AI
Wednesday, May 16, 2007 7:11:49 PM
Market Update 070516
http://biz.yahoo.com/mu/update.html
4:20 pm : With the trend as their friend and bears still coming up short trying to fight the tape, the bulls continued to ride a wave of upward momentum that began in mid March. All three major averages closed at session highs, fueled by gains in all 10 economic sectors.
A buying spree among billionaires was the biggest reason behind the Dow logging its 23rd record finish this year.
Citigroup (C 54.74 +1.95) was the index's best performer, surging 3.7% after hedge fund manager Eddie Lampert disclosed an $800 mln stake. As the fourth most influential constituent on the S&P 500, Citigroup's surge also had a noticeable impact on the broader market and helped restore some much needed leadership in the underperforming Financials sector. Briefing.com lowered its rating on Financials to Underweight last month.
Johnson & Johnson (JNJ 63.05 +1.23) was another Dow winner following reports that Warren Buffet's Berkshire Hathaway nearly doubled its stake in J&J. The Health Care sector, which Briefing.com rates as Overweight, got an additional boost after Buffett also revealed a roughly $80 mln stake in WellPoint (WLP 84.85 +1.30).
Health Care Suppliers (+9.7%) was today's best performing S&P industry group after Bausch & Lomb (BOL 67.46 +5.96) agreed to be taken private by Warburg Pincus for $4.5 bln.
Microsoft (MSFT 31.04 +0.14) was the third Dow component to make headlines due to an increased ownership stake from a high-profile investor. George Soros' Fund Management LLC said it more than doubled its investment in the tech bellwether. However, since shares have soared 14% from their mid-March low, more attention was paid to underperforming names like Citigroup and J&J.
In fact, such strong gains from so many other blue-chip names this year ushered in two separate attempts to lock in gains intraday; but the bears' overbought argument fell on deaf ears and was no match for the underlying bullish momentum that has lifted stocks virtually uncontested for several weeks now.
Separately, investors did sift through some economic data today. Housing starts unexpectedly rose 2.5% in April to 1.528 mln, but building permits, a sign of future construction, plunged 8.9% to a 10-year low. Nonetheless, more proof that housing remains mired in a deep slump wasn't exactly a big surprise. BTK +0.17% DJ30 +103.69 DJTA +1.74% DJUA +0.69% DOT +1.2% NASDAQ +22.13 NQ100 +1.06% R2K +0.49% SOX -0.08% SP400 +0.61% SP500 +12.95 XOI +0.36% NASDAQ Dec/Adv/Vol 1344/1684/1.93 bln NYSE Dec/Adv/Vol 1302/1978/1.32 bln
3:30 pm : Buying remains the name of the game going into the close, positioning the indices to close near session highs. The Dow is on pace to finish at a new all-time high again and, with constant headlines of the blue-chip index hitting new records, is likely to keep sentiment leaning in favor of the bulls.
The S&P 500, which has been down the past two days, is turning in an even better performance and is now 16 points away from its record close in March of 2000. DJ30 +78.91 NASDAQ +14.65 SP500 +9.88 NASDAQ Dec/Adv/Vol 1449/1575/1.72 bln NYSE Dec/Adv/Vol 1406/1849/1.16 bln
3:00 pm : More of the same for stocks as buying remains widespread across most areas. With Materials recently turning the corner, all 10 economic sectors are now in positive territory. Gains of more than 0.8% from Financials, Health Care, Consumer Staples, and Telecom are providing the bulk of today's leadership.
While the rotation out of small and mid-cap stocks into large-cap stocks holds true again today, it is worth noting that the Russell 2000 and S&P 400 MidCap indexes are also holding onto modest gains after languishing for much of the day. DJ30 +65.28 NASDAQ +12.81 R2K +0.3% SP400 +0.3% SP500 +9.21 NASDAQ Dec/Adv/Vol 1378/1614/1.55 bln NYSE Dec/Adv/Vol 1357/1884/1.04 bln
2:30 pm : Onward and upward is the driving mantra, for now, as the bulls continue to argue that stocks have more room to run. A 1.2% swing in the Energy sector from its bottom about two hours ago, sparked by a subsequent rebound in oil prices, has lent some much needed leadership.
Exacerbating the move higher has been the ability by the Dow, S&P 500 and Nasdaq to break through key resistance levels 13439, 1510, and 2533, respectively. Dallas Fed President Fisher recently citing some encouraging signs on inflation also appears to be a catalyst behind an improved underlying tone.DJ30 +64.60 NASDAQ +13.18 SP500 +9.26 NASDAQ Dec/Adv/Vol 1350/1645/1.45 bln NYSE Dec/Adv/Vol 1367/1865/954 mln
2:00 pm : The indices are extending their reach to the upside as a renewed wave of buying interest sends sellers running for cover. AT&T (T 41.00 +0.61) surging 1.5% to new all-time high is contributing to the noticeable move higher on the Dow and the S&P 500. With regard to the latter, AT&T ranks as the fifth most heavily-weighted name and its intraday advance now earmarks Telecom as today's best performing sector (+1.0%).
The Nasdaq, whose 4.9% year-to-date advance still lags respective 2007 gains of 7.7% and 6.2% on the Dow and S&P 500, is underperforming its blue-chip counterparts today as well. DJ30 +52.69 NASDAQ +7.91 SP500 +7.16 NASDAQ Dec/Adv/Vol 1502/1476/1.31 bln NYSE Dec/Adv/Vol 1543/1658/860 mln
1:30 pm : The market is trying to regain some traction after another consolidation attempt came up short. Eight out of 10 sectors now posting gains speaks to the broad-based nature of the latest rebound from recent lows. Below average volume and the A/D line, however, paint a less convincing picture. Advancers and decliners remain evenly matched on the NYSE, which is still more than 200 mln shares from surpassing 1.0 bln.
Even more disconcerting is the Nasdaq, where declining issues outpace advancing issues by a 16-to-13 margin. The tech-heavy index is getting the bulk of its support from a handful of influential names (e.g. CMCSA +1.5%, DELL +3.4%, QCOM +1.3%, DISH +2.0%, ADBE +1.6%, and GILD +1.7%). DJ30 +33.61 NASDAQ +4.46 SP500 +5.18 NASDAQ Dec/Adv/Vol 1622/1329/1.21 bln NYSE Dec/Adv/Vol 1586/1596/792 mln
1:00 pm : Stocks continue to back off their recent highs and, strangely, the market is exhibiting almost the exact same pattern as this morning's downturn. Declines in Energy (-0.9%) and Materials (-0.6%) have again been joined by reversals in Industrials, then Technology, and then Discretionary.
The only difference this time around is that Health Care (+0.7%) is now outpacing Financials (+0.6%) to the upside, which explains why the Dow is hanging onto a small gain and why the Nasdaq is struggling to stay positive. DJ30 +17.58 NASDAQ +0.05 SP500 +3.17 NASDAQ Dec/Adv/Vol 1610/1302/1.08 bln NYSE Dec/Adv/Vol 1594/1587/700 mln
12:30 pm : Choppy trading persists as the afternoon session gets underway. As was the case this morning, when oil prices slipped to session lows, investors appear to be viewing oil's downturn as more validation about slowing economic growth and a potential earnings squeeze in energy names. The Energy sector is now down 0.8%. Crude for June delivery is now down 2.0% and back below $62/bbl which is certainly a good thing for consumers and corporate profit growth for nearly every company outside of the oil complex.
As a reminder, higher energy prices have driven investors like Warren Buffett to build large stakes in Railroads (+1.0%) as more affordable alternatives to trucking. Buffett's Berkshire Hathaway yesterday disclosed sizable positions in Norfolk Southern (NSC 56.36 +0.49) and Union Pacific (UNP 118.83 +0.54). Billionaire investor Carl Icahn disclosed yesterday that he bought 2.6 mln shares of CSX Corp. (CSX 46.08 +0.34).DJ30 +20.68 NASDAQ +1.65 SP500 +3.11 NASDAQ Dec/Adv/Vol 1598/1294/1.01 bln NYSE Dec/Adv/Vol 1509/1620/650 mln
12:00 pm : The indices are bouncing off their recent lows and retracing morning highs as investors juggle a buying spree among billionaires with mixed housing data and valuation concerns.
Stocks rose right out of the gate, lifting the Dow to yet another new all-time high. The price-weighted index's gain was buoyed by SEC filings that showed notable investments in three of its components. Citigroup (C 54.47 +1.68) is the index's best performer this morning, surging 3.2% after hedge fund manager Eddie Lampert disclosed an $800 mln stake. Johnson & Johnson (JNJ 62.78 0.96) is turning in the next best performance (+1.6%) amid confirmation that Warren Buffet's Berkshire Hathaway nearly doubled its stake.
Microsoft (MSFT 30.89 -0.01) is also in focus after George Soros more than doubled his investment in the tech bellwether; but shares are roughly flat after climbing 14% from their mid-March low. In fact, such strong gains from so many other blue-chip names ushered in a wave of consolidation about an hour ago; but it was no match for the underlying bullish momentum that has lifted stocks virtually uncontested for about eight weeks. As of yesterday's close, though, Citigroup and J&J were down 3.3% and 5.8% year to date, further playing into the bulls' argument that valuations remain reasonable and indicative of why both stocks are outperforming today.
Separately, housing starts unexpectedly rose 2.5% in April to 1.528 mln, reflecting some semblance of stabilization. However, building permits, which are a sign of future construction, plunged 8.9% to a 10-year low of 1.429 mln, providing more proof that housing remains mired in a deep slump.
Nonetheless, leadership from just a handful of influential large-caps, as has been the case for several weeks, continues to silence the argument that stocks are clearly running ahead of deteriorating fundamentals. DJ30 +43.39 NASDAQ +4.12 SP500 +5.80 NASDAQ Dec/Adv/Vol 1549/1305/874 mln NYSE Dec/Adv/Vol 1451/1642/562 mln
11:30 am : The major averages now trade in split fashion as sentiment continues to deteriorate. Technology and Consumer Discretionary, which combined account for more than 25% of the total weighting on the S&P 500, have become the latest sectors to turn negative.
With the Dow up 8.3% since the end of March, it's not surprising to see it look ripe for a pullback. The market's recent failure to embrace lower oil prices further underscores the growing sense that stocks are beginning to look overbought after running virtually unabated since the start of April. DJ30 -3.50 NASDAQ -2.07 SP500 +2.19 NASDAQ Dec/Adv/Vol 1706/1104/702 mln NYSE Dec/Adv/Vol 1560/1510/446 mln
11:00 am : The market is well off its best levels, as evidenced by the Dow briefly turning negative, as split industry now dictates today's trading. The Energy sector recently turning negative has removed some notable leadership. Albeit off its worst levels (-1.6% at $62.16/bbl), crude for June delivery is down 1.0% near $62.60/bbl following the largest build in weekly gasoline supplies since early February.
Also noteworthy has been a reversal in Industrials. Deere & Co. (DE 118.10 -2.55) has been the sector's biggest disappointment, exhibiting a 4.4% swing since the open. The stock was up 2.3% at an all-time high after handily beating expectations; but shares are now down 2.1% following cautious remarks in its conference call. DJ30 +3.24 NASDAQ +1.49 SP500 +3.53 NASDAQ Dec/Adv/Vol 1374/1379/534 mln NYSE Dec/Adv/Vol 1350/1655/340 mln
10:30 am : The indices continue to sport gains across the board as buyers remain in control of today's action. Aside from Financials (+0.8%), Health Care (+0.7%) is also acting as an influential source of market support.
Health Care Suppliers (+8.1) ranks as today's best performing S&P industry group after Bausch & Lomb (BOL 66.49 +4.99) agreed to be taken private by Warburg Pincus for $4.5 bln. HMOs (+1.4%) are another sector bright spot following reports that Buffett's Berkshire Hathaway also revealed a roughly $80 mln stake in WellPoint (WLP 85.10 +1.55). DJ30 +46.28 NASDAQ +9.80 SP500 +6.41 NASDAQ Dec/Adv/Vol 1180/1477/374 mln NYSE Dec/Adv/Vol 1147/1773/210 mln
10:00 am : Equities are still on the offensive as nine of 10 economic sectors remain positive. When the most heavily-weighted sector on the S&P 500, Financials (+0.8%), is turning in the day's best performance, it's not surprising to see the market as a whole trading higher.
Even though hedge fund manager Eddie Lampert's disclosed $800 mln stake in Citigroup (C 54.51 +1.72) amounts to only 0.3% of the Citi's outstanding shares, a subsequent 3.3% surge in the Dow component and fourth most influential constituent on the S&P 500 is having a noticeable impact on the broader market. Other Diversified Financial Services (+1.9%) ranks as today's second best performing S&P industry group. DJ30 +46.86 NASDAQ +10.23 SP500 +6.03 NASDAQ Dec/Adv/Vol 880/1586/170 mln NYSE Dec/Adv/Vol 738/1742/66 mln
09:40 am : As expected, stocks bounce back from yesterday's dismal finish as the disclosure of significant investments in some large-cap names from some high-profile investors overshadows mixed housing data. Most notably, blue chips Johnson & Johnson (JNJ 62.50 +0.68), Microsoft (MSFT 31.05 +0.15), and Citigroup (C 54.33 +1.54) are helping to lift the Dow into record territory following large reported stakes from billionaires Warren Buffett, George Soros, and Eddie Lampert, respectively.
Separately, housing starts unexpectedly rose 2.5% in April to 1.528 mln, reflecting some semblance of stabilization. However, building permits, which are a sign of future construction, plunged 8.9% to a 10-year low of 1.429 mln, providing more evidence that the housing sector remains mired in a deep slump.DJ30 +46.08 NASDAQ +10.78 SP500 +7.00 NASDAQ Vol 88 mln NYSE Vol 42 mln
09:15 am : S&P futures vs fair value: +5.2. Nasdaq futures vs fair value: +7.3. Stocks still look to open on an upbeat note as investors sift through the day's last scheduled economic report. April Industrial Production rose 0.7% (consensus 0.3%) while Capacity Utilization, a key inflation gauge, rose to 81.6% (consensus 81.5%) from a revised 81.2%.
09:00 am : S&P futures vs fair value: +3.6. Nasdaq futures vs fair value: +6.0. The stage remains set for stocks to open on an upbeat note. Berkshire Hathaway nearly doubling its stake in Johnson & Johnson (JNJ), Lampert disclosing an $800 mln stake in fellow Dow component Citigroup (C), and Soros more than doubling his investment in another Dow name, Microsoft (MSFT), continue to provide a floor of early support.
All three stocks are also among the most heavily-weighted names on the S&P 500. Fortunately for the bulls, Microsoft's gain is helping to offset another sell-off in Applied Materials (AMAT), which beat analysts' expectations but forecasted flat sales for Q3 and up to a 15% drop in orders.
08:33 am : S&P futures vs fair value: +3.5. Nasdaq futures vs fair value: +5.8. Early indications still suggest stocks will rebound from yesterday's disappointing finish; but futures are off their recent highs following mixed housing data. Housing starts unexpectedly rose 2.5% in April to 1.528 mln (consensus 1.48 mln). That's the highest level this year and is reflective of more stabilization in housing. However, Building Permits, a sign of future construction, fell 8.9% to a 10-year low of 1.429 mln (consensus 1.52 mln). Bonds have held relatively steady in response; the 10-year note is still up 4 ticks to yield 4.68%.
08:00 am : S&P futures vs fair value: +4.3. Nasdaq futures vs fair value: +6.8. After relinquishing what was initially shaping up to be a decent day of gains, S&P 500 and Nasdaq 100 futures are trading above fair value and signaling a modest rebound. The disclosure of significant investments in several large-cap names (e.g. C, JNJ, MSFT, NSC, UNP, and WLP) from billionaire investors like Warren Buffett, George Soros, and Eddie Lampert is contributing to the improved sentiment.
http://biz.yahoo.com/mu/update.html
4:20 pm : With the trend as their friend and bears still coming up short trying to fight the tape, the bulls continued to ride a wave of upward momentum that began in mid March. All three major averages closed at session highs, fueled by gains in all 10 economic sectors.
A buying spree among billionaires was the biggest reason behind the Dow logging its 23rd record finish this year.
Citigroup (C 54.74 +1.95) was the index's best performer, surging 3.7% after hedge fund manager Eddie Lampert disclosed an $800 mln stake. As the fourth most influential constituent on the S&P 500, Citigroup's surge also had a noticeable impact on the broader market and helped restore some much needed leadership in the underperforming Financials sector. Briefing.com lowered its rating on Financials to Underweight last month.
Johnson & Johnson (JNJ 63.05 +1.23) was another Dow winner following reports that Warren Buffet's Berkshire Hathaway nearly doubled its stake in J&J. The Health Care sector, which Briefing.com rates as Overweight, got an additional boost after Buffett also revealed a roughly $80 mln stake in WellPoint (WLP 84.85 +1.30).
Health Care Suppliers (+9.7%) was today's best performing S&P industry group after Bausch & Lomb (BOL 67.46 +5.96) agreed to be taken private by Warburg Pincus for $4.5 bln.
Microsoft (MSFT 31.04 +0.14) was the third Dow component to make headlines due to an increased ownership stake from a high-profile investor. George Soros' Fund Management LLC said it more than doubled its investment in the tech bellwether. However, since shares have soared 14% from their mid-March low, more attention was paid to underperforming names like Citigroup and J&J.
In fact, such strong gains from so many other blue-chip names this year ushered in two separate attempts to lock in gains intraday; but the bears' overbought argument fell on deaf ears and was no match for the underlying bullish momentum that has lifted stocks virtually uncontested for several weeks now.
Separately, investors did sift through some economic data today. Housing starts unexpectedly rose 2.5% in April to 1.528 mln, but building permits, a sign of future construction, plunged 8.9% to a 10-year low. Nonetheless, more proof that housing remains mired in a deep slump wasn't exactly a big surprise. BTK +0.17% DJ30 +103.69 DJTA +1.74% DJUA +0.69% DOT +1.2% NASDAQ +22.13 NQ100 +1.06% R2K +0.49% SOX -0.08% SP400 +0.61% SP500 +12.95 XOI +0.36% NASDAQ Dec/Adv/Vol 1344/1684/1.93 bln NYSE Dec/Adv/Vol 1302/1978/1.32 bln
3:30 pm : Buying remains the name of the game going into the close, positioning the indices to close near session highs. The Dow is on pace to finish at a new all-time high again and, with constant headlines of the blue-chip index hitting new records, is likely to keep sentiment leaning in favor of the bulls.
The S&P 500, which has been down the past two days, is turning in an even better performance and is now 16 points away from its record close in March of 2000. DJ30 +78.91 NASDAQ +14.65 SP500 +9.88 NASDAQ Dec/Adv/Vol 1449/1575/1.72 bln NYSE Dec/Adv/Vol 1406/1849/1.16 bln
3:00 pm : More of the same for stocks as buying remains widespread across most areas. With Materials recently turning the corner, all 10 economic sectors are now in positive territory. Gains of more than 0.8% from Financials, Health Care, Consumer Staples, and Telecom are providing the bulk of today's leadership.
While the rotation out of small and mid-cap stocks into large-cap stocks holds true again today, it is worth noting that the Russell 2000 and S&P 400 MidCap indexes are also holding onto modest gains after languishing for much of the day. DJ30 +65.28 NASDAQ +12.81 R2K +0.3% SP400 +0.3% SP500 +9.21 NASDAQ Dec/Adv/Vol 1378/1614/1.55 bln NYSE Dec/Adv/Vol 1357/1884/1.04 bln
2:30 pm : Onward and upward is the driving mantra, for now, as the bulls continue to argue that stocks have more room to run. A 1.2% swing in the Energy sector from its bottom about two hours ago, sparked by a subsequent rebound in oil prices, has lent some much needed leadership.
Exacerbating the move higher has been the ability by the Dow, S&P 500 and Nasdaq to break through key resistance levels 13439, 1510, and 2533, respectively. Dallas Fed President Fisher recently citing some encouraging signs on inflation also appears to be a catalyst behind an improved underlying tone.DJ30 +64.60 NASDAQ +13.18 SP500 +9.26 NASDAQ Dec/Adv/Vol 1350/1645/1.45 bln NYSE Dec/Adv/Vol 1367/1865/954 mln
2:00 pm : The indices are extending their reach to the upside as a renewed wave of buying interest sends sellers running for cover. AT&T (T 41.00 +0.61) surging 1.5% to new all-time high is contributing to the noticeable move higher on the Dow and the S&P 500. With regard to the latter, AT&T ranks as the fifth most heavily-weighted name and its intraday advance now earmarks Telecom as today's best performing sector (+1.0%).
The Nasdaq, whose 4.9% year-to-date advance still lags respective 2007 gains of 7.7% and 6.2% on the Dow and S&P 500, is underperforming its blue-chip counterparts today as well. DJ30 +52.69 NASDAQ +7.91 SP500 +7.16 NASDAQ Dec/Adv/Vol 1502/1476/1.31 bln NYSE Dec/Adv/Vol 1543/1658/860 mln
1:30 pm : The market is trying to regain some traction after another consolidation attempt came up short. Eight out of 10 sectors now posting gains speaks to the broad-based nature of the latest rebound from recent lows. Below average volume and the A/D line, however, paint a less convincing picture. Advancers and decliners remain evenly matched on the NYSE, which is still more than 200 mln shares from surpassing 1.0 bln.
Even more disconcerting is the Nasdaq, where declining issues outpace advancing issues by a 16-to-13 margin. The tech-heavy index is getting the bulk of its support from a handful of influential names (e.g. CMCSA +1.5%, DELL +3.4%, QCOM +1.3%, DISH +2.0%, ADBE +1.6%, and GILD +1.7%). DJ30 +33.61 NASDAQ +4.46 SP500 +5.18 NASDAQ Dec/Adv/Vol 1622/1329/1.21 bln NYSE Dec/Adv/Vol 1586/1596/792 mln
1:00 pm : Stocks continue to back off their recent highs and, strangely, the market is exhibiting almost the exact same pattern as this morning's downturn. Declines in Energy (-0.9%) and Materials (-0.6%) have again been joined by reversals in Industrials, then Technology, and then Discretionary.
The only difference this time around is that Health Care (+0.7%) is now outpacing Financials (+0.6%) to the upside, which explains why the Dow is hanging onto a small gain and why the Nasdaq is struggling to stay positive. DJ30 +17.58 NASDAQ +0.05 SP500 +3.17 NASDAQ Dec/Adv/Vol 1610/1302/1.08 bln NYSE Dec/Adv/Vol 1594/1587/700 mln
12:30 pm : Choppy trading persists as the afternoon session gets underway. As was the case this morning, when oil prices slipped to session lows, investors appear to be viewing oil's downturn as more validation about slowing economic growth and a potential earnings squeeze in energy names. The Energy sector is now down 0.8%. Crude for June delivery is now down 2.0% and back below $62/bbl which is certainly a good thing for consumers and corporate profit growth for nearly every company outside of the oil complex.
As a reminder, higher energy prices have driven investors like Warren Buffett to build large stakes in Railroads (+1.0%) as more affordable alternatives to trucking. Buffett's Berkshire Hathaway yesterday disclosed sizable positions in Norfolk Southern (NSC 56.36 +0.49) and Union Pacific (UNP 118.83 +0.54). Billionaire investor Carl Icahn disclosed yesterday that he bought 2.6 mln shares of CSX Corp. (CSX 46.08 +0.34).DJ30 +20.68 NASDAQ +1.65 SP500 +3.11 NASDAQ Dec/Adv/Vol 1598/1294/1.01 bln NYSE Dec/Adv/Vol 1509/1620/650 mln
12:00 pm : The indices are bouncing off their recent lows and retracing morning highs as investors juggle a buying spree among billionaires with mixed housing data and valuation concerns.
Stocks rose right out of the gate, lifting the Dow to yet another new all-time high. The price-weighted index's gain was buoyed by SEC filings that showed notable investments in three of its components. Citigroup (C 54.47 +1.68) is the index's best performer this morning, surging 3.2% after hedge fund manager Eddie Lampert disclosed an $800 mln stake. Johnson & Johnson (JNJ 62.78 0.96) is turning in the next best performance (+1.6%) amid confirmation that Warren Buffet's Berkshire Hathaway nearly doubled its stake.
Microsoft (MSFT 30.89 -0.01) is also in focus after George Soros more than doubled his investment in the tech bellwether; but shares are roughly flat after climbing 14% from their mid-March low. In fact, such strong gains from so many other blue-chip names ushered in a wave of consolidation about an hour ago; but it was no match for the underlying bullish momentum that has lifted stocks virtually uncontested for about eight weeks. As of yesterday's close, though, Citigroup and J&J were down 3.3% and 5.8% year to date, further playing into the bulls' argument that valuations remain reasonable and indicative of why both stocks are outperforming today.
Separately, housing starts unexpectedly rose 2.5% in April to 1.528 mln, reflecting some semblance of stabilization. However, building permits, which are a sign of future construction, plunged 8.9% to a 10-year low of 1.429 mln, providing more proof that housing remains mired in a deep slump.
Nonetheless, leadership from just a handful of influential large-caps, as has been the case for several weeks, continues to silence the argument that stocks are clearly running ahead of deteriorating fundamentals. DJ30 +43.39 NASDAQ +4.12 SP500 +5.80 NASDAQ Dec/Adv/Vol 1549/1305/874 mln NYSE Dec/Adv/Vol 1451/1642/562 mln
11:30 am : The major averages now trade in split fashion as sentiment continues to deteriorate. Technology and Consumer Discretionary, which combined account for more than 25% of the total weighting on the S&P 500, have become the latest sectors to turn negative.
With the Dow up 8.3% since the end of March, it's not surprising to see it look ripe for a pullback. The market's recent failure to embrace lower oil prices further underscores the growing sense that stocks are beginning to look overbought after running virtually unabated since the start of April. DJ30 -3.50 NASDAQ -2.07 SP500 +2.19 NASDAQ Dec/Adv/Vol 1706/1104/702 mln NYSE Dec/Adv/Vol 1560/1510/446 mln
11:00 am : The market is well off its best levels, as evidenced by the Dow briefly turning negative, as split industry now dictates today's trading. The Energy sector recently turning negative has removed some notable leadership. Albeit off its worst levels (-1.6% at $62.16/bbl), crude for June delivery is down 1.0% near $62.60/bbl following the largest build in weekly gasoline supplies since early February.
Also noteworthy has been a reversal in Industrials. Deere & Co. (DE 118.10 -2.55) has been the sector's biggest disappointment, exhibiting a 4.4% swing since the open. The stock was up 2.3% at an all-time high after handily beating expectations; but shares are now down 2.1% following cautious remarks in its conference call. DJ30 +3.24 NASDAQ +1.49 SP500 +3.53 NASDAQ Dec/Adv/Vol 1374/1379/534 mln NYSE Dec/Adv/Vol 1350/1655/340 mln
10:30 am : The indices continue to sport gains across the board as buyers remain in control of today's action. Aside from Financials (+0.8%), Health Care (+0.7%) is also acting as an influential source of market support.
Health Care Suppliers (+8.1) ranks as today's best performing S&P industry group after Bausch & Lomb (BOL 66.49 +4.99) agreed to be taken private by Warburg Pincus for $4.5 bln. HMOs (+1.4%) are another sector bright spot following reports that Buffett's Berkshire Hathaway also revealed a roughly $80 mln stake in WellPoint (WLP 85.10 +1.55). DJ30 +46.28 NASDAQ +9.80 SP500 +6.41 NASDAQ Dec/Adv/Vol 1180/1477/374 mln NYSE Dec/Adv/Vol 1147/1773/210 mln
10:00 am : Equities are still on the offensive as nine of 10 economic sectors remain positive. When the most heavily-weighted sector on the S&P 500, Financials (+0.8%), is turning in the day's best performance, it's not surprising to see the market as a whole trading higher.
Even though hedge fund manager Eddie Lampert's disclosed $800 mln stake in Citigroup (C 54.51 +1.72) amounts to only 0.3% of the Citi's outstanding shares, a subsequent 3.3% surge in the Dow component and fourth most influential constituent on the S&P 500 is having a noticeable impact on the broader market. Other Diversified Financial Services (+1.9%) ranks as today's second best performing S&P industry group. DJ30 +46.86 NASDAQ +10.23 SP500 +6.03 NASDAQ Dec/Adv/Vol 880/1586/170 mln NYSE Dec/Adv/Vol 738/1742/66 mln
09:40 am : As expected, stocks bounce back from yesterday's dismal finish as the disclosure of significant investments in some large-cap names from some high-profile investors overshadows mixed housing data. Most notably, blue chips Johnson & Johnson (JNJ 62.50 +0.68), Microsoft (MSFT 31.05 +0.15), and Citigroup (C 54.33 +1.54) are helping to lift the Dow into record territory following large reported stakes from billionaires Warren Buffett, George Soros, and Eddie Lampert, respectively.
Separately, housing starts unexpectedly rose 2.5% in April to 1.528 mln, reflecting some semblance of stabilization. However, building permits, which are a sign of future construction, plunged 8.9% to a 10-year low of 1.429 mln, providing more evidence that the housing sector remains mired in a deep slump.DJ30 +46.08 NASDAQ +10.78 SP500 +7.00 NASDAQ Vol 88 mln NYSE Vol 42 mln
09:15 am : S&P futures vs fair value: +5.2. Nasdaq futures vs fair value: +7.3. Stocks still look to open on an upbeat note as investors sift through the day's last scheduled economic report. April Industrial Production rose 0.7% (consensus 0.3%) while Capacity Utilization, a key inflation gauge, rose to 81.6% (consensus 81.5%) from a revised 81.2%.
09:00 am : S&P futures vs fair value: +3.6. Nasdaq futures vs fair value: +6.0. The stage remains set for stocks to open on an upbeat note. Berkshire Hathaway nearly doubling its stake in Johnson & Johnson (JNJ), Lampert disclosing an $800 mln stake in fellow Dow component Citigroup (C), and Soros more than doubling his investment in another Dow name, Microsoft (MSFT), continue to provide a floor of early support.
All three stocks are also among the most heavily-weighted names on the S&P 500. Fortunately for the bulls, Microsoft's gain is helping to offset another sell-off in Applied Materials (AMAT), which beat analysts' expectations but forecasted flat sales for Q3 and up to a 15% drop in orders.
08:33 am : S&P futures vs fair value: +3.5. Nasdaq futures vs fair value: +5.8. Early indications still suggest stocks will rebound from yesterday's disappointing finish; but futures are off their recent highs following mixed housing data. Housing starts unexpectedly rose 2.5% in April to 1.528 mln (consensus 1.48 mln). That's the highest level this year and is reflective of more stabilization in housing. However, Building Permits, a sign of future construction, fell 8.9% to a 10-year low of 1.429 mln (consensus 1.52 mln). Bonds have held relatively steady in response; the 10-year note is still up 4 ticks to yield 4.68%.
08:00 am : S&P futures vs fair value: +4.3. Nasdaq futures vs fair value: +6.8. After relinquishing what was initially shaping up to be a decent day of gains, S&P 500 and Nasdaq 100 futures are trading above fair value and signaling a modest rebound. The disclosure of significant investments in several large-cap names (e.g. C, JNJ, MSFT, NSC, UNP, and WLP) from billionaire investors like Warren Buffett, George Soros, and Eddie Lampert is contributing to the improved sentiment.
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