AI
Thursday, May 10, 2007 7:22:19 PM
Market Update 070510
http://biz.yahoo.com/mu/update.html
4:20 pm : With a market increasingly sensitive to weak economic data, now that earnings season is all but over, investors found a slew of reasons Thursday to suggest stocks are overbought at current levels.
Yesterday, the S&P 500 finished within 1% of its March 2000 record and the Dow closed at an all-time high for the 21st time this year. Today, the S&P 500 shaved 1.4% off its 6.6% year-to-date advance. The Dow posted its first triple-digit decline since the day this seven-week rally got underway (March 13). All three major averages closed near session lows, suggesting that there is potential for some carry-over weakness tomorrow morning.
Setting the bearish tone for trading today was a plethora of disappointing same-store sales figures. April comps were widely anticipated to be weak, given poor weather, rising gas prices, and an earlier Easter; but no one anticipated it would be the worst April on record. According to the UBS-International Council of Shopping Centers, overall April sales fell 2.3%, the biggest drop since the industry tracker began tracking the data.
Just a day removed from the Fed reiterating its continued concerns about inflation risks, a larger than expected 1.3% rise in import prices last month gave sellers another excuse to question current valuations.
Throw in a wider than expected trade deficit, and a lack of the very deal-making news that has provided a substantial floor of support for stocks of late, and today's pullback wasn't much of a surprise. From our vantage point, we have let readers know that we felt the market had gotten ahead of itself given deteriorating fundamentals.
All 10 economic sectors not only closed lower, but all of them were down at least 1.0% each. Energy (-2.0%) turned in the day's worst performance despite a modest rebound in crude oil prices. It is worth noting, though, that Energy has also been the best performing S&P sector (+15.3%) since stocks bottomed in mid March.
Health Care (-1.9%) was a close second as two of the sector's most heavily-weighted drug names tumbled following an unfavorable FDA ruling. The absence of leadership from Financials was another thorn in the bulls' side Thursday; 85 of its 90 components lost ground. BTK -2.1% DJ30 -147.74 DJTA -1.8% DJUA -1.4% DOT -1.3% NASDAQ -42.60 NQ100 -1.6% R2K -1.9% SOX -2.1% SP400 -1.4% SP500 -21.11 XOI -1.9% NASDAQ Dec/Adv/Vol 2395/671/2.26 bln NYSE Dec/Adv/Vol 2558/733/1.52 bln
3:30 pm : Equities are still sporting hefty losses as buyers remain sidelined going into the close. Consumer Discretionary has recently become the sixth sector to turn in a decline of at least 1.0% on the day as everything from Advertising and Autos to Hotels and Homebuilders succumb to profit taking.
Health Care (-1.4%) has also taken a turn for the worse since the last update. An FDA panel recently voting 15-2 in favor of more restrictions on anemia drug labels has pushed Dow component Johnson & Johnson (63.25 -0.86) and Amgen (AMGN 59.02 -4.08) to session lows. Both stocks are among the Health Care's most influential names, combining to account for nearly 16% of the total weighting in the sector. DJ30 -125.64 NASDAQ -36.45 SP500 -17.65 NASDAQ Dec/Adv/Vol 2354/685/1.82 bln NYSE Dec/Adv/Vol 2488/772/1.27 bln
3:00 pm : Not much has changed over the last hour of trading as the indices have settled into relatively narrow trading ranges. All 10 sectors are still trading lower, five of which are down more than 1.0%. Energy (-1.6%) still paces the way even though oil eked out a modest gain on the day. Coal & Consumable Fuel (-2.4%) is among today's biggest laggards; but it also ranks among this year's top ten performers (+27.4%).
The Materials sector is nipping at Energy's heels with a 1.4% intraday decline. Diversified Metals & Mining also ranks among the worst of the more than 140 S&P industry groups losing ground; but it too has significantly outperformed virtually everything else this year with a 29% return. That includes today's 2.4% pullback.DJ30 -110.70 NASDAQ -30.02 SP500 -15.00 NASDAQ Dec/Adv/Vol 2276/720/1.67 bln NYSE Dec/Adv/Vol 2421/814/1.17 bln
2:30 pm : More of the same for stocks as market internals remain decidedly negative. As reflected in the A/D line, decliners on the NYSE and Nasdaq hold a more than 3-to-1 edge over advancers.
The outsized ratio of down to up volume further dictates the reluctance on the part of buyers as it was only a matter of time for five straight weeks of gains to look overextended. Today's losses now leave the Dow, S&P 500 and Nasdaq trading lower for the week and in jeopardy of having their latest streak snapped. DJ30 -108.65 NASDAQ -28.70 SP500 -14.29 NASDAQ Dec/Adv/Vol 2280/702/1.56 bln NYSE Dec/Adv/Vol 2443/776/1.08 bln
2:00 pm : Buyers are again trying to gain some traction as oil prices slip into the red. Unfortunately for the bulls looking anywhere and everywhere for any positive catalysts to keep a good thing going, oil's reversal has been short lived. Crude for June delivery is back up 0.5% near $61.90/bbl and selling remains widespread across most areas.
Of the 147 S&P industry groups, 142 are now posting losses. Among the only areas attracting buyers are IT Consulting Services (+1.1%), Apparel Retail (+0.8%), and Human Resources (+0.7%). Health Care Facilities and Leisure Products are also in positive territory; but their gains are so miniscule that they barely qualify as such. DJ30 -118.79 NASDAQ -30.62 SP500 -15.46 NASDAQ Dec/Adv/Vol 2359/634/1.45 bln NYSE Dec/Adv/Vol 2503/705/996 mln
1:30 pm : Equities are hitting fresh session lows as the temptation to keep consolidating some of the market's recent advance gets a second wind. Not surprising, most of today's weakness remains concentrated in the areas that have posted the largest gains of late. Energy has been the biggest winner since mid March, up more than 15%.
Materials is posting a similarly disappointing 2.0% decline but ranks as this year's second best performing sector (+14.4%). Industrials (-1.1%) ranks third among today's laggards but with oil prices back above $62/bbl (+1.0%) within the last 20 minutes, transportation stocks have become less attractive. Health Care is also down more than 1.0% but such a pullback barely puts a dent in the 11.1% surge enjoyed since March 13. DJ30 -151.98 DJTA -2.0% NASDAQ -40.16 SP500 -18.93 NASDAQ Dec/Adv/Vol 2323/649/1.32 bln NYSE Dec/Adv/Vol 2482/722/898 mln
1:00 pm : The indices continue to chip away at their intraday losses, but sellers are still in complete control of today's trading. Crude oil pulling back to session lows and now up only 0.3% at $61.73/bbl offers some relief since higher gasoline prices were attributed to such disappointing April retail sales figures.
However, the broad-based nature of today's sell-off on heavier than normal volume implies the bulls will likely lose this round, especially with the Energy sector (-1.7%) slipping even further into the red amid oil's dpwnturn. DJ30 -105.00 NASDAQ -28.25 SP500 -13.05 XOI -1.9% NASDAQ Dec/Adv/Vol 2266/658/1.19 bln NYSE Dec/Adv/Vol 2432/726/806 mln
12:30 pm : The indices are off their worst levels of the session but haven't improved nearly enough to make a significant change in the standings. Sellinf remains the name of the game as 140 out of 147 S&P industry groups are trading lower. Advertising (-3.1%) still leads the way after Interpublic Group (IPG 11.86 -1.08) posted a larger than expected loss in the first quarter.
Adding to the market's recent struggles have been the Dow, S&P 500 and Nasdaq's inability to find support above key technical levels of 13250, 1500 and 2547, respectively. DJ30 -119.14 NASDAQ -30.73 SP500 -14.11 NASDAQ Dec/Adv/Vol 2290/622/1.08 bln NYSE Dec/Adv/Vol 2419/710/726 mln
12:00 pm : Stocks are tumbling across the board midday, with the bulk of selling interest taking a toll on the market's biggest winners of late. A market increasingly sensitive to weak economic data, as the focus shifts away from earnings, is finding excuses to take some money off the table following five consecutive week's of gains.
Given poor weather, rising gas prices, and an earlier Easter, April same-store sales were widely anticipated to be disappointing. However, more than 80% of the 60 largest retailers falling short of lowered expectations has exacerbated concerns about the outlook for consumer spending. According to the UBS-International Council of Shopping Centers, overall April comps fell 2.3%. That was the biggest drop since the index started tracking the data.
A day after the Fed reiterated its ongoing fixation on inflation, a larger than expected 1.3% rise in import prices last month stirring such concerns has given sellers an added reason to question current valuations. As a reminder, the Dow closed at another new all-time high yesterday while the S&P 500 finished within 1% of its March 2000 record.
The U.S. trade deficit widening by the biggest amount (10.4%) in more than four years to $63.9 bln (consensus $60.0 bln) in March, amid a 6.5% surge in oil prices, is also weighing on sentiment.
All 10 economic sectors are trading lower, with Energy (-1.5%) of all areas turning in the worst performance despite a 1.1% rebound in oil prices. Since bottoming in mid March, Energy has been the best performing S&P sector (+15.3%). The absence of more M&A speculation, today's scheduled Fed speak not offering any clarity about the interest-rate outlook, and a technical breakdown across the indices may also be contributing to the market's current sell-off. DJ30 -124.67 NASDAQ -34.29 SP500 -15.74 NASDAQ Dec/Adv/Vol 2109/778/866 mln NYSE Dec/Adv/Vol 2257/847/602 mln
11:30 am : Recent recovery efforts have been short lived as stocks roll over within the last 30 minutes. With the market's focus shifting away from corporate earnings to the uncertain economic outlook, today's scheduled Fed speak failing to give investors any clarity into the direction of interest rates may be contributing to the market's recent downturn. Neither Fed Governor Kroszner nor Chicago Fed President Moskow commented on interest rates or the economic outlook in their recent speeches at a payments conference. Both were among the ten Fed officials voting to keep rates unchanged again at yesterday's FOMC meeting.
A nearly 1.0% rebound in oil prices and the Energy sector's failure to take notice whatsoever by posting a 1.2% decline is acting as a double whammy for the bulls and possibly exacerbating the diminishing desire to own equities this morning after such a huge run-up over the last several weeks. DJ30 -86.63 NASDAQ -22.72 SP500 -11.22 NASDAQ Dec/Adv/Vol 2057/784/694 mln NYSE Dec/Adv/Vol 2123/930/474 mln
11:00 am : Stocks continue to trade at improved levels, spearheaded this time around from Technology, which has just clawed its way into positive territory. A rebound in Cisco Systems (CSCO 26.76 +0.25), following yesterday's 6.5% sell-off, is contributing to the influential sector's turnaround.
A 3.2% surge in Advanced Micro Devices (AMD 14.00 +0.43) is also noteworthy as is Motorola (MOT 18.17 +0.27) recouping some of Tuesday's 2.1% decline with a 1.5% advance.DJ30 -39.50 NASDAQ -7.78 SP500 -4.91 NASDAQ Dec/Adv/Vol 1865/915/534 mln NYSE Dec/Adv/Vol 2011/972/364 mln
10:30 am : The major averages are still on the defensive but off their recent lows as stocks get help from, of all areas, retail. The S&P Retail Index (+0.5%) has recently turned positive as investors dig a bit deeper into some of today's reports. Apparel Retail (+2.3%) is actually today's best performing S&P industry group. Limited Brands (LTD 28.58 +0.57) is up 2% after following up a 1.0% drop in April comps by forecasting a low single-digit rise in May sales. Even Gap Inc. (GPS 18.67 +0.24), which posted a huge 16% plunge in April same-store sales amid "significantly" weak margins, is catching a bid after reaffirming in-line earnings guidance for the quarter.
General Merchandise (+0.9%) ranks second among today's limited list of winners as Target's (TGT 59.67 0.51) 6.1% drop in April comps still edged passed expectations. Strangely, even Hyper & Supercenters (+0.9%) is among today's top ten despite Wal-Mart (WMT 47.81 -0.12) posting its worst monthly results since it began tracking such data 27 years ago. Rival Costco Wholesale (COST 55.80 +0.86) was among today's only surprises and is surging 1.6% after topping expectations with a 7% jump in April comps. DJ30 -44.62 NASDAQ -9.33 SP500 -5.22 NASDAQ Dec/Adv/Vol 1978/743/374 mln NYSE Dec/Adv/Vol 2123/791/238 mln
10:00 am : The indices are extending their reach to the downside as the bulk of industry leadership remains negative. Of the 10 sectors trading lower, Materials paces the way with a 1.0% decline. A 0.6% pullback in Financials, though, is acting as an even bigger overhang. Two of the sector's biggest winners yesterday, JP Morgan Chase (JPM 52.68 -0.52) and Merrill Lynch (MER 91.52 -1.00), are among today's more influential laggards.
Health Care and Industrials are posting similar 0.6% declines while not even the Consumer Staples' defensive characteristics are enough to attract buyers. The latter sector's biggest area of weakness is Food Retail, this morning's worst performing S&P industry group (-2.4%). Whole Foods Market (WFMI 40.41 -5.39) is plunging nearly 12% after missing analysts' estimates on the top and bottom-lines. DJ30 -67.93 NASDAQ -13.30 SP500 -7.37 NASDAQ Dec/Adv/Vol 1849/647/150 mln NYSE Dec/Adv/Vol 1706/514/64 mln
09:40 am : So much for yesterday's late-day momentum carrying over into this morning's opening bell as stocks erase all of Wednesday's modest gains right out of the gate. Even though April same-store sales were widely expected to be weak, given poor weather, rising gas prices, and an earlier Easter, shortfalls from more than 80% of the 60 largest retailers have exacerbated concerns about the outlook for consumer spending.
The U.S. trade deficit widening to a larger than expected $63.9 bln in March, after improving over the previous six months, and an unexpected 1.3% rise in import prices last month piquing inflation concerns have given sellers additional reason to question current valuations. DJ30 -58.10 NASDAQ -12.70 SP500 -6.28 NASDAQ Vol 86 mln NYSE Vol 44 mln
09:15 am : S&P futures vs fair value: -5.9. Nasdaq futures vs fair value: -8.0.
09:00 am : S&P futures vs fair value: -5.2. Nasdaq futures vs fair value: -6.8. The S&P 500 and Nasdaq 100 futures are off their recent lows but still trade well below fair value, still signaling a dismal start for the equity market. Aside from the disappointing monthly sales figures from a plethora of retailers, a number of earnings shortfalls (e.g. WFMI, SLE, and DISH), a Q2 warning from Hershey Foods (HSY), and a 1.0% rebound in oil prices are also giving investors little incentive to build on yesterday's broad-based gains.
08:33 am : S&P futures vs fair value: -6.3. Nasdaq futures vs fair value: -8.5. Futures trade has held relatively steady following mixed economic data, but still suggests stocks will open on a downbeat note. Initial claims unexpectedly fell 9K to 297K (consensus 315K), the lowest level since mid-January and reflective of healthy labor conditions. However, the Trade Deficit widened a larger than expected $63.9 bln (consensus $60.0 bln), the largest since last September, while import prices surging a larger than expected 1.3% in April stirs inflation concerns.
08:00 am : S&P futures vs fair value: -6.5. Nasdaq futures vs fair value: -8.0. Early indications are pointing to a sharply lower open for the cash market. The bulk of April same-store sales figures (e.g. ANF, ANN, ARO, DDS, FD, GPS, JCP, and WMT) checking in below expectations raises concerns about the health of the consumer and is giving investors an excuse to take some money off the table. Yesterday, the Dow closed at another new all-time high while the S&P 500 finished within 1% of its March 2000 record.
http://biz.yahoo.com/mu/update.html
4:20 pm : With a market increasingly sensitive to weak economic data, now that earnings season is all but over, investors found a slew of reasons Thursday to suggest stocks are overbought at current levels.
Yesterday, the S&P 500 finished within 1% of its March 2000 record and the Dow closed at an all-time high for the 21st time this year. Today, the S&P 500 shaved 1.4% off its 6.6% year-to-date advance. The Dow posted its first triple-digit decline since the day this seven-week rally got underway (March 13). All three major averages closed near session lows, suggesting that there is potential for some carry-over weakness tomorrow morning.
Setting the bearish tone for trading today was a plethora of disappointing same-store sales figures. April comps were widely anticipated to be weak, given poor weather, rising gas prices, and an earlier Easter; but no one anticipated it would be the worst April on record. According to the UBS-International Council of Shopping Centers, overall April sales fell 2.3%, the biggest drop since the industry tracker began tracking the data.
Just a day removed from the Fed reiterating its continued concerns about inflation risks, a larger than expected 1.3% rise in import prices last month gave sellers another excuse to question current valuations.
Throw in a wider than expected trade deficit, and a lack of the very deal-making news that has provided a substantial floor of support for stocks of late, and today's pullback wasn't much of a surprise. From our vantage point, we have let readers know that we felt the market had gotten ahead of itself given deteriorating fundamentals.
All 10 economic sectors not only closed lower, but all of them were down at least 1.0% each. Energy (-2.0%) turned in the day's worst performance despite a modest rebound in crude oil prices. It is worth noting, though, that Energy has also been the best performing S&P sector (+15.3%) since stocks bottomed in mid March.
Health Care (-1.9%) was a close second as two of the sector's most heavily-weighted drug names tumbled following an unfavorable FDA ruling. The absence of leadership from Financials was another thorn in the bulls' side Thursday; 85 of its 90 components lost ground. BTK -2.1% DJ30 -147.74 DJTA -1.8% DJUA -1.4% DOT -1.3% NASDAQ -42.60 NQ100 -1.6% R2K -1.9% SOX -2.1% SP400 -1.4% SP500 -21.11 XOI -1.9% NASDAQ Dec/Adv/Vol 2395/671/2.26 bln NYSE Dec/Adv/Vol 2558/733/1.52 bln
3:30 pm : Equities are still sporting hefty losses as buyers remain sidelined going into the close. Consumer Discretionary has recently become the sixth sector to turn in a decline of at least 1.0% on the day as everything from Advertising and Autos to Hotels and Homebuilders succumb to profit taking.
Health Care (-1.4%) has also taken a turn for the worse since the last update. An FDA panel recently voting 15-2 in favor of more restrictions on anemia drug labels has pushed Dow component Johnson & Johnson (63.25 -0.86) and Amgen (AMGN 59.02 -4.08) to session lows. Both stocks are among the Health Care's most influential names, combining to account for nearly 16% of the total weighting in the sector. DJ30 -125.64 NASDAQ -36.45 SP500 -17.65 NASDAQ Dec/Adv/Vol 2354/685/1.82 bln NYSE Dec/Adv/Vol 2488/772/1.27 bln
3:00 pm : Not much has changed over the last hour of trading as the indices have settled into relatively narrow trading ranges. All 10 sectors are still trading lower, five of which are down more than 1.0%. Energy (-1.6%) still paces the way even though oil eked out a modest gain on the day. Coal & Consumable Fuel (-2.4%) is among today's biggest laggards; but it also ranks among this year's top ten performers (+27.4%).
The Materials sector is nipping at Energy's heels with a 1.4% intraday decline. Diversified Metals & Mining also ranks among the worst of the more than 140 S&P industry groups losing ground; but it too has significantly outperformed virtually everything else this year with a 29% return. That includes today's 2.4% pullback.DJ30 -110.70 NASDAQ -30.02 SP500 -15.00 NASDAQ Dec/Adv/Vol 2276/720/1.67 bln NYSE Dec/Adv/Vol 2421/814/1.17 bln
2:30 pm : More of the same for stocks as market internals remain decidedly negative. As reflected in the A/D line, decliners on the NYSE and Nasdaq hold a more than 3-to-1 edge over advancers.
The outsized ratio of down to up volume further dictates the reluctance on the part of buyers as it was only a matter of time for five straight weeks of gains to look overextended. Today's losses now leave the Dow, S&P 500 and Nasdaq trading lower for the week and in jeopardy of having their latest streak snapped. DJ30 -108.65 NASDAQ -28.70 SP500 -14.29 NASDAQ Dec/Adv/Vol 2280/702/1.56 bln NYSE Dec/Adv/Vol 2443/776/1.08 bln
2:00 pm : Buyers are again trying to gain some traction as oil prices slip into the red. Unfortunately for the bulls looking anywhere and everywhere for any positive catalysts to keep a good thing going, oil's reversal has been short lived. Crude for June delivery is back up 0.5% near $61.90/bbl and selling remains widespread across most areas.
Of the 147 S&P industry groups, 142 are now posting losses. Among the only areas attracting buyers are IT Consulting Services (+1.1%), Apparel Retail (+0.8%), and Human Resources (+0.7%). Health Care Facilities and Leisure Products are also in positive territory; but their gains are so miniscule that they barely qualify as such. DJ30 -118.79 NASDAQ -30.62 SP500 -15.46 NASDAQ Dec/Adv/Vol 2359/634/1.45 bln NYSE Dec/Adv/Vol 2503/705/996 mln
1:30 pm : Equities are hitting fresh session lows as the temptation to keep consolidating some of the market's recent advance gets a second wind. Not surprising, most of today's weakness remains concentrated in the areas that have posted the largest gains of late. Energy has been the biggest winner since mid March, up more than 15%.
Materials is posting a similarly disappointing 2.0% decline but ranks as this year's second best performing sector (+14.4%). Industrials (-1.1%) ranks third among today's laggards but with oil prices back above $62/bbl (+1.0%) within the last 20 minutes, transportation stocks have become less attractive. Health Care is also down more than 1.0% but such a pullback barely puts a dent in the 11.1% surge enjoyed since March 13. DJ30 -151.98 DJTA -2.0% NASDAQ -40.16 SP500 -18.93 NASDAQ Dec/Adv/Vol 2323/649/1.32 bln NYSE Dec/Adv/Vol 2482/722/898 mln
1:00 pm : The indices continue to chip away at their intraday losses, but sellers are still in complete control of today's trading. Crude oil pulling back to session lows and now up only 0.3% at $61.73/bbl offers some relief since higher gasoline prices were attributed to such disappointing April retail sales figures.
However, the broad-based nature of today's sell-off on heavier than normal volume implies the bulls will likely lose this round, especially with the Energy sector (-1.7%) slipping even further into the red amid oil's dpwnturn. DJ30 -105.00 NASDAQ -28.25 SP500 -13.05 XOI -1.9% NASDAQ Dec/Adv/Vol 2266/658/1.19 bln NYSE Dec/Adv/Vol 2432/726/806 mln
12:30 pm : The indices are off their worst levels of the session but haven't improved nearly enough to make a significant change in the standings. Sellinf remains the name of the game as 140 out of 147 S&P industry groups are trading lower. Advertising (-3.1%) still leads the way after Interpublic Group (IPG 11.86 -1.08) posted a larger than expected loss in the first quarter.
Adding to the market's recent struggles have been the Dow, S&P 500 and Nasdaq's inability to find support above key technical levels of 13250, 1500 and 2547, respectively. DJ30 -119.14 NASDAQ -30.73 SP500 -14.11 NASDAQ Dec/Adv/Vol 2290/622/1.08 bln NYSE Dec/Adv/Vol 2419/710/726 mln
12:00 pm : Stocks are tumbling across the board midday, with the bulk of selling interest taking a toll on the market's biggest winners of late. A market increasingly sensitive to weak economic data, as the focus shifts away from earnings, is finding excuses to take some money off the table following five consecutive week's of gains.
Given poor weather, rising gas prices, and an earlier Easter, April same-store sales were widely anticipated to be disappointing. However, more than 80% of the 60 largest retailers falling short of lowered expectations has exacerbated concerns about the outlook for consumer spending. According to the UBS-International Council of Shopping Centers, overall April comps fell 2.3%. That was the biggest drop since the index started tracking the data.
A day after the Fed reiterated its ongoing fixation on inflation, a larger than expected 1.3% rise in import prices last month stirring such concerns has given sellers an added reason to question current valuations. As a reminder, the Dow closed at another new all-time high yesterday while the S&P 500 finished within 1% of its March 2000 record.
The U.S. trade deficit widening by the biggest amount (10.4%) in more than four years to $63.9 bln (consensus $60.0 bln) in March, amid a 6.5% surge in oil prices, is also weighing on sentiment.
All 10 economic sectors are trading lower, with Energy (-1.5%) of all areas turning in the worst performance despite a 1.1% rebound in oil prices. Since bottoming in mid March, Energy has been the best performing S&P sector (+15.3%). The absence of more M&A speculation, today's scheduled Fed speak not offering any clarity about the interest-rate outlook, and a technical breakdown across the indices may also be contributing to the market's current sell-off. DJ30 -124.67 NASDAQ -34.29 SP500 -15.74 NASDAQ Dec/Adv/Vol 2109/778/866 mln NYSE Dec/Adv/Vol 2257/847/602 mln
11:30 am : Recent recovery efforts have been short lived as stocks roll over within the last 30 minutes. With the market's focus shifting away from corporate earnings to the uncertain economic outlook, today's scheduled Fed speak failing to give investors any clarity into the direction of interest rates may be contributing to the market's recent downturn. Neither Fed Governor Kroszner nor Chicago Fed President Moskow commented on interest rates or the economic outlook in their recent speeches at a payments conference. Both were among the ten Fed officials voting to keep rates unchanged again at yesterday's FOMC meeting.
A nearly 1.0% rebound in oil prices and the Energy sector's failure to take notice whatsoever by posting a 1.2% decline is acting as a double whammy for the bulls and possibly exacerbating the diminishing desire to own equities this morning after such a huge run-up over the last several weeks. DJ30 -86.63 NASDAQ -22.72 SP500 -11.22 NASDAQ Dec/Adv/Vol 2057/784/694 mln NYSE Dec/Adv/Vol 2123/930/474 mln
11:00 am : Stocks continue to trade at improved levels, spearheaded this time around from Technology, which has just clawed its way into positive territory. A rebound in Cisco Systems (CSCO 26.76 +0.25), following yesterday's 6.5% sell-off, is contributing to the influential sector's turnaround.
A 3.2% surge in Advanced Micro Devices (AMD 14.00 +0.43) is also noteworthy as is Motorola (MOT 18.17 +0.27) recouping some of Tuesday's 2.1% decline with a 1.5% advance.DJ30 -39.50 NASDAQ -7.78 SP500 -4.91 NASDAQ Dec/Adv/Vol 1865/915/534 mln NYSE Dec/Adv/Vol 2011/972/364 mln
10:30 am : The major averages are still on the defensive but off their recent lows as stocks get help from, of all areas, retail. The S&P Retail Index (+0.5%) has recently turned positive as investors dig a bit deeper into some of today's reports. Apparel Retail (+2.3%) is actually today's best performing S&P industry group. Limited Brands (LTD 28.58 +0.57) is up 2% after following up a 1.0% drop in April comps by forecasting a low single-digit rise in May sales. Even Gap Inc. (GPS 18.67 +0.24), which posted a huge 16% plunge in April same-store sales amid "significantly" weak margins, is catching a bid after reaffirming in-line earnings guidance for the quarter.
General Merchandise (+0.9%) ranks second among today's limited list of winners as Target's (TGT 59.67 0.51) 6.1% drop in April comps still edged passed expectations. Strangely, even Hyper & Supercenters (+0.9%) is among today's top ten despite Wal-Mart (WMT 47.81 -0.12) posting its worst monthly results since it began tracking such data 27 years ago. Rival Costco Wholesale (COST 55.80 +0.86) was among today's only surprises and is surging 1.6% after topping expectations with a 7% jump in April comps. DJ30 -44.62 NASDAQ -9.33 SP500 -5.22 NASDAQ Dec/Adv/Vol 1978/743/374 mln NYSE Dec/Adv/Vol 2123/791/238 mln
10:00 am : The indices are extending their reach to the downside as the bulk of industry leadership remains negative. Of the 10 sectors trading lower, Materials paces the way with a 1.0% decline. A 0.6% pullback in Financials, though, is acting as an even bigger overhang. Two of the sector's biggest winners yesterday, JP Morgan Chase (JPM 52.68 -0.52) and Merrill Lynch (MER 91.52 -1.00), are among today's more influential laggards.
Health Care and Industrials are posting similar 0.6% declines while not even the Consumer Staples' defensive characteristics are enough to attract buyers. The latter sector's biggest area of weakness is Food Retail, this morning's worst performing S&P industry group (-2.4%). Whole Foods Market (WFMI 40.41 -5.39) is plunging nearly 12% after missing analysts' estimates on the top and bottom-lines. DJ30 -67.93 NASDAQ -13.30 SP500 -7.37 NASDAQ Dec/Adv/Vol 1849/647/150 mln NYSE Dec/Adv/Vol 1706/514/64 mln
09:40 am : So much for yesterday's late-day momentum carrying over into this morning's opening bell as stocks erase all of Wednesday's modest gains right out of the gate. Even though April same-store sales were widely expected to be weak, given poor weather, rising gas prices, and an earlier Easter, shortfalls from more than 80% of the 60 largest retailers have exacerbated concerns about the outlook for consumer spending.
The U.S. trade deficit widening to a larger than expected $63.9 bln in March, after improving over the previous six months, and an unexpected 1.3% rise in import prices last month piquing inflation concerns have given sellers additional reason to question current valuations. DJ30 -58.10 NASDAQ -12.70 SP500 -6.28 NASDAQ Vol 86 mln NYSE Vol 44 mln
09:15 am : S&P futures vs fair value: -5.9. Nasdaq futures vs fair value: -8.0.
09:00 am : S&P futures vs fair value: -5.2. Nasdaq futures vs fair value: -6.8. The S&P 500 and Nasdaq 100 futures are off their recent lows but still trade well below fair value, still signaling a dismal start for the equity market. Aside from the disappointing monthly sales figures from a plethora of retailers, a number of earnings shortfalls (e.g. WFMI, SLE, and DISH), a Q2 warning from Hershey Foods (HSY), and a 1.0% rebound in oil prices are also giving investors little incentive to build on yesterday's broad-based gains.
08:33 am : S&P futures vs fair value: -6.3. Nasdaq futures vs fair value: -8.5. Futures trade has held relatively steady following mixed economic data, but still suggests stocks will open on a downbeat note. Initial claims unexpectedly fell 9K to 297K (consensus 315K), the lowest level since mid-January and reflective of healthy labor conditions. However, the Trade Deficit widened a larger than expected $63.9 bln (consensus $60.0 bln), the largest since last September, while import prices surging a larger than expected 1.3% in April stirs inflation concerns.
08:00 am : S&P futures vs fair value: -6.5. Nasdaq futures vs fair value: -8.0. Early indications are pointing to a sharply lower open for the cash market. The bulk of April same-store sales figures (e.g. ANF, ANN, ARO, DDS, FD, GPS, JCP, and WMT) checking in below expectations raises concerns about the health of the consumer and is giving investors an excuse to take some money off the table. Yesterday, the Dow closed at another new all-time high while the S&P 500 finished within 1% of its March 2000 record.
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