AI
Wednesday, October 31, 2007 8:45:07 PM
Market Update 071031
http://biz.yahoo.com/mu/update.html
4:25 pm : Stock market bulls did their thing again on Wednesday, driving the indices higher on encouraging economic news, a batch of reassuring earnings results, and a decision by the Federal Open Market Committee to cut the fed funds and discount rates by 25 basis points each to 4.50 percent and 5.00 percent, respectively.
The FOMC decision wasn't heard until 2:15 pm ET. Prior to that, the market traded with a bullish bias, supported by the government's advanced report that third quarter GDP grew at an annualized rate of 3.9 percent.
The third quarter growth was remarkable when taking into account the subprime fallout, the housing industry downturn, and credit market crisis that highlighted the July to September period. Residential construction, in fact, took a full 1.1 percent off GDP growth. Offsetting gains, though, in consumer spending, business investment, government spending, inventories, net exports and nonresidential construction kept the U.S. economy on a noteworthy growth trajectory.
While fourth quarter GDP is expected by Briefing.com to slow to a pace closer to 1.5 percent to 2.0 percent, the market still walked away from the third quarter GDP report with a sense of comfort that consumer spending and business investment are solid enough to keep the economy out of recession.
The latter consideration, combined with reassuring earnings results and/or guidance from the likes of Mastercard (MA 189.91, +32.76), Transocean (RIG 119.37, +4.50), Clorox (CLX 62.57, +1.57), Kraft (KFT 33.41, +0.81) and Weyerhauser (WY 75.91, +1.60), put the market on a bullish course to begin the session.
Once again, stocks traded higher in the face of a spike in oil prices that followed another government report that showed a surprising 3.89 million barrel decline in crude stockpiles versus the market's expectation for a build of 400,000 barrels. Crude for December delivery, which dropped 3.4 percent on Tuesday after Goldman Sachs said to take profits, surged 4.6 percent to $94.53 per barrel on supply concerns entering the winter heating season.
The boost in crude prices gave a hefty lift to the energy sector (+1.8 percent) which was one of Wednesday's best-performing areas. It was the materials sector (+2.5 percent) that led all comers as strong earnings results from companies like Weyerhauser and Newmont Mining (NEM 50.90, +4.46), and a weak dollar, drove buying interest in the stocks of companies that stand to benefit from rising commodity prices.
The dollar index slipped 0.4 percent to 76.479 in the wake of the Fed's decision to cut interest rates.
In typical fashion, the FOMC decision led to some volatile trading shortly after the decision crossed the wires at 2:15 pm ET. Just prior to the release, the Dow, Nasdaq and S&P were up 53, 16 and 8 points, respectively. Within minutes of the FOMC's announcement, though, they were all showing slight losses.
The knee-jerk selling interest occurred in response to a directive from the FOMC that implied the rate-setting committee is reluctant to cut rates again. That understanding was driven by three items in particular: (1) the committee judging the upside risks to inflation roughly balance the downside risks to growth (2) the acknowledgment that recent increases in energy and commodity prices may put renewed upward pressure on inflation and (3) the indication that Kansas City Fed President Hoenig voted against a rate cut, saying he preferred no change in the fed funds rate.
With added time to examine the statement, the stock market got back into rally-mode driven by the takeaway that the FOMC might be reluctant to cut rates right now, but that it would ultimately do so if need be.
Fittingly, the financial sector (+0.8 percent) played an influential part in driving the late-afternoon rally effort, yet it still underperformed the broader market in Wednesday's trading.
All ten economic sectors closed with a gain. The technology sector (+1.7 percent), paced by ongoing strength in big-cap leaders like Google (GOOG 707.00, +12.23) and Microsoft (MSFT 36.81, +1.24), maintained its leadership role.
The Treasury market, meanwhile, was knocked on its heels by the stock market rally and the Fed's talk about the potential for renewed upward pressures on inflation. The 10-year note slipped 21 ticks, bringing its yield up to 4.46 percent.CRB +2.0% DJ30 +137.54 NASDAQ +42.41 NQ100 +1.4% R2K +1.5% SP400 +1.7% SP500 +18.36 NASDAQ Dec/Adv/Vol 1011/1999/2.52 bln NYSE Dec/Adv/Vol 882/2375/1.39 bln
3:30 pm : The market is now backtracking off its highs as volatility continues. The major indices are still trading with decent gains, and are above pre-FOMC announcement levels.
The dollar moved to its session lows following the FOMC decision, which spurred additional buying interest in the materials sector (+2.0%). Additionally, gold prices have moved back near its intraday high.
Commodities in general have done well this session, with the rally in crude prices driving a 2.0% gain in the CRB Index. DJ30 +85.11 NASDAQ +24.94 SP500 +10.25 NASDAQ Dec/Adv/Vol 1035/1931/2.0 bln NYSE Dec/Adv/Vol 914/2304/1.03 bln
3:00 pm : In typical fashion, trading has been volatile following the FOMC decision. All three indices crossed into negative territory shortly following the FOMC directive, but have since rebounded significantly hitting fresh intraday highs in the last half hour.
All ten economic sectors are back in the green, with the financial sector spearheading the rally.
Conversely, the treasury market is hitting its lows for the day as the stock rally and concerns that the Fed may be done cutting rates for now have contributed to the sell-off.DJ30 +158.27 NASDAQ +43.46 SP500 +20.90 NASDAQ Dec/Adv/Vol 1405/1539/1.71 bln NYSE Dec/Adv/Vol 1215/1979/867 mln
2:25 pm : The FOMC gave the market what it wanted when it elected to cut the fed funds rate and discount rates by 25 basis points each to 4.50% and 5.00%, respectively. The early reaction, however, has been negative with the major indices surrendering nearly the entirety of their pre-FOMC decision gains.
Presumably, traders are disappointed in the implication in the directive that another rate cut is by no means certain. To this end, the FOMC said the upside risks to inflation roughly balance the downside risks to growth.
In addition, there was an acknowledgment that recent increases in energy and commodity prices may put renewed upward pressure on inflation. It is also noteworthy that today's vote wasn't unanimous. Kansas City Fed President Hoenig dissented, preferring no change in the fed funds rate.DJ30 +6.18 NASDAQ +1.76 SP500 +0.49
2:20 pm : As expected, the Fed has cut the fed funds and discount rates by 25 basis points to 4.5% and 5.0%, respectively. Strikingly, the vote to cut the fed funds rate was not unanimous as Kansas City Fed President Hoenig dissented, preferring no change in the rate.
Stay tuned, Briefing.com will provide further analysis at the bottom of the hour. DJ30 +75.11 NASDAQ +18.73 SP500 +10.26
2:00 pm : The major indices have just dipped, but are still holding decent sized gains.
Crude oil has again hit fresh all-time intraday highs. Traders are driving up the price due to supply concerns after U.S. inventories had a draw when a build was expected. Crude is currently up 4.3% to $94.25.
As a reminder, the FOMC announcement will be released in at 14:15 ET, which is approximately 15 minutes from now. Briefing.com expects the Fed to cut policy rates 25 basis points today in both the federal funds and discount rates, leaving policy rates at 4.50% and 5.00%, respectively DJ30 +81.18 NASDAQ +18.89 SP500 +10.62 NASDAQ Dec/Adv/Vol 1070/1826/1.27 bln NYSE Dec/Adv/Vol 1826/2259/646 mln
1:30 pm : The stock market continues to have a bullish bias as the major indices hover around their intraday highs. Participation is broad-based, as no sector is considerably above or below the overall market.
Shares in Newmont Mining (NEM 50.25, +3.81), a Briefing.com Active Portfolio holding, broke out to new highs after posting a solid third quarter result. Earnings came in at $0.42 per share, well above estimates of $0.25. While we wouldn't chase the name, we remain buyers on pull backs. DJ30 +71.37 NASDAQ +22.70 SP500 +11.79 NASDAQ Dec/Adv/Vol 1094/1769/1.16 bln NYSE Dec/Adv/Vol 930/2221/587 mln
1:00 pm : The major indices have had a slight dip, but are still trading slightly below their intraday highs.
The materials (+1.4%), energy (+1.3%) tech (+1.0%) sectors are providing leadership. Materials and energy were the main laggards yesterday, while tech was a leader.
The consumer discretionary (+0.2%), healthcare (+0.2%) and consumer staples (+0.3%) sectors are underperforming on a relative basis. A notable pocket of weakness is in the S&P 500 Retailing Index (-0.2%).DJ30 +62.51 NASDAQ +20.51 SP500 +10.87 NASDAQ Dec/Adv/Vol 1074/1777/1.04 bln NYSE Dec/Adv/Vol 889/2227/534 mln
12:30 pm : The stock market has had a nice pickup in buying interest that has pushed the major indices into fresh intraday highs. Buying interest has been broad-based.
Crude oil for December delivery briefly hit $94.00 per barrel, surpassing the previous high of $93.80 reached on Monday. After a slight retreat a barrel is currently at $93.28.
At the same time, the Dollar Index hit an all-time low of 76.62. DJ30 +66.17 NASDAQ +23.18 SP500 +11.25 NASDAQ Dec/Adv/Vol 1084/1727/927 mln NYSE Dec/Adv/Vol 993/2120/461 mln
12:00 pm : Leading up to the East Coast lunch hour, the stock market has had a large number of earnings and economic reports to process. For the most part, reports have been bullish and that has kept the major indices in the green.
However, investors still have to wait a few more hours to get what they have really been craving, the FOMC announcement at 14:15 ET. Briefing.com expects a 25 basis point cut to the fed funds and discount rates.
Third quarter real GDP rose at a 3.9% annual rate. This is pretty amazing. This is the quarter in which the subprime mortgage mess hit the credit markets, employment growth slowed, housing prices were in the headlines every day, and the stock market tumbled. Yet, the resilient US economy kept right on growing.
Further good news comes from the fact that GDP deflator (inflation measure) was up at just a 0.8 percent annual rate in the quarter.
Some of the strength will prove temporary, leading to talk that the fourth quarter GDP will be much lower, which is true. Briefing.com expects an increase to a 1.5 percent to 2 percent annual rate.
Meanwhile, the Employment Cost Index slipped to 0.8%. Economist expected the reading to be 0.9%.
The October Chicago PMI, a regional manufacturer survey, slipped to 49.7. Economists were expecting the number to come in at 53.0. This is not a good report as a number below 50 is intended to indicate a decline in manufacturing. The report should not be overemphasized, though, as it is merely a survey.
Earnings news was good. Among others, Kraft (KFT 33.17, +0.57), Clorox (CLX 62.72, +1.72), MasterCard (MA 184.10, 26.95) and Newmont Mining (NEM 50.11, +3.66) topped expectations.
All ten economic sectors are in the green, with energy (+1.7%) providing leadership following a spike in crude oil.
The weekly energy inventory report for the week ended Oct. 26th showed that crude had a draw of 3.89 million barrels. A build of 400k was expected. Oil rallied following the report, and is currently up 3.4% to $93.45. With the exception of airlines (-1.2%), stocks have been unfazed by the rally in crude prices. DJ30 +54.30 NASDAQ +19.96 SP500 +10.65 NASDAQ Dec/Adv/Vol 1232/1560/782 mln NYSE Dec/Adv/Vol 1036/2022/393 mln
11:30 am : For now, buying interest has faded, but there has not been any concerted selling effort as the stock market holds near its session high.
There is a notable pocket of weakness in the Amex Airline Index (-1.4%) and the Dow Jones Transportation Average (+0.3%). They dipped following the spike in crude oil prices.
DJ30 +48.45 NASDAQ +9.52 SP500 +15.42 NASDAQ Dec/Adv/Vol 1203/1539/653 mln NYSE Dec/Adv/Vol 1031/2000/323 mln
11:00 am : Oil has spiked 3.1% to $93.21 a barrel following the report that showed a substantial draw when a small build was expected. This jump in crude equates to a $1.85 increase per barrel in the past half hour.
As has been the case of late, the stock market is unfazed by rising crude prices. Since the last update, the S&P and Nasdaq hit fresh intraday highs.
MasterCard's (MA 177.99, +20.84) stock has had a nice spike this session. The company reported third-quarter earnings per share of $1.80, excluding items, which is well-ahead of the street's initial forecast of $1.42 per share. DJ30 +43.41 NASDAQ +14.06 SP500 +8.99 NASDAQ Dec/Adv/Vol 1176/1466/491 mln NYSE Dec/Adv/Vol 1061/1891/236 mln
10:30 am : The major indices have recovered from their dip and are trading near their session highs.
The weekly energy inventory report for the week ended Oct. 26th, just released by the Energy Information Administration, showed that crude had a draw of 3.89 million barrels. A build of 400k was expected. Immediately prior to the report, oil was trading up 1.1% to $91.36.
Separately, construction spending in September rose 0.3%, compared to the expected 0.2% decline. August's reading was revised to a 0.2% gain. DJ30 +49.51 NASDAQ +12.11 SP500 +8.02 NASDAQ Dec/Adv/Vol 1148/1403/335 mln NYSE Dec/Adv 1029/1826
10:00 am : The October Chicago PMI, a regional manufacturer survey, slipped to 49.7. Economists were expecting the number to come in at 53.0. September's reading was 54.2. A number below 50 indicates a decline in manufacturing.
The major indices dipped following the data, but still remain in positive territory. All ten economic sectors are in the green. The financial (+0.5%) and tech (+0.6%) sectors are providing leadership in the early-going. DJ30 +23.82 NASDAQ +8.88 SP500 +5.31
09:40 am : Bullish news helped the stock market open in the green. Third quarter GDP came in at a strong 3.9%, compared to the consensus estimate of 3.1%. The Employment Cost Index slipped to 0.8%. Economist expected the reading to be 0.9%.
Earnings news was also good. Among others, Kraft (KFT), Clorox (CLX), MasterCard (MA) and Newmont Mining (NEM) topped expectations.
Separately, Dell (DELL) filed past due reports, including restated results for fiscal 2003 through fiscal 2007.
The main focus of attention today, however, will be the FOMC announcement at 14:15 ET. Briefing.com expects a 25 basis point cut in the federal funds and discount rates. DJ30 +51.86 NASDAQ +11.84 SP500 +7.94
09:15 am : S&P futures vs fair value: +5.1. Nasdaq futures vs fair value: +3.0. The futures market continues suggest a positive opening. The news this morning is bullish, and the market has a tendency to rise on Fed policy announcement days.
09:00 am : S&P futures vs fair value: +5.1. Nasdaq futures vs fair value: +3.0.
08:33 am : S&P futures vs fair value: +5.7. Nasdaq futures vs fair value: +2.5. Futures were choppy immediately following two economic releases, but are now trading slightly higher than pre data release levels. Third Quarter GDP rose to an annualized rate of 3.9%, while the Employment Cost Index came in at 0.8%. Separately, MasterCard (MA) topped its earnings estimates.
08:00 am : S&P futures vs fair value: +4.9. Nasdaq futures vs fair value: +2.0. Futures point to a positive start as the market awaits the FOMC policy statement at 14:15 ET. Kraft (KFT) and Clorox (CLX) topped their earnings expectations and provided reassuring guidance. Meanwhile, Dell restated its results for fiscal 2003 to fiscal 2007. Dell also said it will resume its buyback program after it reports third quarter results. The GDP and Employment Cost Index are set to be released at 8:30 ET
06:21 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +1.5.
http://biz.yahoo.com/mu/update.html
4:25 pm : Stock market bulls did their thing again on Wednesday, driving the indices higher on encouraging economic news, a batch of reassuring earnings results, and a decision by the Federal Open Market Committee to cut the fed funds and discount rates by 25 basis points each to 4.50 percent and 5.00 percent, respectively.
The FOMC decision wasn't heard until 2:15 pm ET. Prior to that, the market traded with a bullish bias, supported by the government's advanced report that third quarter GDP grew at an annualized rate of 3.9 percent.
The third quarter growth was remarkable when taking into account the subprime fallout, the housing industry downturn, and credit market crisis that highlighted the July to September period. Residential construction, in fact, took a full 1.1 percent off GDP growth. Offsetting gains, though, in consumer spending, business investment, government spending, inventories, net exports and nonresidential construction kept the U.S. economy on a noteworthy growth trajectory.
While fourth quarter GDP is expected by Briefing.com to slow to a pace closer to 1.5 percent to 2.0 percent, the market still walked away from the third quarter GDP report with a sense of comfort that consumer spending and business investment are solid enough to keep the economy out of recession.
The latter consideration, combined with reassuring earnings results and/or guidance from the likes of Mastercard (MA 189.91, +32.76), Transocean (RIG 119.37, +4.50), Clorox (CLX 62.57, +1.57), Kraft (KFT 33.41, +0.81) and Weyerhauser (WY 75.91, +1.60), put the market on a bullish course to begin the session.
Once again, stocks traded higher in the face of a spike in oil prices that followed another government report that showed a surprising 3.89 million barrel decline in crude stockpiles versus the market's expectation for a build of 400,000 barrels. Crude for December delivery, which dropped 3.4 percent on Tuesday after Goldman Sachs said to take profits, surged 4.6 percent to $94.53 per barrel on supply concerns entering the winter heating season.
The boost in crude prices gave a hefty lift to the energy sector (+1.8 percent) which was one of Wednesday's best-performing areas. It was the materials sector (+2.5 percent) that led all comers as strong earnings results from companies like Weyerhauser and Newmont Mining (NEM 50.90, +4.46), and a weak dollar, drove buying interest in the stocks of companies that stand to benefit from rising commodity prices.
The dollar index slipped 0.4 percent to 76.479 in the wake of the Fed's decision to cut interest rates.
In typical fashion, the FOMC decision led to some volatile trading shortly after the decision crossed the wires at 2:15 pm ET. Just prior to the release, the Dow, Nasdaq and S&P were up 53, 16 and 8 points, respectively. Within minutes of the FOMC's announcement, though, they were all showing slight losses.
The knee-jerk selling interest occurred in response to a directive from the FOMC that implied the rate-setting committee is reluctant to cut rates again. That understanding was driven by three items in particular: (1) the committee judging the upside risks to inflation roughly balance the downside risks to growth (2) the acknowledgment that recent increases in energy and commodity prices may put renewed upward pressure on inflation and (3) the indication that Kansas City Fed President Hoenig voted against a rate cut, saying he preferred no change in the fed funds rate.
With added time to examine the statement, the stock market got back into rally-mode driven by the takeaway that the FOMC might be reluctant to cut rates right now, but that it would ultimately do so if need be.
Fittingly, the financial sector (+0.8 percent) played an influential part in driving the late-afternoon rally effort, yet it still underperformed the broader market in Wednesday's trading.
All ten economic sectors closed with a gain. The technology sector (+1.7 percent), paced by ongoing strength in big-cap leaders like Google (GOOG 707.00, +12.23) and Microsoft (MSFT 36.81, +1.24), maintained its leadership role.
The Treasury market, meanwhile, was knocked on its heels by the stock market rally and the Fed's talk about the potential for renewed upward pressures on inflation. The 10-year note slipped 21 ticks, bringing its yield up to 4.46 percent.CRB +2.0% DJ30 +137.54 NASDAQ +42.41 NQ100 +1.4% R2K +1.5% SP400 +1.7% SP500 +18.36 NASDAQ Dec/Adv/Vol 1011/1999/2.52 bln NYSE Dec/Adv/Vol 882/2375/1.39 bln
3:30 pm : The market is now backtracking off its highs as volatility continues. The major indices are still trading with decent gains, and are above pre-FOMC announcement levels.
The dollar moved to its session lows following the FOMC decision, which spurred additional buying interest in the materials sector (+2.0%). Additionally, gold prices have moved back near its intraday high.
Commodities in general have done well this session, with the rally in crude prices driving a 2.0% gain in the CRB Index. DJ30 +85.11 NASDAQ +24.94 SP500 +10.25 NASDAQ Dec/Adv/Vol 1035/1931/2.0 bln NYSE Dec/Adv/Vol 914/2304/1.03 bln
3:00 pm : In typical fashion, trading has been volatile following the FOMC decision. All three indices crossed into negative territory shortly following the FOMC directive, but have since rebounded significantly hitting fresh intraday highs in the last half hour.
All ten economic sectors are back in the green, with the financial sector spearheading the rally.
Conversely, the treasury market is hitting its lows for the day as the stock rally and concerns that the Fed may be done cutting rates for now have contributed to the sell-off.DJ30 +158.27 NASDAQ +43.46 SP500 +20.90 NASDAQ Dec/Adv/Vol 1405/1539/1.71 bln NYSE Dec/Adv/Vol 1215/1979/867 mln
2:25 pm : The FOMC gave the market what it wanted when it elected to cut the fed funds rate and discount rates by 25 basis points each to 4.50% and 5.00%, respectively. The early reaction, however, has been negative with the major indices surrendering nearly the entirety of their pre-FOMC decision gains.
Presumably, traders are disappointed in the implication in the directive that another rate cut is by no means certain. To this end, the FOMC said the upside risks to inflation roughly balance the downside risks to growth.
In addition, there was an acknowledgment that recent increases in energy and commodity prices may put renewed upward pressure on inflation. It is also noteworthy that today's vote wasn't unanimous. Kansas City Fed President Hoenig dissented, preferring no change in the fed funds rate.DJ30 +6.18 NASDAQ +1.76 SP500 +0.49
2:20 pm : As expected, the Fed has cut the fed funds and discount rates by 25 basis points to 4.5% and 5.0%, respectively. Strikingly, the vote to cut the fed funds rate was not unanimous as Kansas City Fed President Hoenig dissented, preferring no change in the rate.
Stay tuned, Briefing.com will provide further analysis at the bottom of the hour. DJ30 +75.11 NASDAQ +18.73 SP500 +10.26
2:00 pm : The major indices have just dipped, but are still holding decent sized gains.
Crude oil has again hit fresh all-time intraday highs. Traders are driving up the price due to supply concerns after U.S. inventories had a draw when a build was expected. Crude is currently up 4.3% to $94.25.
As a reminder, the FOMC announcement will be released in at 14:15 ET, which is approximately 15 minutes from now. Briefing.com expects the Fed to cut policy rates 25 basis points today in both the federal funds and discount rates, leaving policy rates at 4.50% and 5.00%, respectively DJ30 +81.18 NASDAQ +18.89 SP500 +10.62 NASDAQ Dec/Adv/Vol 1070/1826/1.27 bln NYSE Dec/Adv/Vol 1826/2259/646 mln
1:30 pm : The stock market continues to have a bullish bias as the major indices hover around their intraday highs. Participation is broad-based, as no sector is considerably above or below the overall market.
Shares in Newmont Mining (NEM 50.25, +3.81), a Briefing.com Active Portfolio holding, broke out to new highs after posting a solid third quarter result. Earnings came in at $0.42 per share, well above estimates of $0.25. While we wouldn't chase the name, we remain buyers on pull backs. DJ30 +71.37 NASDAQ +22.70 SP500 +11.79 NASDAQ Dec/Adv/Vol 1094/1769/1.16 bln NYSE Dec/Adv/Vol 930/2221/587 mln
1:00 pm : The major indices have had a slight dip, but are still trading slightly below their intraday highs.
The materials (+1.4%), energy (+1.3%) tech (+1.0%) sectors are providing leadership. Materials and energy were the main laggards yesterday, while tech was a leader.
The consumer discretionary (+0.2%), healthcare (+0.2%) and consumer staples (+0.3%) sectors are underperforming on a relative basis. A notable pocket of weakness is in the S&P 500 Retailing Index (-0.2%).DJ30 +62.51 NASDAQ +20.51 SP500 +10.87 NASDAQ Dec/Adv/Vol 1074/1777/1.04 bln NYSE Dec/Adv/Vol 889/2227/534 mln
12:30 pm : The stock market has had a nice pickup in buying interest that has pushed the major indices into fresh intraday highs. Buying interest has been broad-based.
Crude oil for December delivery briefly hit $94.00 per barrel, surpassing the previous high of $93.80 reached on Monday. After a slight retreat a barrel is currently at $93.28.
At the same time, the Dollar Index hit an all-time low of 76.62. DJ30 +66.17 NASDAQ +23.18 SP500 +11.25 NASDAQ Dec/Adv/Vol 1084/1727/927 mln NYSE Dec/Adv/Vol 993/2120/461 mln
12:00 pm : Leading up to the East Coast lunch hour, the stock market has had a large number of earnings and economic reports to process. For the most part, reports have been bullish and that has kept the major indices in the green.
However, investors still have to wait a few more hours to get what they have really been craving, the FOMC announcement at 14:15 ET. Briefing.com expects a 25 basis point cut to the fed funds and discount rates.
Third quarter real GDP rose at a 3.9% annual rate. This is pretty amazing. This is the quarter in which the subprime mortgage mess hit the credit markets, employment growth slowed, housing prices were in the headlines every day, and the stock market tumbled. Yet, the resilient US economy kept right on growing.
Further good news comes from the fact that GDP deflator (inflation measure) was up at just a 0.8 percent annual rate in the quarter.
Some of the strength will prove temporary, leading to talk that the fourth quarter GDP will be much lower, which is true. Briefing.com expects an increase to a 1.5 percent to 2 percent annual rate.
Meanwhile, the Employment Cost Index slipped to 0.8%. Economist expected the reading to be 0.9%.
The October Chicago PMI, a regional manufacturer survey, slipped to 49.7. Economists were expecting the number to come in at 53.0. This is not a good report as a number below 50 is intended to indicate a decline in manufacturing. The report should not be overemphasized, though, as it is merely a survey.
Earnings news was good. Among others, Kraft (KFT 33.17, +0.57), Clorox (CLX 62.72, +1.72), MasterCard (MA 184.10, 26.95) and Newmont Mining (NEM 50.11, +3.66) topped expectations.
All ten economic sectors are in the green, with energy (+1.7%) providing leadership following a spike in crude oil.
The weekly energy inventory report for the week ended Oct. 26th showed that crude had a draw of 3.89 million barrels. A build of 400k was expected. Oil rallied following the report, and is currently up 3.4% to $93.45. With the exception of airlines (-1.2%), stocks have been unfazed by the rally in crude prices. DJ30 +54.30 NASDAQ +19.96 SP500 +10.65 NASDAQ Dec/Adv/Vol 1232/1560/782 mln NYSE Dec/Adv/Vol 1036/2022/393 mln
11:30 am : For now, buying interest has faded, but there has not been any concerted selling effort as the stock market holds near its session high.
There is a notable pocket of weakness in the Amex Airline Index (-1.4%) and the Dow Jones Transportation Average (+0.3%). They dipped following the spike in crude oil prices.
DJ30 +48.45 NASDAQ +9.52 SP500 +15.42 NASDAQ Dec/Adv/Vol 1203/1539/653 mln NYSE Dec/Adv/Vol 1031/2000/323 mln
11:00 am : Oil has spiked 3.1% to $93.21 a barrel following the report that showed a substantial draw when a small build was expected. This jump in crude equates to a $1.85 increase per barrel in the past half hour.
As has been the case of late, the stock market is unfazed by rising crude prices. Since the last update, the S&P and Nasdaq hit fresh intraday highs.
MasterCard's (MA 177.99, +20.84) stock has had a nice spike this session. The company reported third-quarter earnings per share of $1.80, excluding items, which is well-ahead of the street's initial forecast of $1.42 per share. DJ30 +43.41 NASDAQ +14.06 SP500 +8.99 NASDAQ Dec/Adv/Vol 1176/1466/491 mln NYSE Dec/Adv/Vol 1061/1891/236 mln
10:30 am : The major indices have recovered from their dip and are trading near their session highs.
The weekly energy inventory report for the week ended Oct. 26th, just released by the Energy Information Administration, showed that crude had a draw of 3.89 million barrels. A build of 400k was expected. Immediately prior to the report, oil was trading up 1.1% to $91.36.
Separately, construction spending in September rose 0.3%, compared to the expected 0.2% decline. August's reading was revised to a 0.2% gain. DJ30 +49.51 NASDAQ +12.11 SP500 +8.02 NASDAQ Dec/Adv/Vol 1148/1403/335 mln NYSE Dec/Adv 1029/1826
10:00 am : The October Chicago PMI, a regional manufacturer survey, slipped to 49.7. Economists were expecting the number to come in at 53.0. September's reading was 54.2. A number below 50 indicates a decline in manufacturing.
The major indices dipped following the data, but still remain in positive territory. All ten economic sectors are in the green. The financial (+0.5%) and tech (+0.6%) sectors are providing leadership in the early-going. DJ30 +23.82 NASDAQ +8.88 SP500 +5.31
09:40 am : Bullish news helped the stock market open in the green. Third quarter GDP came in at a strong 3.9%, compared to the consensus estimate of 3.1%. The Employment Cost Index slipped to 0.8%. Economist expected the reading to be 0.9%.
Earnings news was also good. Among others, Kraft (KFT), Clorox (CLX), MasterCard (MA) and Newmont Mining (NEM) topped expectations.
Separately, Dell (DELL) filed past due reports, including restated results for fiscal 2003 through fiscal 2007.
The main focus of attention today, however, will be the FOMC announcement at 14:15 ET. Briefing.com expects a 25 basis point cut in the federal funds and discount rates. DJ30 +51.86 NASDAQ +11.84 SP500 +7.94
09:15 am : S&P futures vs fair value: +5.1. Nasdaq futures vs fair value: +3.0. The futures market continues suggest a positive opening. The news this morning is bullish, and the market has a tendency to rise on Fed policy announcement days.
09:00 am : S&P futures vs fair value: +5.1. Nasdaq futures vs fair value: +3.0.
08:33 am : S&P futures vs fair value: +5.7. Nasdaq futures vs fair value: +2.5. Futures were choppy immediately following two economic releases, but are now trading slightly higher than pre data release levels. Third Quarter GDP rose to an annualized rate of 3.9%, while the Employment Cost Index came in at 0.8%. Separately, MasterCard (MA) topped its earnings estimates.
08:00 am : S&P futures vs fair value: +4.9. Nasdaq futures vs fair value: +2.0. Futures point to a positive start as the market awaits the FOMC policy statement at 14:15 ET. Kraft (KFT) and Clorox (CLX) topped their earnings expectations and provided reassuring guidance. Meanwhile, Dell restated its results for fiscal 2003 to fiscal 2007. Dell also said it will resume its buyback program after it reports third quarter results. The GDP and Employment Cost Index are set to be released at 8:30 ET
06:21 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +1.5.
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