vs fair value: -10.8.
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