AI
Friday, April 20, 2007 9:49:06 PM
Market Update 070420
http://biz.yahoo.com/mu/update.html
4:20 pm : Stocks charged out of the gate Friday as buyers rallied around another batch of better than expected quarterly results while sellers, expecting a worst-case scenario for the Q1 earnings season, ran for cover.
For a third straight day the Dow closed in record territory, just 38 points away from hitting the 13,000 milestone, and finished the week up 2.8%. The S&P 500, whose five-day winning streak was snapped yesterday, turned in the next best performance among the majors, while the Nasdaq, fresh off its third consecutive decline, closed just below a new six-year high. All 10 economic sectors closed higher.
With analysts ratcheting their Q1 EPS growth estimates down from almost 9% three months ago to just above 3%, and several influential names being eyed for more clarity about growth prospects, Caterpillar (CAT 71.82 +3.20) was among the day's biggest surprises after handily topping Wall Street expectations and raising its full-year outlook.
Fellow Dow component Honeywell (HON 51.40 +2.34) turned in an even stronger performance, soaring 4.8% to a multi-year high after posting a 21% rise in Q1 earnings and then boosting its 2007 guidance as well. Providing additional support for the Industrials sector were transportation stocks, which completely ignored a 2.7% surge in oil prices. The Dow Jones Transportation Average, an economically-sensitive proxy, also closed at an all-time high.
Taking full advantage of higher oil prices, though, was Energy. Crude for May delivery, which expired today, surged 2.7% to $ 63.52/bbl amid growing worries that tomorrow's presidential election in Nigeria, one of the biggest sources of U.S. oil imports, may result in possible shipment disruptions. As the day's best performing sector, its biggest boost came from a 3.0% surge in Exxon Mobil (XOM 79.76 +2.30), which reports earnings next week. Schlumberger (SLB 75.03 +0.71) posting a 63% jump in Q1 profits provided some sense that sector estimates are too low.
Evidently, surging oil prices didn't completely upset consumers. The Consumer Discretionary sector also provided some notable upside leadership. Auto Parts & Equipment (+5.6%) was the day's best performing S&P industry group as shareholders applauded a 38% jump in Q2 net profits on record sales from Johnson Controls (JCI 102.25 +4.65).
Specialty Consulting Services (+3.2%) ranked second among the more than 130 S&P industry groups to post gains. H&R Block (HRB 22.56 +0.73), a suggested holding in our Active Portfolio, reached an agreement to sell its OptionOne subprime mortgage businesss.
Further proof that first quarter profit growth won't be as dismal as so many on Wall Street initially feared was also witnessed in Technology, a sector pegged to be a significant contributor to earnings growth this year. Last night, Google (GOOG 482.91 +11.26) beat analysts' estimates for the 10th time in 11 tries since going public with a 69% surge in Q1 profits. Its blowout quarter helped to restore some confidence among tech investors.
Above average volume, due in part to options expiration, and the market closing near session highs, set a good tone entering the weekend. Given the slightly negative market breadth over the last three sessions, a decidedly bullish sentiment today was also encouraging. Advancers outpaced decliners on the NYSE by a 3-to-1 margin while those on the Nasdaq held a 2-to-1 edge. BTK +1.1% DJ30 12961.98 DJTA +0.8% DJUA +1.0% DOT +0.6% NASDAQ 2526.39 NQ100 +0.7% R2K +1.2% SOX +0.2% SP400 +1.0% SP500 1484.35 XOI +1.5% NASDAQ Dec/Adv/Vol 944/2076/2.17 bln NYSE Dec/Adv/Vol 729/2517/1.82 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 15th time in 16 sessions and is now up almost 4% for the year, all of which has come this month.
The Russell 2000, though, is faring even better than the blue chips, as has been the case for several years, as renewed optimism on the earnings front, especially in tech, makes the faster growing small cap names even more attractive. DJ30 +126.45 NASDAQ +17.85 R2K +1.1% SP500 +10.30 NASDAQ Dec/Adv/Vol 974/2039/1.78 bln NYSE Dec/Adv/Vol 778/2446/1.48 bln
3:00 pm : Unlike the late-day selling pressure seen over the last two sessions to close the indices off their highs, onward and upward appears to be this afternoon's driving mantra heading into the final hour of trading.
While the major averages have yet to revisit their highest levels of the day, the Dow's intraday gain is back at 1.0% and, more notably, above average volume, due in part to options expiration, is lending even more conviction behind the indices' broad-based move to the upside. More than 1.0 bln shares NYSE exchanged hands by 12:30 ET while the Nasdaq could reach 2.0 bln shares. DJ30 +130.59 NASDAQ +21.40 SP500 +11.32 NASDAQ Dec/Adv/Vol 1002/1995/1.66 bln NYSE Dec/Adv/Vol 834/2392/1.38 bln
2:30 pm : Evidently surging oil prices aren't completely upsetting consumers as Discretionary (+0.8%) now ranks among the day's better performing sectors. Auto Parts & Equipment (+4.3%) is now today's best performing S&P industry group as shareholders continue to applaud Johnson Controls (JCI 101.80 +4.20) posting a 38% jump in Q2 net profits on record sales. Motorcycles is another bright spot as Harley-Davidson (HOG 64.56 +1.34) tacks a 2.1% gain onto yesterday's 3.2% earnings-induced surge.
The sector's bigger surprise, though, is Homebuilding (+2.1%), which has recently broken into the top ten. Then again, with some short covering activity also exacerbating today's gains since, and homebuilders are among the most heavily shorted industry groups, bargain hunters apparently feel this year's worst performing group (-14.2%) is due for a bounce. Earlier, Treasury Secretary Paulson also said the U.S. housing market has had its correction and is 'at or near' the bottom. ..HGX +1.8%.DJ30 +117.92 NASDAQ +17.08 SP500 +10.43 NASDAQ Dec/Adv/Vol 1028/1944/1.56 bln NYSE Dec/Adv/Vol 858/2363/1.31 bln
2:00 pm : After recently climbing to afternoon highs, the market's momentum has stalled somewhat as oil makes another push to its highs of the session. Crude for May delivery is now up 2.3% and above $63/bbl heading into the close of trading on the NYMEX and its subsequent expiration.
The more heavily traded June contract recently eclipsed $64/bbl, helping Energy (+1.3%) maintain its lead as today's best performing sector, but also serving as a reminder for consumers that retail gas prices are near record highs at just below $3/gallon going into the weekend. DJ30 +103.74 NASDAQ +14.92 SP500 +8.95 NASDAQ Dec/Adv/Vol 1047/1897/1.44 bln NYSE Dec/Adv/Vol 850/2337/1.22 bln
1:30 pm : Albeit still trading in roughly the same ranges, the indices have inched a bit higher since the last update as Financials bounces off session lows. While it still ranks as today's worst performing S&P 500 sector, with an intraday gain of only 0.4%, half of that advance has been realized since Treasury Secretary Paulson said he believes problems in the subprime lending market will be contained.
The sector has been in focus after American Express (AXP 60.30 +1.35) posted a 21% rise in Q1 profits, leaving it among today's best performing Dow components (+2.3%). However, follow-through selling in Banc of America (BAC 50.50 -0.41), after its Q1 report failed to impress investors yesterday, has removed leadership from the sector's second most influential component. Capital One Financial (COF 72.78 -4.55) is the sector's worst performer, plunging nearly 6% after missing analysts' expectations with a 24% drop in Q1 profits and cutting its 2007 earnings outlook. DJ30 +113.34 NASDAQ +16.28 SP500 +9.89 NASDAQ Dec/Adv/Vol 1082/1853/1.33 bln NYSE Dec/Adv/Vol 876/2297/1.16 bln
1:00 pm : With the little in the way of new catalysts to keep sellers sidelined going into the weekend, investors have been waiting to see if today's scheduled Fed speak would offer another reason to keep buying efforts fully intact. At the bottom of the hour, Fed Governor Frederic Mishkin said the Fed must avoid losing credibility with the markets, while remaining data dependent, and that he expects GDP to hit at a 'moderate' rate.
The fact that his prepared remarks didn't embark on anything the market hasn't heard before, however, merely leaves investors treading water in hopes that the upcoming Q&A session doesn't offer any surprises to give the bears an excuse for their voices to be heard. DJ30 +104.93 NASDAQ +13.29 SP500 +8.30 NASDAQ Dec/Adv/Vol 1129/1782/1.20 bln NYSE Dec/Adv/Vol 841/2306/1.07 bln
12:30 pm : No real change in sentiment as the afternoon session gets underway. The Dow still leads the way among the majors (+0.8%), with 23 of its 30 components posting gains. The S&P 500, which had its five-day winning streak snapped yesterday, is up 0.6% as all 10 sectors remain positive.
The Nasdaq is posting a similar 0.6% advance, despite getting no leadership from semiconductors. Novellus Systems (NVLS 31.47 +0.67) is the one notable exception (+2.2%), but that's largely due to a belief that yesterday's nearly 6% sell-off was overdone.
DJ30 +108.00 NASDAQ +14.68 SOX -0.3% SP500 +8.43 NASDAQ Dec/Adv/Vol 942/1941/1.10 bln NYSE Dec/Adv/Vol 805/2300/996 mln
12:00 pm : Stocks are off their best levels midday but still staging a broad-based rally amid renewed optimism on the earnings front.
With so many on Wall Street fearing the worst, or at least the beginning of the end to 14 straight quarters of double-digit profit growth for the S&P 500, another round of upbeat reports last night and today have helped quell the worst of such concerns.
Among the biggest names being eyed for more clarity about growth prospects, especially in a tech sector pegged to be a significant contributor to earnings growth this year, has been Google (GOOG 487.83 +16.18). It beat analysts' estimates for the 10th time in 11 tries since going public with a 69% surge in Q1 profits after the close, and its blowout quarter is helping to restore some confidence among tech investors.
One of the day's biggest surprises, though, has been Caterpillar (CAT 71.85 +3.23), which handily topped Wall Street expectations and raised its full-year outlook. Honeywell (HON 50.56 +1.50), which is up 3.1% at a fresh multi-year high after reporting a 21% rise in Q1 earnings and then boosting its 2007 guidance as well, is another component lifting the Dow to within 50 points of hitting the 13,000 milestone earlier.
Also helping to earmark Industrials (+0.8%) as one of today's best performing sectors have been transportation stocks, which have completely ignored a 1.6% surge in oil prices. The Dow Jones Transportation Average, an economically-sensitive proxy, has hit a new all-time high alongside its Dow Industrials brethren. DJ30 +101.58 DJTA +0.6% NASDAQ +13.80 SP500 +8.21 NASDAQ Dec/Adv/Vol 938/1910/978 mln NYSE Dec/Adv/Vol 734/2358/904 mln
11:30 am : Even though the indices continue to sport solid gains across the board, oil prices hitting fresh session highs have given the bears some fodder to bring market valuations back into question. Crude for May delivery is now up 1.7% near $62.90/bbl amid growing worries that tomorrow's presidential election in Nigeria, the fifth-largest source of U.S. oil imports last year, may result in possible shipment disruptions.
Such concerns are prompting traders to cover their shorts going into the weekend. As a reminder, the May contract expires today, leaving more of the open interest in the June crude contract which is near $64/bbl (+0.9%). DJ30 +102.32 NASDAQ +16.19 SP500 +8.70 NASDAQ Dec/Adv/Vol 820/1984/842 mln NYSE Dec/Adv/Vol 608/2415/792 mln
11:00 am : Not much has changed since the last update as the bulls remain in complete control of today's action. On the Dow, 26 of 30 components are trading higher, led by a 5% surge in Caterpillar (CAT 72.14 +3.52).
Gains of more than 2.6% from Honeywell (HON 50.35 +1.29) and American Express (AXP 60.64 +1.69), following solid earnings reports as well, also keep the Dow on pace for its best monthly performance (+4.7%) since December 2003. After opening at a new all-time high, McDonald's (MCD 48.00 -0.78) is now the index's worst performer (-1.6%). DJ30 +121.74 NASDAQ +19.45 SP500 +10.83 NASDAQ Dec/Adv/Vol 780/1977/740 mln NYSE Dec/Adv/Vol 568/2418/704 mln
10:30 am : The major averages appear to have settled into a relatively narrow range. One thing noticeably evident today, that has been absent over the last three sessions, are bullish market internals. Advancers outpace decliners on the NYSE by a nearly 5-to-1 margin while those on the Nasdaq hold a nearly 3-to-1 edge. Decliners have held a slight edge everyday this week except Monday.
It is worth noting, however, that without more convincing leadership from Financials, whose 0.5% intraday advance is respectable but ranks as the day's second smallest gain among the 10 sectors trading higher this morning, it becomes more understandable why the S&P 500 (+0.8%) is not turning in as impressive a performance as it did on Monday (+1.1%).DJ30 +117.43 NASDAQ +20.05 SP500 +11.33 NASDAQ Dec/Adv/Vol 705/1936/568 mln NYSE Dec/Adv/Vol 499/2398/566 mln
10:00 am : The indices are off their opening highs but still trading sharply higher as buying remains decidedly widespread. Of the 147 S&P industry groups, 143 are trading higher, paced by a 7.1% surge in Specialty Consulting Services. H&R Block (HRB 23.39 +1.56), a suggested holding in our Active Portfolio, reached an agreement to sell its OptionOne subprime mortgage businesss. With investors unsure about the ramifications of subprime mortgage woes on the rest of the economy, HRB's announcement is also contributing to the market's positive underlying tone.
Turning in even better performances than Consumer Discretionary (+0.8%) is Energy (+1.3%). The sector is getting a lift from a 1.0% rise in oil prices but even more of a boost from Schlumberger (SLB 76.14 +1.82), which said Q1 profits jumped 63% on strong revenue growth. DJ30 +110.60 NASDAQ +20.01 SP500 +11.10 XOI +0.6% NASDAQ Dec/Adv/Vol 499/1976/322 mln NYSE Dec/Adv/Vol 359/2265/366 mln
09:40 am : As expected, stocks charge out of the gate as another batch of better than expected earnings reports provides further proof that first quarter profit growth won't be as dismal as so many on Wall Street initially feared. Caterpillar (CAT 72.37 +3.75) and Honeywell (HON 51.01 +1.94) topping forecasts and raising their full-year outlooks are among the biggest catalysts opening the Dow in record territory, especially amid so much concern about a slowing economy.
As evidenced by a similar 1.0% rally on the Nasdaq, a blowout quarterly report from Google (GOOG 490.60 +18.95), prompting several analysts to raise their price targets, has renewed optimism about the tech sector's growth prospects. DJ30 +135.47 NASDAQ +25.24 SP500 +12.83 NASDAQ Vol 156 mln NYSE Vol 120 mln
09:15 am : S&P futures vs fair value: +10.0. Nasdaq futures vs fair value: +16.0.
09:00 am : S&P futures vs fair value: +9.3. Nasdaq futures vs fair value: +14.8. The stage remains set for stocks to end a solid week in even stronger fashion. The Dow, S&P 500 and Nasdaq are already up 1.6%, 1.2% and 0.5%, respectively, this week, with the tech-heavy latter looking to make up the most ground today on the back of Google. It beat analysts' estimates for the 10th time in 11 tries since going public with a 69% surge in Q1 profits.
Tech is looking to get an additional boost from strength in semiconductors following encouraging developments out of Advanced Micro Devices (AMD) regarding cost cuts and the price battle between AMD and Intel Corp. (INTC). It is also worth noting that the absence of any notable economic data this morning is placing even more emphasis on earnings and guidance.
08:30 am : S&P futures vs fair value: +9.0. Nasdaq futures vs fair value: +15.0. Still shaping up for the major averages to start on an upbeat note as better than expected earnings reports continue to trickle in. McDonald's (MCD) looks to open at a new all-time high after matching recently raised guidance and announcing an agreement to franchise 1600 stores in Latin America and the Caribbean.
Fellow Dow component Pfizer (PFE) handily topped expectations; but with PFE shares up 7% this month alone and Google's impressive quarter offering some optimism about the Tech sector's growth prospects, it won't be surprising to see some money rotate out of defensive areas like Health Care and into a more growth-oriented areas like Technology.
http://biz.yahoo.com/mu/update.html
4:20 pm : Stocks charged out of the gate Friday as buyers rallied around another batch of better than expected quarterly results while sellers, expecting a worst-case scenario for the Q1 earnings season, ran for cover.
For a third straight day the Dow closed in record territory, just 38 points away from hitting the 13,000 milestone, and finished the week up 2.8%. The S&P 500, whose five-day winning streak was snapped yesterday, turned in the next best performance among the majors, while the Nasdaq, fresh off its third consecutive decline, closed just below a new six-year high. All 10 economic sectors closed higher.
With analysts ratcheting their Q1 EPS growth estimates down from almost 9% three months ago to just above 3%, and several influential names being eyed for more clarity about growth prospects, Caterpillar (CAT 71.82 +3.20) was among the day's biggest surprises after handily topping Wall Street expectations and raising its full-year outlook.
Fellow Dow component Honeywell (HON 51.40 +2.34) turned in an even stronger performance, soaring 4.8% to a multi-year high after posting a 21% rise in Q1 earnings and then boosting its 2007 guidance as well. Providing additional support for the Industrials sector were transportation stocks, which completely ignored a 2.7% surge in oil prices. The Dow Jones Transportation Average, an economically-sensitive proxy, also closed at an all-time high.
Taking full advantage of higher oil prices, though, was Energy. Crude for May delivery, which expired today, surged 2.7% to $ 63.52/bbl amid growing worries that tomorrow's presidential election in Nigeria, one of the biggest sources of U.S. oil imports, may result in possible shipment disruptions. As the day's best performing sector, its biggest boost came from a 3.0% surge in Exxon Mobil (XOM 79.76 +2.30), which reports earnings next week. Schlumberger (SLB 75.03 +0.71) posting a 63% jump in Q1 profits provided some sense that sector estimates are too low.
Evidently, surging oil prices didn't completely upset consumers. The Consumer Discretionary sector also provided some notable upside leadership. Auto Parts & Equipment (+5.6%) was the day's best performing S&P industry group as shareholders applauded a 38% jump in Q2 net profits on record sales from Johnson Controls (JCI 102.25 +4.65).
Specialty Consulting Services (+3.2%) ranked second among the more than 130 S&P industry groups to post gains. H&R Block (HRB 22.56 +0.73), a suggested holding in our Active Portfolio, reached an agreement to sell its OptionOne subprime mortgage businesss.
Further proof that first quarter profit growth won't be as dismal as so many on Wall Street initially feared was also witnessed in Technology, a sector pegged to be a significant contributor to earnings growth this year. Last night, Google (GOOG 482.91 +11.26) beat analysts' estimates for the 10th time in 11 tries since going public with a 69% surge in Q1 profits. Its blowout quarter helped to restore some confidence among tech investors.
Above average volume, due in part to options expiration, and the market closing near session highs, set a good tone entering the weekend. Given the slightly negative market breadth over the last three sessions, a decidedly bullish sentiment today was also encouraging. Advancers outpaced decliners on the NYSE by a 3-to-1 margin while those on the Nasdaq held a 2-to-1 edge. BTK +1.1% DJ30 12961.98 DJTA +0.8% DJUA +1.0% DOT +0.6% NASDAQ 2526.39 NQ100 +0.7% R2K +1.2% SOX +0.2% SP400 +1.0% SP500 1484.35 XOI +1.5% NASDAQ Dec/Adv/Vol 944/2076/2.17 bln NYSE Dec/Adv/Vol 729/2517/1.82 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 15th time in 16 sessions and is now up almost 4% for the year, all of which has come this month.
The Russell 2000, though, is faring even better than the blue chips, as has been the case for several years, as renewed optimism on the earnings front, especially in tech, makes the faster growing small cap names even more attractive. DJ30 +126.45 NASDAQ +17.85 R2K +1.1% SP500 +10.30 NASDAQ Dec/Adv/Vol 974/2039/1.78 bln NYSE Dec/Adv/Vol 778/2446/1.48 bln
3:00 pm : Unlike the late-day selling pressure seen over the last two sessions to close the indices off their highs, onward and upward appears to be this afternoon's driving mantra heading into the final hour of trading.
While the major averages have yet to revisit their highest levels of the day, the Dow's intraday gain is back at 1.0% and, more notably, above average volume, due in part to options expiration, is lending even more conviction behind the indices' broad-based move to the upside. More than 1.0 bln shares NYSE exchanged hands by 12:30 ET while the Nasdaq could reach 2.0 bln shares. DJ30 +130.59 NASDAQ +21.40 SP500 +11.32 NASDAQ Dec/Adv/Vol 1002/1995/1.66 bln NYSE Dec/Adv/Vol 834/2392/1.38 bln
2:30 pm : Evidently surging oil prices aren't completely upsetting consumers as Discretionary (+0.8%) now ranks among the day's better performing sectors. Auto Parts & Equipment (+4.3%) is now today's best performing S&P industry group as shareholders continue to applaud Johnson Controls (JCI 101.80 +4.20) posting a 38% jump in Q2 net profits on record sales. Motorcycles is another bright spot as Harley-Davidson (HOG 64.56 +1.34) tacks a 2.1% gain onto yesterday's 3.2% earnings-induced surge.
The sector's bigger surprise, though, is Homebuilding (+2.1%), which has recently broken into the top ten. Then again, with some short covering activity also exacerbating today's gains since, and homebuilders are among the most heavily shorted industry groups, bargain hunters apparently feel this year's worst performing group (-14.2%) is due for a bounce. Earlier, Treasury Secretary Paulson also said the U.S. housing market has had its correction and is 'at or near' the bottom. ..HGX +1.8%.DJ30 +117.92 NASDAQ +17.08 SP500 +10.43 NASDAQ Dec/Adv/Vol 1028/1944/1.56 bln NYSE Dec/Adv/Vol 858/2363/1.31 bln
2:00 pm : After recently climbing to afternoon highs, the market's momentum has stalled somewhat as oil makes another push to its highs of the session. Crude for May delivery is now up 2.3% and above $63/bbl heading into the close of trading on the NYMEX and its subsequent expiration.
The more heavily traded June contract recently eclipsed $64/bbl, helping Energy (+1.3%) maintain its lead as today's best performing sector, but also serving as a reminder for consumers that retail gas prices are near record highs at just below $3/gallon going into the weekend. DJ30 +103.74 NASDAQ +14.92 SP500 +8.95 NASDAQ Dec/Adv/Vol 1047/1897/1.44 bln NYSE Dec/Adv/Vol 850/2337/1.22 bln
1:30 pm : Albeit still trading in roughly the same ranges, the indices have inched a bit higher since the last update as Financials bounces off session lows. While it still ranks as today's worst performing S&P 500 sector, with an intraday gain of only 0.4%, half of that advance has been realized since Treasury Secretary Paulson said he believes problems in the subprime lending market will be contained.
The sector has been in focus after American Express (AXP 60.30 +1.35) posted a 21% rise in Q1 profits, leaving it among today's best performing Dow components (+2.3%). However, follow-through selling in Banc of America (BAC 50.50 -0.41), after its Q1 report failed to impress investors yesterday, has removed leadership from the sector's second most influential component. Capital One Financial (COF 72.78 -4.55) is the sector's worst performer, plunging nearly 6% after missing analysts' expectations with a 24% drop in Q1 profits and cutting its 2007 earnings outlook. DJ30 +113.34 NASDAQ +16.28 SP500 +9.89 NASDAQ Dec/Adv/Vol 1082/1853/1.33 bln NYSE Dec/Adv/Vol 876/2297/1.16 bln
1:00 pm : With the little in the way of new catalysts to keep sellers sidelined going into the weekend, investors have been waiting to see if today's scheduled Fed speak would offer another reason to keep buying efforts fully intact. At the bottom of the hour, Fed Governor Frederic Mishkin said the Fed must avoid losing credibility with the markets, while remaining data dependent, and that he expects GDP to hit at a 'moderate' rate.
The fact that his prepared remarks didn't embark on anything the market hasn't heard before, however, merely leaves investors treading water in hopes that the upcoming Q&A session doesn't offer any surprises to give the bears an excuse for their voices to be heard. DJ30 +104.93 NASDAQ +13.29 SP500 +8.30 NASDAQ Dec/Adv/Vol 1129/1782/1.20 bln NYSE Dec/Adv/Vol 841/2306/1.07 bln
12:30 pm : No real change in sentiment as the afternoon session gets underway. The Dow still leads the way among the majors (+0.8%), with 23 of its 30 components posting gains. The S&P 500, which had its five-day winning streak snapped yesterday, is up 0.6% as all 10 sectors remain positive.
The Nasdaq is posting a similar 0.6% advance, despite getting no leadership from semiconductors. Novellus Systems (NVLS 31.47 +0.67) is the one notable exception (+2.2%), but that's largely due to a belief that yesterday's nearly 6% sell-off was overdone.
DJ30 +108.00 NASDAQ +14.68 SOX -0.3% SP500 +8.43 NASDAQ Dec/Adv/Vol 942/1941/1.10 bln NYSE Dec/Adv/Vol 805/2300/996 mln
12:00 pm : Stocks are off their best levels midday but still staging a broad-based rally amid renewed optimism on the earnings front.
With so many on Wall Street fearing the worst, or at least the beginning of the end to 14 straight quarters of double-digit profit growth for the S&P 500, another round of upbeat reports last night and today have helped quell the worst of such concerns.
Among the biggest names being eyed for more clarity about growth prospects, especially in a tech sector pegged to be a significant contributor to earnings growth this year, has been Google (GOOG 487.83 +16.18). It beat analysts' estimates for the 10th time in 11 tries since going public with a 69% surge in Q1 profits after the close, and its blowout quarter is helping to restore some confidence among tech investors.
One of the day's biggest surprises, though, has been Caterpillar (CAT 71.85 +3.23), which handily topped Wall Street expectations and raised its full-year outlook. Honeywell (HON 50.56 +1.50), which is up 3.1% at a fresh multi-year high after reporting a 21% rise in Q1 earnings and then boosting its 2007 guidance as well, is another component lifting the Dow to within 50 points of hitting the 13,000 milestone earlier.
Also helping to earmark Industrials (+0.8%) as one of today's best performing sectors have been transportation stocks, which have completely ignored a 1.6% surge in oil prices. The Dow Jones Transportation Average, an economically-sensitive proxy, has hit a new all-time high alongside its Dow Industrials brethren. DJ30 +101.58 DJTA +0.6% NASDAQ +13.80 SP500 +8.21 NASDAQ Dec/Adv/Vol 938/1910/978 mln NYSE Dec/Adv/Vol 734/2358/904 mln
11:30 am : Even though the indices continue to sport solid gains across the board, oil prices hitting fresh session highs have given the bears some fodder to bring market valuations back into question. Crude for May delivery is now up 1.7% near $62.90/bbl amid growing worries that tomorrow's presidential election in Nigeria, the fifth-largest source of U.S. oil imports last year, may result in possible shipment disruptions.
Such concerns are prompting traders to cover their shorts going into the weekend. As a reminder, the May contract expires today, leaving more of the open interest in the June crude contract which is near $64/bbl (+0.9%). DJ30 +102.32 NASDAQ +16.19 SP500 +8.70 NASDAQ Dec/Adv/Vol 820/1984/842 mln NYSE Dec/Adv/Vol 608/2415/792 mln
11:00 am : Not much has changed since the last update as the bulls remain in complete control of today's action. On the Dow, 26 of 30 components are trading higher, led by a 5% surge in Caterpillar (CAT 72.14 +3.52).
Gains of more than 2.6% from Honeywell (HON 50.35 +1.29) and American Express (AXP 60.64 +1.69), following solid earnings reports as well, also keep the Dow on pace for its best monthly performance (+4.7%) since December 2003. After opening at a new all-time high, McDonald's (MCD 48.00 -0.78) is now the index's worst performer (-1.6%). DJ30 +121.74 NASDAQ +19.45 SP500 +10.83 NASDAQ Dec/Adv/Vol 780/1977/740 mln NYSE Dec/Adv/Vol 568/2418/704 mln
10:30 am : The major averages appear to have settled into a relatively narrow range. One thing noticeably evident today, that has been absent over the last three sessions, are bullish market internals. Advancers outpace decliners on the NYSE by a nearly 5-to-1 margin while those on the Nasdaq hold a nearly 3-to-1 edge. Decliners have held a slight edge everyday this week except Monday.
It is worth noting, however, that without more convincing leadership from Financials, whose 0.5% intraday advance is respectable but ranks as the day's second smallest gain among the 10 sectors trading higher this morning, it becomes more understandable why the S&P 500 (+0.8%) is not turning in as impressive a performance as it did on Monday (+1.1%).DJ30 +117.43 NASDAQ +20.05 SP500 +11.33 NASDAQ Dec/Adv/Vol 705/1936/568 mln NYSE Dec/Adv/Vol 499/2398/566 mln
10:00 am : The indices are off their opening highs but still trading sharply higher as buying remains decidedly widespread. Of the 147 S&P industry groups, 143 are trading higher, paced by a 7.1% surge in Specialty Consulting Services. H&R Block (HRB 23.39 +1.56), a suggested holding in our Active Portfolio, reached an agreement to sell its OptionOne subprime mortgage businesss. With investors unsure about the ramifications of subprime mortgage woes on the rest of the economy, HRB's announcement is also contributing to the market's positive underlying tone.
Turning in even better performances than Consumer Discretionary (+0.8%) is Energy (+1.3%). The sector is getting a lift from a 1.0% rise in oil prices but even more of a boost from Schlumberger (SLB 76.14 +1.82), which said Q1 profits jumped 63% on strong revenue growth. DJ30 +110.60 NASDAQ +20.01 SP500 +11.10 XOI +0.6% NASDAQ Dec/Adv/Vol 499/1976/322 mln NYSE Dec/Adv/Vol 359/2265/366 mln
09:40 am : As expected, stocks charge out of the gate as another batch of better than expected earnings reports provides further proof that first quarter profit growth won't be as dismal as so many on Wall Street initially feared. Caterpillar (CAT 72.37 +3.75) and Honeywell (HON 51.01 +1.94) topping forecasts and raising their full-year outlooks are among the biggest catalysts opening the Dow in record territory, especially amid so much concern about a slowing economy.
As evidenced by a similar 1.0% rally on the Nasdaq, a blowout quarterly report from Google (GOOG 490.60 +18.95), prompting several analysts to raise their price targets, has renewed optimism about the tech sector's growth prospects. DJ30 +135.47 NASDAQ +25.24 SP500 +12.83 NASDAQ Vol 156 mln NYSE Vol 120 mln
09:15 am : S&P futures vs fair value: +10.0. Nasdaq futures vs fair value: +16.0.
09:00 am : S&P futures vs fair value: +9.3. Nasdaq futures vs fair value: +14.8. The stage remains set for stocks to end a solid week in even stronger fashion. The Dow, S&P 500 and Nasdaq are already up 1.6%, 1.2% and 0.5%, respectively, this week, with the tech-heavy latter looking to make up the most ground today on the back of Google. It beat analysts' estimates for the 10th time in 11 tries since going public with a 69% surge in Q1 profits.
Tech is looking to get an additional boost from strength in semiconductors following encouraging developments out of Advanced Micro Devices (AMD) regarding cost cuts and the price battle between AMD and Intel Corp. (INTC). It is also worth noting that the absence of any notable economic data this morning is placing even more emphasis on earnings and guidance.
08:30 am : S&P futures vs fair value: +9.0. Nasdaq futures vs fair value: +15.0. Still shaping up for the major averages to start on an upbeat note as better than expected earnings reports continue to trickle in. McDonald's (MCD) looks to open at a new all-time high after matching recently raised guidance and announcing an agreement to franchise 1600 stores in Latin America and the Caribbean.
Fellow Dow component Pfizer (PFE) handily topped expectations; but with PFE shares up 7% this month alone and Google's impressive quarter offering some optimism about the Tech sector's growth prospects, it won't be surprising to see some money rotate out of defensive areas like Health Care and into a more growth-oriented areas like Technology.
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