AI
Friday, November 09, 2007 8:12:13 PM
Market Update 071109
http://biz.yahoo.com/mu/update.html
4:25 pm : The weekend couldn't come soon enough for weary market participants who witnessed another tumultuous day of trading on Friday.
Bothered by both rumors and truths surrounding more write-downs for the financial sector and disappointing guidance from another large-cap technology company, the market took a dive in early action. At their lows of the morning, the Dow, Nasdaq and S&P were down 249, 71 and 26 points, respectively.
The tech sector led the retreat, falling as much as 3.0% in the wake of Qualcomm (QCOM 38.10, -1.66) providing earnings guidance for its fiscal first quarter and the fiscal year that was below consensus estimates due to lower handset demand. The indication reignited concerns, which were sparked on Thursday by Cisco's relatively disappointing second quarter outlook, that the tech stocks, and specifically the large-cap tech stocks, had gotten ahead of themselves.
The financial sector followed close behind, falling 2.6% at its worst levels. That decline was driven by an announcement from Wachovia (WB 40.65, +0.35) that its loan loss provision for the fourth quarter would be between $500 million and $600 million in excess of charge-offs. Additionally, Wachovia indicated that the value of its asset-backed CDOs had declined approximately $1.1 billion pre-tax in the month of October alone.
Wachovia's news was accompanied by a disappointing earnings report from Fannie Mae (FNM 49.00, -0.80) and rumors that Barclays (BCS 39.86, -1.48) was going to announce a $10 billion write-down. Barclays denounced the rumors as having no substance.
Strikingly, the financial sector made a spirited rally effort throughout the afternoon. At one point, the financial sector was up 2.4% for the session. The rally was forged in the face of subsequent warnings from JPMorgan Chase (JPM 42.31, -0.30) and Bank of America (BAC 43.98, +0.48) that potential write-downs would most likely pressure their fourth quarter results.
The turn in the financial sector helped the broader market pare its losses by a significant margin. However, the rally try was rudely interrupted by an aggressive wave of selling in the last half hour of trading that pushed the major indices back toward their worst levels for the day. The financial sector (+0.1%) ended the session basically flat.
The late selling, presumably, was driven by a growing sense of uneasiness in holding positions over the weekend as traders remained cognizant that the headline risk surrounding the financial sector remains high.
In any event, it seemed to be a fitting end to a week that was governed by a negative tone.
Dow component Merck (MRK 55.90, +1.13) managed to buck the broader selling trend as the company's announcement that it would be settling a significant portion of the Vioxx lawsuits for $4.85 billion was viewed by investors with a sense of relief.
Friday's economic data included a report on import prices that was higher than expected, a September trade deficit of $56.5 billion that was better than expected, and a preliminary reading on consumer sentiment for November from the University of Michigan that was measured at 75.0, the lowest level since October 2005.
On balance, the data didn't do much to help the stock market, which stayed preoccupied with the fallout in the financial and technology sectors, and the continued weakness in the dollar.
The Treasury market, once again, was a beneficiary of the stock market's struggle as it was bid higher in a flight-to-safety trade. The 10-year noted ended up 18 ticks, bringing its yield down to 4.21%. DJ30 -223.55 NASDAQ -68.06 SP500 -21.07 NASDAQ Dec/Adv/Vol 1988/1025/2.98 bln NYSE Dec/Adv/Vol 2397/885/1.83 bln
3:30 pm : Heading into the final half-hour of trading, the stock market is trading at its best levels of the session. While none of the major indices have made it to positive territory, they have staged an impressive comeback that has pared the majority of their intraday losses.
Five of the major sectors are in positive territory, with the financials (+2.4%) providing leadership.
Overall, this has been a rough week for the stock market, with the S&P 500 finishing lower three of the four previous trading days. The Nasdaq Composite, meanwhile, is down roughly 5% for the week at current levels.DJ30 -83.98 NASDAQ -28.99 SP500 -2.82 NASDAQ Dec/Adv/Vol 1889/1092/2.36 bln NYSE Dec/Adv/Vol 2221/1056/1.36 mln
3:00 pm : The stock market continues to trade near its best levels of the session following a late day surge in buying interest, but remains in the red. Strikingly, like yesterday, the financial sector (+1.9%) is spearheading the late day rally. The reversal of the financial sector is especially impressive considering it has rallied 4.5% from its intraday low.
The Dow, Nasdaq, and S&P 500 have pared 153, 35 and 22 points, respectively from their session lows.DJ30 -115.03 NASDAQ -40.05 SP500 -6.52 NASDAQ Dec/Adv/Vol 1815/1154/2.18 mln NYSE Dec/Adv/Vol 2200/1077/1.25 bln
2:30 pm : An increase in buying interest has pushed the major indices to their best levels of the session since the opening plunge. The S&P 500 is now down only 4 points, which is especially impressive considering it was down 26 points at its lowest level of the session.
Buying interest is broad-based, but the influential financial sector (+1.3%) is playing a large role as it springs into leadership.
Of note, Wachovia (WB 40.76, +0.46), which caused the sell-off of financials this morning, has made it back to positive territory.DJ30 -90.72 NASDAQ -33.14 SP500 -4.42 NASDAQ Dec/Adv/Vol 2019/951/1.97 bln NYSE Dec/Adv/Vol 2415/848/1.11 bln
2:05 pm : The stock market is heading mostly sideways as investors continue to show apprehension.
22 of the 30 dow components are in the red. IBM (IBM 100.27, -5.84) and 3M (MMM 79.59, -3.24) are the main laggards. Merck (MRK 56.99, +2.22) and AIG (AIG 56.59, +0.59) are providing leadership.
Decliners outpace advancers at the Nasdaq by more than a 2-to-1 margin and at the NYSE by more than a 3-to-1 margin.DJ30 -161.12 NASDAQ -57.84 SP500 -14.74 NASDAQ Dec/Adv/Vol 2070/881/1.83 bln NYSE Dec/Adv/Vol 2485/766/1.04 bln
1:35 pm : There has been a lack of concerted buying and selling interest over the past hour as the indices have been range bound.
European markets finished lower as investors continued to dump banking shares on persistent credit worries.DJ30 -153.40 NASDAQ -51.00 SP500 -12.48 NASDAQ Dec/Adv/Vol 2114/802/1.68 bln NYSE Dec/Adv/Vol 2524/714/955 mln
12:55 pm : The financial sector (+0.2%) is back on the rise. While the major indices still have a long way to go to make it back into the green, the recovery thus far has been decent considering earlier in the trading session the indices slipped below yesterday's lows.
The financial sector is getting support from regional banks (+1.6%) and property & casualty insurers (+2.2%). Meanwhile, Barclays (BCS 40.16, -1.18) CEO said in a memo to employees he would have made an announcement if rumors were true.
The Amex Airline Index is down 3.4%. The index has struggled, as it is down over 30% year-to-date.DJ30 -153.56 NASDAQ -51.54 SP500 -13.22 NASDAQ Dec/Adv/Vol 1995/896/1.52 bln NYSE Dec/Adv/Vol 2486/744/840 mln
12:30 pm : Buying efforts have faded, as the financial sector (-0.1%) slips back into the red. The tech sector (-2.8%) is struggling today, but eBay (EBAY 33.08, +0.68) is bucking the negative trend.
Piper Jaffray upgraded eBay to Outperform from Market Perform and set a price target of $43. Piper believes eBay's shares are attractive following its 20% decline since reporting earnings and that listings are back-on-track for the fourth quarter. Piper also believes new initiatives, including improved search and navigation, will improve the buying experience and improve conversion rates in 2008. DJ30 -161.93 NASDAQ -56.68 SP500 -15.01 NASDAQ Dec/Adv/Vol 2073/795/1.38 bln NYSE Dec/Adv/Vol 2552/672/764 mln
12:00 pm : The stock market was unable to maintain momentum from yesterday's late-day rally as the major indices opened deep in the red. The stock market has pared a good portion of its intraday losses at the East Coast lunch hour, aided by a swift turnaround in the financial sector (+0.4%) The financial and tech (-2.5%) sectors are once again topping the headlines.
The Financial sector, which Briefing.com has held at an underweight rating since April, is trading in a volatile manner following reports of write-downs at major financial institutions. Today Wachovia (WB 39.60, -0.70) and Barclays (BCS 39.91, -1.43) have been thrown in the spotlight.
In the case of Barclays, there was a nasty rumor that it was on the verge of announcing a $10 billion write-down related to losses on mortgage-backed securities. Follow-up press reports indicate, however, that Barclays has said there is no substance to that rumor. In refuting the rumor, it would have been more comforting if Barclays said it won't be taking any write-downs. It's just denying that it won't be announcing a $10 billion write-down.
Wachovia, on the other hand, announced in an 8-K filing that it suffered further declines in the value of its asset-backed collateralized debt obligations to the tune of approximately $1.1 billion pre-tax in the month of October alone. It added that its loan loss provisions for the fourth quarter are estimated to be between $500 million and $600 million in excess of charge-offs for the quarter. This announcement is driving concerns about the consumer.
Meanwhile, the tech sector is under pressure following Qualcomm's (QCOM 38.41, -1.35) earnings report. Qualcomm exceeded analysts' expectations for the fiscal fourth quarter, but the San Diego-based company provided a bleak outlook for the current year due to lower handset demand and higher litigation expenses. Tech fell nearly 4% yesterday following a disappointing outlook from Cisco (CSCO 28.62, -1.01).
Risk aversion is evident in the market today. The defensive healthcare (+0.6%), telecom (+0.4%), utilities (-0.2%) and consumer staples (-0.3%) sectors are outperforming on a relative basis. Meanwhile, the 10-year note has rallied, pushing its yield down to 4.22%.
On the economic front, the preliminary University of Michigan Consumer Sentiment Index slipped to 75.0, its lowest level since October of 2005. Economists expected a reading of 80.0.
The Commerce Dept. reports that the U.S. trade deficit narrowed in September to $56.5 billion, from a revised reading of $56.8 billion in August. Economists expected a deficit of $58.5 billion.
The stock market's reaction to both economic releases was relatively muted. DJ30 -128.44 NASDAQ -52.19 SP500 -12.60 NASDAQ Dec/Adv/Vol 2118/714/1.22 bln NYSE Dec/Adv/Vol 2623/550/632 mln
11:30 am : Since the last update, the stock market hit a fresh intraday low, but has since recovered as financials (-0.9%) once again bounce off its session lows. The major indices, though, are still posting losses of at least 1.0%.
As stocks decline, there is a pick up of buying interest in bonds, pushing the 10-year note yield down to 4.2%.DJ30 -180.63 NASDAQ -61.45 SP500 -17.13 NASDAQ Dec/Adv/Vol 2191/592/1.02 bln NYSE Dec/Adv/Vol 2637/500/527 mln
11:00 am : The stock market has been unable to maintain momentum as it slips toward its intraday lows. Crude oil is now up 0.8% to $96.20.
Reuters reports that Lehman Brothers' (LEH 55.27, -0.84) Chief Global Bond Strategist sees the "deepest correction" ever in structured finance and the current market is in "recession-risk denial". The Chief Bond Strategist also expressed the opinion that the U.S. credit crisis is now worse than the one caused by Long-Term Capital Management.
Long-Term Capital Management was a hedge fund that had massive losses in 1998. It is said to have nearly brought down the financial system due to its extreme leveraging. DJ30 -169.08 NASDAQ -59.27 SP500 -18.17 NASDAQ Dec/Adv/Vol 1994/708/765 mln NYSE Dec/Adv/Vol 2498/562/372 mln
10:30 am : The major indices have recovered off their lows, despite a worse-than-expected economic report. The indices are still in the red, but have pared a good portion of their intraday losses due to a broad-based pickup in buying interest led by the financial sector (-0.6%). The telecom (+0.5%) and healthcare (+0.1%) sectors are now in the green.
Reported at 10:00 ET, the preliminary University of Michigan Consumer Sentiment Index slipped to 75.0, its lowest level since October of 2005. Economists expected a reading of 80.0.DJ30 -123.56 NASDAQ -43.06 SP500 -12.83 NASDAQ Dec/Adv/Vol 2087/539/506 mln NYSE Dec/Adv/Vol 2661/312/193 mln
10:00 am : The main laggards are the financial (-2.5%) and tech (-2.4%) sectors, which are a significant drag on the broader market. The sectors combined make up more than 30% of the S&P's market capitalization. There is a lack of strength in all sectors, as all ten are in negative territory.
In corporate news this morning, Merck & Co. (MRK 56.54, +1.77) has agreed to pay $4.85 billion to resolve claims of strokes and heart attacks related to its withdrawn painkiller Vioxx. Although the drug maker has successfully defended itself against a barrage of lawsuits, the agreement could put the uncertainty of possible settlements behind the company and allow it to focus on its business operations. Investors welcomed the news, sending shares more than 3% higher in early-trading. DJ30 -168.52 NASDAQ -56.64 SP500 -21.99
09:40 am : The equity market is on the defensive following disappointing developments in the two most influential sectors in terms of their weighting.
The financial sector is under pressure after Wachovia (WB) announced that its CDOs dropped in value by $1.1 billion and that it increased provisions for loan losses in the fourth quarter by $500 million. There were also rumors that London based Barclays (BCS) is getting ready to announce a write-down of as much as $10 billion. According to Dow Jones, Barclays said there was no substance to those rumors.
The tech sector, which declined nearly 4.0% yesterday, is again out of favor following disappointing guidance from Qualcomm (QCOM). DJ30 -165.59 NASDAQ -62.84 SP500 -22.87
09:14 am : S&P futures vs fair value: -17.2. Nasdaq futures vs fair value: -42.5.
09:00 am : S&P futures vs fair value: -18.1. Nasdaq futures vs fair value: -41.0. Futures trade indicates that is going to be another tough day for large-cap tech stocks.
08:34 am : S&P futures vs fair value: -19.5. Nasdaq futures vs fair value: -37.0. Just hitting the wires, the Commerce Dept. reports that the U.S. trade deficit narrowed in September to $56.5 bln, from a downwardly revised reading of $56.8 bln in August. Economists expected a deficit of $58.5 billion. Futures reaction is limited.
08:00 am : S&P futures vs fair value: -18.0. Nasdaq futures vs fair value: -31.5. Early indications suggest a decidedly lower open. The catalysts for the negative bias include disappointing guidance from Qualcomm (QCOM) and news from Wachovia (WB) that it saw a $1.1 billion decline in the value of its collateralized debt obligations and expects to increase its provision for loan losses in the fourth quarter by $500 million to $600 million in excess of charge-offs. Meanwhile, Merck (MRK) has confirmed an agreement to resolve U.S. VIOXX product liability lawsuits. If certain conditions are met, the company will pay a fixed amount of $4.85 billion.
06:20 am : S&P futures vs fair value: -10.5. Nasdaq futures vs fair value: -18.8.
http://biz.yahoo.com/mu/update.html
4:25 pm : The weekend couldn't come soon enough for weary market participants who witnessed another tumultuous day of trading on Friday.
Bothered by both rumors and truths surrounding more write-downs for the financial sector and disappointing guidance from another large-cap technology company, the market took a dive in early action. At their lows of the morning, the Dow, Nasdaq and S&P were down 249, 71 and 26 points, respectively.
The tech sector led the retreat, falling as much as 3.0% in the wake of Qualcomm (QCOM 38.10, -1.66) providing earnings guidance for its fiscal first quarter and the fiscal year that was below consensus estimates due to lower handset demand. The indication reignited concerns, which were sparked on Thursday by Cisco's relatively disappointing second quarter outlook, that the tech stocks, and specifically the large-cap tech stocks, had gotten ahead of themselves.
The financial sector followed close behind, falling 2.6% at its worst levels. That decline was driven by an announcement from Wachovia (WB 40.65, +0.35) that its loan loss provision for the fourth quarter would be between $500 million and $600 million in excess of charge-offs. Additionally, Wachovia indicated that the value of its asset-backed CDOs had declined approximately $1.1 billion pre-tax in the month of October alone.
Wachovia's news was accompanied by a disappointing earnings report from Fannie Mae (FNM 49.00, -0.80) and rumors that Barclays (BCS 39.86, -1.48) was going to announce a $10 billion write-down. Barclays denounced the rumors as having no substance.
Strikingly, the financial sector made a spirited rally effort throughout the afternoon. At one point, the financial sector was up 2.4% for the session. The rally was forged in the face of subsequent warnings from JPMorgan Chase (JPM 42.31, -0.30) and Bank of America (BAC 43.98, +0.48) that potential write-downs would most likely pressure their fourth quarter results.
The turn in the financial sector helped the broader market pare its losses by a significant margin. However, the rally try was rudely interrupted by an aggressive wave of selling in the last half hour of trading that pushed the major indices back toward their worst levels for the day. The financial sector (+0.1%) ended the session basically flat.
The late selling, presumably, was driven by a growing sense of uneasiness in holding positions over the weekend as traders remained cognizant that the headline risk surrounding the financial sector remains high.
In any event, it seemed to be a fitting end to a week that was governed by a negative tone.
Dow component Merck (MRK 55.90, +1.13) managed to buck the broader selling trend as the company's announcement that it would be settling a significant portion of the Vioxx lawsuits for $4.85 billion was viewed by investors with a sense of relief.
Friday's economic data included a report on import prices that was higher than expected, a September trade deficit of $56.5 billion that was better than expected, and a preliminary reading on consumer sentiment for November from the University of Michigan that was measured at 75.0, the lowest level since October 2005.
On balance, the data didn't do much to help the stock market, which stayed preoccupied with the fallout in the financial and technology sectors, and the continued weakness in the dollar.
The Treasury market, once again, was a beneficiary of the stock market's struggle as it was bid higher in a flight-to-safety trade. The 10-year noted ended up 18 ticks, bringing its yield down to 4.21%. DJ30 -223.55 NASDAQ -68.06 SP500 -21.07 NASDAQ Dec/Adv/Vol 1988/1025/2.98 bln NYSE Dec/Adv/Vol 2397/885/1.83 bln
3:30 pm : Heading into the final half-hour of trading, the stock market is trading at its best levels of the session. While none of the major indices have made it to positive territory, they have staged an impressive comeback that has pared the majority of their intraday losses.
Five of the major sectors are in positive territory, with the financials (+2.4%) providing leadership.
Overall, this has been a rough week for the stock market, with the S&P 500 finishing lower three of the four previous trading days. The Nasdaq Composite, meanwhile, is down roughly 5% for the week at current levels.DJ30 -83.98 NASDAQ -28.99 SP500 -2.82 NASDAQ Dec/Adv/Vol 1889/1092/2.36 bln NYSE Dec/Adv/Vol 2221/1056/1.36 mln
3:00 pm : The stock market continues to trade near its best levels of the session following a late day surge in buying interest, but remains in the red. Strikingly, like yesterday, the financial sector (+1.9%) is spearheading the late day rally. The reversal of the financial sector is especially impressive considering it has rallied 4.5% from its intraday low.
The Dow, Nasdaq, and S&P 500 have pared 153, 35 and 22 points, respectively from their session lows.DJ30 -115.03 NASDAQ -40.05 SP500 -6.52 NASDAQ Dec/Adv/Vol 1815/1154/2.18 mln NYSE Dec/Adv/Vol 2200/1077/1.25 bln
2:30 pm : An increase in buying interest has pushed the major indices to their best levels of the session since the opening plunge. The S&P 500 is now down only 4 points, which is especially impressive considering it was down 26 points at its lowest level of the session.
Buying interest is broad-based, but the influential financial sector (+1.3%) is playing a large role as it springs into leadership.
Of note, Wachovia (WB 40.76, +0.46), which caused the sell-off of financials this morning, has made it back to positive territory.DJ30 -90.72 NASDAQ -33.14 SP500 -4.42 NASDAQ Dec/Adv/Vol 2019/951/1.97 bln NYSE Dec/Adv/Vol 2415/848/1.11 bln
2:05 pm : The stock market is heading mostly sideways as investors continue to show apprehension.
22 of the 30 dow components are in the red. IBM (IBM 100.27, -5.84) and 3M (MMM 79.59, -3.24) are the main laggards. Merck (MRK 56.99, +2.22) and AIG (AIG 56.59, +0.59) are providing leadership.
Decliners outpace advancers at the Nasdaq by more than a 2-to-1 margin and at the NYSE by more than a 3-to-1 margin.DJ30 -161.12 NASDAQ -57.84 SP500 -14.74 NASDAQ Dec/Adv/Vol 2070/881/1.83 bln NYSE Dec/Adv/Vol 2485/766/1.04 bln
1:35 pm : There has been a lack of concerted buying and selling interest over the past hour as the indices have been range bound.
European markets finished lower as investors continued to dump banking shares on persistent credit worries.DJ30 -153.40 NASDAQ -51.00 SP500 -12.48 NASDAQ Dec/Adv/Vol 2114/802/1.68 bln NYSE Dec/Adv/Vol 2524/714/955 mln
12:55 pm : The financial sector (+0.2%) is back on the rise. While the major indices still have a long way to go to make it back into the green, the recovery thus far has been decent considering earlier in the trading session the indices slipped below yesterday's lows.
The financial sector is getting support from regional banks (+1.6%) and property & casualty insurers (+2.2%). Meanwhile, Barclays (BCS 40.16, -1.18) CEO said in a memo to employees he would have made an announcement if rumors were true.
The Amex Airline Index is down 3.4%. The index has struggled, as it is down over 30% year-to-date.DJ30 -153.56 NASDAQ -51.54 SP500 -13.22 NASDAQ Dec/Adv/Vol 1995/896/1.52 bln NYSE Dec/Adv/Vol 2486/744/840 mln
12:30 pm : Buying efforts have faded, as the financial sector (-0.1%) slips back into the red. The tech sector (-2.8%) is struggling today, but eBay (EBAY 33.08, +0.68) is bucking the negative trend.
Piper Jaffray upgraded eBay to Outperform from Market Perform and set a price target of $43. Piper believes eBay's shares are attractive following its 20% decline since reporting earnings and that listings are back-on-track for the fourth quarter. Piper also believes new initiatives, including improved search and navigation, will improve the buying experience and improve conversion rates in 2008. DJ30 -161.93 NASDAQ -56.68 SP500 -15.01 NASDAQ Dec/Adv/Vol 2073/795/1.38 bln NYSE Dec/Adv/Vol 2552/672/764 mln
12:00 pm : The stock market was unable to maintain momentum from yesterday's late-day rally as the major indices opened deep in the red. The stock market has pared a good portion of its intraday losses at the East Coast lunch hour, aided by a swift turnaround in the financial sector (+0.4%) The financial and tech (-2.5%) sectors are once again topping the headlines.
The Financial sector, which Briefing.com has held at an underweight rating since April, is trading in a volatile manner following reports of write-downs at major financial institutions. Today Wachovia (WB 39.60, -0.70) and Barclays (BCS 39.91, -1.43) have been thrown in the spotlight.
In the case of Barclays, there was a nasty rumor that it was on the verge of announcing a $10 billion write-down related to losses on mortgage-backed securities. Follow-up press reports indicate, however, that Barclays has said there is no substance to that rumor. In refuting the rumor, it would have been more comforting if Barclays said it won't be taking any write-downs. It's just denying that it won't be announcing a $10 billion write-down.
Wachovia, on the other hand, announced in an 8-K filing that it suffered further declines in the value of its asset-backed collateralized debt obligations to the tune of approximately $1.1 billion pre-tax in the month of October alone. It added that its loan loss provisions for the fourth quarter are estimated to be between $500 million and $600 million in excess of charge-offs for the quarter. This announcement is driving concerns about the consumer.
Meanwhile, the tech sector is under pressure following Qualcomm's (QCOM 38.41, -1.35) earnings report. Qualcomm exceeded analysts' expectations for the fiscal fourth quarter, but the San Diego-based company provided a bleak outlook for the current year due to lower handset demand and higher litigation expenses. Tech fell nearly 4% yesterday following a disappointing outlook from Cisco (CSCO 28.62, -1.01).
Risk aversion is evident in the market today. The defensive healthcare (+0.6%), telecom (+0.4%), utilities (-0.2%) and consumer staples (-0.3%) sectors are outperforming on a relative basis. Meanwhile, the 10-year note has rallied, pushing its yield down to 4.22%.
On the economic front, the preliminary University of Michigan Consumer Sentiment Index slipped to 75.0, its lowest level since October of 2005. Economists expected a reading of 80.0.
The Commerce Dept. reports that the U.S. trade deficit narrowed in September to $56.5 billion, from a revised reading of $56.8 billion in August. Economists expected a deficit of $58.5 billion.
The stock market's reaction to both economic releases was relatively muted. DJ30 -128.44 NASDAQ -52.19 SP500 -12.60 NASDAQ Dec/Adv/Vol 2118/714/1.22 bln NYSE Dec/Adv/Vol 2623/550/632 mln
11:30 am : Since the last update, the stock market hit a fresh intraday low, but has since recovered as financials (-0.9%) once again bounce off its session lows. The major indices, though, are still posting losses of at least 1.0%.
As stocks decline, there is a pick up of buying interest in bonds, pushing the 10-year note yield down to 4.2%.DJ30 -180.63 NASDAQ -61.45 SP500 -17.13 NASDAQ Dec/Adv/Vol 2191/592/1.02 bln NYSE Dec/Adv/Vol 2637/500/527 mln
11:00 am : The stock market has been unable to maintain momentum as it slips toward its intraday lows. Crude oil is now up 0.8% to $96.20.
Reuters reports that Lehman Brothers' (LEH 55.27, -0.84) Chief Global Bond Strategist sees the "deepest correction" ever in structured finance and the current market is in "recession-risk denial". The Chief Bond Strategist also expressed the opinion that the U.S. credit crisis is now worse than the one caused by Long-Term Capital Management.
Long-Term Capital Management was a hedge fund that had massive losses in 1998. It is said to have nearly brought down the financial system due to its extreme leveraging. DJ30 -169.08 NASDAQ -59.27 SP500 -18.17 NASDAQ Dec/Adv/Vol 1994/708/765 mln NYSE Dec/Adv/Vol 2498/562/372 mln
10:30 am : The major indices have recovered off their lows, despite a worse-than-expected economic report. The indices are still in the red, but have pared a good portion of their intraday losses due to a broad-based pickup in buying interest led by the financial sector (-0.6%). The telecom (+0.5%) and healthcare (+0.1%) sectors are now in the green.
Reported at 10:00 ET, the preliminary University of Michigan Consumer Sentiment Index slipped to 75.0, its lowest level since October of 2005. Economists expected a reading of 80.0.DJ30 -123.56 NASDAQ -43.06 SP500 -12.83 NASDAQ Dec/Adv/Vol 2087/539/506 mln NYSE Dec/Adv/Vol 2661/312/193 mln
10:00 am : The main laggards are the financial (-2.5%) and tech (-2.4%) sectors, which are a significant drag on the broader market. The sectors combined make up more than 30% of the S&P's market capitalization. There is a lack of strength in all sectors, as all ten are in negative territory.
In corporate news this morning, Merck & Co. (MRK 56.54, +1.77) has agreed to pay $4.85 billion to resolve claims of strokes and heart attacks related to its withdrawn painkiller Vioxx. Although the drug maker has successfully defended itself against a barrage of lawsuits, the agreement could put the uncertainty of possible settlements behind the company and allow it to focus on its business operations. Investors welcomed the news, sending shares more than 3% higher in early-trading. DJ30 -168.52 NASDAQ -56.64 SP500 -21.99
09:40 am : The equity market is on the defensive following disappointing developments in the two most influential sectors in terms of their weighting.
The financial sector is under pressure after Wachovia (WB) announced that its CDOs dropped in value by $1.1 billion and that it increased provisions for loan losses in the fourth quarter by $500 million. There were also rumors that London based Barclays (BCS) is getting ready to announce a write-down of as much as $10 billion. According to Dow Jones, Barclays said there was no substance to those rumors.
The tech sector, which declined nearly 4.0% yesterday, is again out of favor following disappointing guidance from Qualcomm (QCOM). DJ30 -165.59 NASDAQ -62.84 SP500 -22.87
09:14 am : S&P futures vs fair value: -17.2. Nasdaq futures vs fair value: -42.5.
09:00 am : S&P futures vs fair value: -18.1. Nasdaq futures vs fair value: -41.0. Futures trade indicates that is going to be another tough day for large-cap tech stocks.
08:34 am : S&P futures vs fair value: -19.5. Nasdaq futures vs fair value: -37.0. Just hitting the wires, the Commerce Dept. reports that the U.S. trade deficit narrowed in September to $56.5 bln, from a downwardly revised reading of $56.8 bln in August. Economists expected a deficit of $58.5 billion. Futures reaction is limited.
08:00 am : S&P futures vs fair value: -18.0. Nasdaq futures vs fair value: -31.5. Early indications suggest a decidedly lower open. The catalysts for the negative bias include disappointing guidance from Qualcomm (QCOM) and news from Wachovia (WB) that it saw a $1.1 billion decline in the value of its collateralized debt obligations and expects to increase its provision for loan losses in the fourth quarter by $500 million to $600 million in excess of charge-offs. Meanwhile, Merck (MRK) has confirmed an agreement to resolve U.S. VIOXX product liability lawsuits. If certain conditions are met, the company will pay a fixed amount of $4.85 billion.
06:20 am : S&P futures vs fair value: -10.5. Nasdaq futures vs fair value: -18.8.
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