AI
Monday, November 19, 2007 9:31:40 PM
Market Update 071119
http://biz.yahoo.com/mu/update.html
4:25 pm : Stock market bulls didn't have much to give thanks for in Monday's session as the major indices suffered another noticeable loss on the back of a weak financial sector (-3.0%).
Goldman Sachs played the spoiler today with a downgrade of Citigroup (C 32.00, -2.00) from Neutral to Sell. That call was highlighted by a contention that Citigroup could write-off as much as $15 billion for debt losses over the next two quarters. It also included price cut estimates for a number of other financial stocks.
The timing of the Citigroup downgrade to Sell (i.e., with Citigroup already down 30% from its October high), and a warning from reinsurer Swiss Re that it lost nearly $1.1 billion on two credit default swaps, played on investors' concerns that it is premature to think the financial sector has hit bottom.
In a somewhat ironic twist, Citigroup on Friday raised its rating on the U.S. banking sector to Overweight from Market Weight citing, among other things, awful investor sentiment.
Well, the awful investor sentiment shone through again on Monday and not just toward the financial sector. The consumer discretionary sector (-2.4%) continued to get hit hard with homebuilders and retailers bearing the brunt of the selling blows. Concerns surrounding General Motors' (GM 26.79, -2.48) exposure to GMAC also weighed heavily on the sector.
Weakness in the homebuilding stocks coincided with another lousy report on housing conditions. Specifically, the National Association of Home Builders confidence index showed a reading of 19 for November that marked the lowest level since the number started being tracked in 1985.
On a related note, home improvement retailer Lowe's (LOW 23.12, -1.89) didn't help matters when it reported disappointing third quarter results before the open and issued an earnings warning for the fourth quarter. Lowe's news set the tone for the retail sector (-3.0%) which started lower and extended its losses as the session progressed.
Other issues weighing on sentiment Monday included a stronger yen that was interpreted as a sign carry trades were being unwound as investors maintained a risk-averse nature.
The risk aversion was readily apparent in the Treasury market which rallied as the stock market dropped. The 10-year note jumped 24 ticks and its yield fell 10 basis points to 4.07%. Meanwhile, the yield on the 2-year note dropped 18 basis points to 3.16% as slowdown concerns and the action in the financial sector fueled expectations that the Fed will cut interest rates again.
Reports that Chinese regulators have ordered commercial banks to freeze lending through the end of the year in a bid to keep China's economy from overheating added to the slowdown concerns.
The only sector to record a gain on Monday was the utilities sector (+0.2%), which benefited from the drop in interest rates and its defensive nature. Similarly, other defensive-oriented groups, such as consumer staples (-0.7%) and health care (-1.0%), fared better than the broader market.
The major indices ended the day near their worst levels of the session. The S&P 500 is now up just 1.1% for the year.DJ30 -218.35 NASDAQ -43.86 NQ100 -1.3% R2K -2.5% SP400 -1.9% SP500 -25.47 NASDAQ Dec/Adv/Vol 2435/598/2.17 bln NYSE Dec/Adv/Vol 2749/565/1.65 bln
3:30 pm : The major indices are trading in a choppy manner modestly above their worst levels of the session. There are notable pockets of weakness in the Amex Airline Index (-4.9%) and the S&P 500 Retailing Index (-2.6%).
Tomorrow, the Department of Commerce will release the housing starts reading for October at 8:30 ET. Briefing.com expects housing starts to edge less than 1% higher to 1.20 million after the severe 19% dive over the prior three months. The consensus goes with a continued decline to 1.175 million (-1.3%).
The Oct. 31 FOMC meeting minutes will be released at 14:00 ET. Investors hope the minutes will clarify the Fed's recent decision to cut the fed funds and discount rates by 25 basis points on Oct. 31. Additionally, the minutes may hint at future Fed actions.DJ30 -175.75 NASDAQ -32.65 SP500 -19.99 NASDAQ Dec/Adv/Vol 2416/600/1.73 bln NYSE Dec/Adv/Vol 2734/566/1.22 bln
3:00 pm : Buying efforts have faded as the major indices are again on the retreat. The indices are still well off their lows for the day, though. The small-cap Russell 2000 Index is again underperforming, as it has year-to-date.
In regard to commodities, the CRB Index is down 0.6%. All of its groups are in the red, with the industrials (-2.1%) showing the most weakness DJ30 -180.87 NASDAQ -35.57 R2K -2.2% SP500 -20.98 NASDAQ Dec/Adv/Vol 2341/625/1.55 bln NYSE Dec/Adv/Vol 2703/576/1.08 bln
2:30 pm : The stock market is boosted off its lows following a broad-based pickup in buying interest. The major indices are still posting substantial losses, but the Dow has managed to shave roughly 50 points off its intraday low. There was not a specific news item to account for the recent gains.
Meanwhile, crude oil is back on the rise. Crude oil for January delivery is up 0.9% to $94.63 per barrel.DJ30 -151.12 NASDAQ -33.00 SP500 -18.54 NASDAQ Dec/Adv/Vol 2395/562/1.41 bln NYSE Dec/Adv/Vol 2785/473/992 mln
2:00 pm : The major indices are trading near their intraday lows. Market internals continue to paint an uphill battle for the bulls. As reflected in the A/D line, decliners outpace advancers on the NYSE by more than a 5.5-to-1 margin while those on the Nasdaq hold a 4.5-to-1 edge. Meanwhile, bonds have been boosted further as stocks slump and the market expects the Fed to be pushed into a corner, yet again, in order to avoid recession.
Only five of the 30 Dow Jones components are in the green, with the defensive oriented McDonald's (MCD 58.66, +0.53) and Altria (MO 74.08, +0.90) providing leadership. Citigroup (C 32.13, -1.87) and Caterpillar (CAT 67.61, -1.83) are the main laggards.DJ30 -218.26 NASDAQ -52.81 SP500 -28.01 NASDAQ Dec/Adv/Vol 2400/526/1.27 mln NYSE Dec/Adv/Vol 2755/485/895 mln
1:30 pm : Stocks extend their losses following another negative housing report. The S&P 500 is currently 1.7% above its Aug. 16 low of 1406.70, which is considered a key area of support by technical analysts.
As expected, the National Association of Homebuilders (NAHB) index of builder confidence in November came in at 19, which matches October's revised reading. The reading marks the lowest point since the index was created in 1985. The NAHB cited "mortgage market problems, a substantial inventory overhang and ongoing concerns about the effects of negative media coverage" as the main reasons for the low number. DJ30 -187.54 NASDAQ -42.80 SP500 -23.76 NASDAQ Dec/Adv/Vol 2399/517/1.15 bln NYSE Dec/Adv/Vol 2746/473/809 mln
1:05 pm : The stock market falls to its worst levels of the session following choppy action. At current levels, the S&P 500 is showing a slight loss year-to-date.
The weakness in equities has spurred a flight-to-quality to Treasuries. The 10-year note is currently up 17 ticks to yield 4.10%. DJ30 -178.68 NASDAQ -39.99 SP500 -22.27 NASDAQ Dec/Adv/Vol 2298/570/1.04 bln NYSE Dec/Adv/Vol 2687/525/723 mln
12:35 pm : Stocks are trading in a choppy manner as the financial sector (-2.6%) pares a portion of its intraday losses. Losses are still substantial.
Satellite television provider EchoStar Communications (DISH 49.02, 9.19) is bucking this session's downward trend. Shares of EchoStar spiked after Citigroup upgraded the company to Buy from Neutral and maintains its $52 target based on attractive valuation. The firm believes that there's a 65% chance that AT&T (T 37.73, -1.86) acquires EchoStar over the next 12 months. The telecom sector (-3.4%) is now the main laggard, the weakness in AT&T is acting as a major drag.
Xerox (XRX 16.10, +0.28) is also trading higher, following reports that the company has declared its first dividend since 2001. DJ30 -161.12 NASDAQ -33.65 SP500 -20.41 NASDAQ Dec/Adv/Vol 2296/550/950 mln NYSE Dec/Adv/Vol 2669/542/668 mln
12:00 pm : The stock market has had a bearish bias throughout the session, as financials continue to be an area of concern for investors. The major indices are off their intraday lows at the East Coast lunch hour, but are still posting substantial losses.
Goldman Sachs downgrading of Citigroup (C 32.28, -1.72) to Sell from Neutral sparked the selling interest. According to Reuters, Goldman said Citigroup may have to write off as much as $15 billion for debt losses over the next two quarters. Citigroup has already indicated that it expects to write-down $8 billion to $11 billion in the fourth quarter.
Goldman also cut its price estimate on a number of brokers. Briefing.com, for its part, has held an Underweight rating on the financial sector since April.
Home improvement retailer Lowe's (LOW 23.43, -1.58) added to the negative bias after the company issued a fourth quarter earnings warning this morning. Around 10:30 ET, the stock fell further when Reuters Estimates revised its comparable of Lowe's to $0.38 per share, which showed that Lowe's missed its third quarter earnings estimate by three cents a share. Reuters Estimates originally told Briefing.com that Lowe's earnings of $0.41 per share was comparable, indicating that the company topped earnings expectations.
In merger and acquisition news, Celgene Corp. (CELG 64.74, -0.16) has agreed to acquire Pharmion Corp. (PHRM 66.73, +17.44) for approximately $2.9 billion in cash and stock in a deal that expands the Summit, N.J.-based biotechnology firm's position in the hematology and oncology fields. Under the agreement, Celgene will pay $72 per share for Pharmion, which represents a 46% premium over the company's closing price on Friday.
There is a lack of leadership in the stock market, as only the lightly weighted utilities sector (+0.2%) is in the green. The Citigroup downgrade is weighing on the financial sector (-2.8%), which is the main laggard. The telecom sector (-2.7%) is also showing weakness. DJ30 -173.07 NASDAQ -40.06 SP500 -22.33 NASDAQ Dec/Adv/Vol 2272/536/806 mln NYSE Dec/Adv/Vol 2667/504/564 mln
11:30 am : A recovery effort was short-lived as the major indices head back toward their intrady lows. There is a lack of leadership in the stock market. Only the utilities sector (+0.2%), which has a mere 3.4% S&P 500 weighting, is in the green.
Meanwhile, Treasury Secretary Henry Paulson says the U.S. economy will continue to grow despite normal ups and downs. Paulson also says inflation is "relatively contained" despite higher energy prices. DJ30 -175.54 NASDAQ -41.24 SP500 -22.53 NASDAQ Dec/Adv/Vol 2266/529/674 NYSE Dec/Adv/Vol 2602/511/438 mln
11:05 am : Equities continue to be on the defensive as the major indices slide to fresh intraday lows. The financial sector faces more selling pressure.
Reuters Estimates originally told Briefing.com that Lowe’s (LOW 23.26, -1.75) earnings of $0.43 is comparable to their consensus of $0.41. Now, Reuters Estimates is telling us that they have revised their comparable actual of Lowe's to $0.38, excluding the gain from the reduction in self-insurance liabilities of $0.05. This means the company actually missed the Reuters consensus estimate by $0.03. Shares of Lowe's are nearing their 2004 low of 22.95.
After being up roughly 1%, crude oil futures have reversed and are now down 0.4% to $93.47 per barrel. The contract is now for January delivery, as the December contract expired last Friday.
DJ30 -154.70 NASDAQ -32.09 SP500 -20.29 NASDAQ Dec/Adv/Vol 2136/578/500 mln NYSE Dec/Adv/Vol 2521/523/318 mln
10:35 am : The major indices extend their losses as they follow the heavily-weighted financial sector (-2.8%) lower. All of the sector's industry groups are in the red.
Selling pressure continues to be broad-based in the early-going, as only the office electronics group (+2.4%) is posting a gain greater than 1%.
In merger and acquisition news, Celgene Corp. (CELG 65.10, +0.19) has agreed to acquire Pharmion Corp. (PHRM 67.39, +18.11) for approximately $2.9 billion in cash and stock in a deal that expands the Summit, N.J.-based biotechnology firm's position in the hematology and oncology fields. Under the agreement, Celgene will pay $72 per share for Pharmion, which represents a 46% premium over the company's closing price on Friday. DJ30 -118.60 NASDAQ -22.05 SP500 -15.07 NASDAQ Dec/Adv/Vol 2013/622/346 mln NYSE Dec/Adv/Vol 2432/514/212 mln
10:00 am : The major indices have pared a portion of their opening losses, but remain in the red. At current levels, the Dow and S&P have given up all of last Friday's gains and then some, while the Nasdaq has given up the majority of its gains.
Selling pressure is broad-based with nine of the ten major economic sectors in the red. The downgrade of Citigroup (C) has pushed the financial sector (-1.7%) into the main laggard position. The materials sector (-1.6%) is also showing weakness.
The utilities sector (+0.1%) is outperforming on a relative basis.
Despite the weakness in equities, the Treasury market is flat.DJ30 -80.64 NASDAQ -15.69 SP500 -11.17
09:40 am : As futures indicated, the major indices open on a lower note following a number of negative reports.
Citigroup (C) is again making headlines after being downgraded to Sell from Neutral at Goldman Sachs (GS). Goldman also cut its price estimate on a number of brokers, including Merrill Lynch (MER), Morgan Stanley (MS), Lehman Brothers (LEH), Bear Stearns (BSC), JPMorgan (JPM) and E*Trade (ETFC).
Meanwhile, home improvement retailer Lowe's (LOW) reported earnings that topped expectations, but issued a fourth quarter earnings warning. DJ30 -84.22 NASDAQ -18.20 SP500 -10.50
09:15 am : S&P futures vs fair value: -9.7. Nasdaq futures vs fair value: -10.5.
09:00 am : S&P futures vs fair value: -10.1. Nasdaq futures vs fair value: -10.8. The futures market has pared some of its losses, but still points to a lower open. The economic calendar is empty today.
08:30 am : S&P futures vs fair value: -10.5. Nasdaq futures vs fair value: -13.5. Early sentiment weakens as Deutsche Bank cuts its target on eBay (EBAY) to $30 from $33. Meanwhile, crude oil for January delivery is up 0.9% to $94.65.
08:00 am : S&P futures vs fair value: -8.5. Nasdaq futures vs fair value: -9.3. Futures point to a lower open. A fourth quarter earnings warning from home improvement retailer Lowe's (LOW), Goldman Sachs downgrading Citigroup (C) to sell from neutral, and concerns about an unwinding of the yen carry trade are among the main influences this morning that have driven the bearish bias. Also, there is a Wall Street Journal report that says Chinese regulators have quietly ordered China's commercial banks to freeze lending through the end of the year. In M&A news, Celgene (CELG) is going to acquire Pharmion (PHRM) for $2.9 billion, SABMiller has offered $1.2 billion to acquire Grolsch, and TomTom has reportedly offered $4.2 billion for TeleAtlas.
06:18 am : S&P futures vs fair value: -8.8. Nasdaq futures vs fair value: -9.5.
06:17 am : FTSE...6250.90...-40.30...-0.6%. DAX...7583.36...-28.90...-0.4%.
06:17 am : Nikkei...15042.56...-112.05...-0.7%. Hang Seng...27460.17...-154.26...-0.6%.
http://biz.yahoo.com/mu/update.html
4:25 pm : Stock market bulls didn't have much to give thanks for in Monday's session as the major indices suffered another noticeable loss on the back of a weak financial sector (-3.0%).
Goldman Sachs played the spoiler today with a downgrade of Citigroup (C 32.00, -2.00) from Neutral to Sell. That call was highlighted by a contention that Citigroup could write-off as much as $15 billion for debt losses over the next two quarters. It also included price cut estimates for a number of other financial stocks.
The timing of the Citigroup downgrade to Sell (i.e., with Citigroup already down 30% from its October high), and a warning from reinsurer Swiss Re that it lost nearly $1.1 billion on two credit default swaps, played on investors' concerns that it is premature to think the financial sector has hit bottom.
In a somewhat ironic twist, Citigroup on Friday raised its rating on the U.S. banking sector to Overweight from Market Weight citing, among other things, awful investor sentiment.
Well, the awful investor sentiment shone through again on Monday and not just toward the financial sector. The consumer discretionary sector (-2.4%) continued to get hit hard with homebuilders and retailers bearing the brunt of the selling blows. Concerns surrounding General Motors' (GM 26.79, -2.48) exposure to GMAC also weighed heavily on the sector.
Weakness in the homebuilding stocks coincided with another lousy report on housing conditions. Specifically, the National Association of Home Builders confidence index showed a reading of 19 for November that marked the lowest level since the number started being tracked in 1985.
On a related note, home improvement retailer Lowe's (LOW 23.12, -1.89) didn't help matters when it reported disappointing third quarter results before the open and issued an earnings warning for the fourth quarter. Lowe's news set the tone for the retail sector (-3.0%) which started lower and extended its losses as the session progressed.
Other issues weighing on sentiment Monday included a stronger yen that was interpreted as a sign carry trades were being unwound as investors maintained a risk-averse nature.
The risk aversion was readily apparent in the Treasury market which rallied as the stock market dropped. The 10-year note jumped 24 ticks and its yield fell 10 basis points to 4.07%. Meanwhile, the yield on the 2-year note dropped 18 basis points to 3.16% as slowdown concerns and the action in the financial sector fueled expectations that the Fed will cut interest rates again.
Reports that Chinese regulators have ordered commercial banks to freeze lending through the end of the year in a bid to keep China's economy from overheating added to the slowdown concerns.
The only sector to record a gain on Monday was the utilities sector (+0.2%), which benefited from the drop in interest rates and its defensive nature. Similarly, other defensive-oriented groups, such as consumer staples (-0.7%) and health care (-1.0%), fared better than the broader market.
The major indices ended the day near their worst levels of the session. The S&P 500 is now up just 1.1% for the year.DJ30 -218.35 NASDAQ -43.86 NQ100 -1.3% R2K -2.5% SP400 -1.9% SP500 -25.47 NASDAQ Dec/Adv/Vol 2435/598/2.17 bln NYSE Dec/Adv/Vol 2749/565/1.65 bln
3:30 pm : The major indices are trading in a choppy manner modestly above their worst levels of the session. There are notable pockets of weakness in the Amex Airline Index (-4.9%) and the S&P 500 Retailing Index (-2.6%).
Tomorrow, the Department of Commerce will release the housing starts reading for October at 8:30 ET. Briefing.com expects housing starts to edge less than 1% higher to 1.20 million after the severe 19% dive over the prior three months. The consensus goes with a continued decline to 1.175 million (-1.3%).
The Oct. 31 FOMC meeting minutes will be released at 14:00 ET. Investors hope the minutes will clarify the Fed's recent decision to cut the fed funds and discount rates by 25 basis points on Oct. 31. Additionally, the minutes may hint at future Fed actions.DJ30 -175.75 NASDAQ -32.65 SP500 -19.99 NASDAQ Dec/Adv/Vol 2416/600/1.73 bln NYSE Dec/Adv/Vol 2734/566/1.22 bln
3:00 pm : Buying efforts have faded as the major indices are again on the retreat. The indices are still well off their lows for the day, though. The small-cap Russell 2000 Index is again underperforming, as it has year-to-date.
In regard to commodities, the CRB Index is down 0.6%. All of its groups are in the red, with the industrials (-2.1%) showing the most weakness DJ30 -180.87 NASDAQ -35.57 R2K -2.2% SP500 -20.98 NASDAQ Dec/Adv/Vol 2341/625/1.55 bln NYSE Dec/Adv/Vol 2703/576/1.08 bln
2:30 pm : The stock market is boosted off its lows following a broad-based pickup in buying interest. The major indices are still posting substantial losses, but the Dow has managed to shave roughly 50 points off its intraday low. There was not a specific news item to account for the recent gains.
Meanwhile, crude oil is back on the rise. Crude oil for January delivery is up 0.9% to $94.63 per barrel.DJ30 -151.12 NASDAQ -33.00 SP500 -18.54 NASDAQ Dec/Adv/Vol 2395/562/1.41 bln NYSE Dec/Adv/Vol 2785/473/992 mln
2:00 pm : The major indices are trading near their intraday lows. Market internals continue to paint an uphill battle for the bulls. As reflected in the A/D line, decliners outpace advancers on the NYSE by more than a 5.5-to-1 margin while those on the Nasdaq hold a 4.5-to-1 edge. Meanwhile, bonds have been boosted further as stocks slump and the market expects the Fed to be pushed into a corner, yet again, in order to avoid recession.
Only five of the 30 Dow Jones components are in the green, with the defensive oriented McDonald's (MCD 58.66, +0.53) and Altria (MO 74.08, +0.90) providing leadership. Citigroup (C 32.13, -1.87) and Caterpillar (CAT 67.61, -1.83) are the main laggards.DJ30 -218.26 NASDAQ -52.81 SP500 -28.01 NASDAQ Dec/Adv/Vol 2400/526/1.27 mln NYSE Dec/Adv/Vol 2755/485/895 mln
1:30 pm : Stocks extend their losses following another negative housing report. The S&P 500 is currently 1.7% above its Aug. 16 low of 1406.70, which is considered a key area of support by technical analysts.
As expected, the National Association of Homebuilders (NAHB) index of builder confidence in November came in at 19, which matches October's revised reading. The reading marks the lowest point since the index was created in 1985. The NAHB cited "mortgage market problems, a substantial inventory overhang and ongoing concerns about the effects of negative media coverage" as the main reasons for the low number. DJ30 -187.54 NASDAQ -42.80 SP500 -23.76 NASDAQ Dec/Adv/Vol 2399/517/1.15 bln NYSE Dec/Adv/Vol 2746/473/809 mln
1:05 pm : The stock market falls to its worst levels of the session following choppy action. At current levels, the S&P 500 is showing a slight loss year-to-date.
The weakness in equities has spurred a flight-to-quality to Treasuries. The 10-year note is currently up 17 ticks to yield 4.10%. DJ30 -178.68 NASDAQ -39.99 SP500 -22.27 NASDAQ Dec/Adv/Vol 2298/570/1.04 bln NYSE Dec/Adv/Vol 2687/525/723 mln
12:35 pm : Stocks are trading in a choppy manner as the financial sector (-2.6%) pares a portion of its intraday losses. Losses are still substantial.
Satellite television provider EchoStar Communications (DISH 49.02, 9.19) is bucking this session's downward trend. Shares of EchoStar spiked after Citigroup upgraded the company to Buy from Neutral and maintains its $52 target based on attractive valuation. The firm believes that there's a 65% chance that AT&T (T 37.73, -1.86) acquires EchoStar over the next 12 months. The telecom sector (-3.4%) is now the main laggard, the weakness in AT&T is acting as a major drag.
Xerox (XRX 16.10, +0.28) is also trading higher, following reports that the company has declared its first dividend since 2001. DJ30 -161.12 NASDAQ -33.65 SP500 -20.41 NASDAQ Dec/Adv/Vol 2296/550/950 mln NYSE Dec/Adv/Vol 2669/542/668 mln
12:00 pm : The stock market has had a bearish bias throughout the session, as financials continue to be an area of concern for investors. The major indices are off their intraday lows at the East Coast lunch hour, but are still posting substantial losses.
Goldman Sachs downgrading of Citigroup (C 32.28, -1.72) to Sell from Neutral sparked the selling interest. According to Reuters, Goldman said Citigroup may have to write off as much as $15 billion for debt losses over the next two quarters. Citigroup has already indicated that it expects to write-down $8 billion to $11 billion in the fourth quarter.
Goldman also cut its price estimate on a number of brokers. Briefing.com, for its part, has held an Underweight rating on the financial sector since April.
Home improvement retailer Lowe's (LOW 23.43, -1.58) added to the negative bias after the company issued a fourth quarter earnings warning this morning. Around 10:30 ET, the stock fell further when Reuters Estimates revised its comparable of Lowe's to $0.38 per share, which showed that Lowe's missed its third quarter earnings estimate by three cents a share. Reuters Estimates originally told Briefing.com that Lowe's earnings of $0.41 per share was comparable, indicating that the company topped earnings expectations.
In merger and acquisition news, Celgene Corp. (CELG 64.74, -0.16) has agreed to acquire Pharmion Corp. (PHRM 66.73, +17.44) for approximately $2.9 billion in cash and stock in a deal that expands the Summit, N.J.-based biotechnology firm's position in the hematology and oncology fields. Under the agreement, Celgene will pay $72 per share for Pharmion, which represents a 46% premium over the company's closing price on Friday.
There is a lack of leadership in the stock market, as only the lightly weighted utilities sector (+0.2%) is in the green. The Citigroup downgrade is weighing on the financial sector (-2.8%), which is the main laggard. The telecom sector (-2.7%) is also showing weakness. DJ30 -173.07 NASDAQ -40.06 SP500 -22.33 NASDAQ Dec/Adv/Vol 2272/536/806 mln NYSE Dec/Adv/Vol 2667/504/564 mln
11:30 am : A recovery effort was short-lived as the major indices head back toward their intrady lows. There is a lack of leadership in the stock market. Only the utilities sector (+0.2%), which has a mere 3.4% S&P 500 weighting, is in the green.
Meanwhile, Treasury Secretary Henry Paulson says the U.S. economy will continue to grow despite normal ups and downs. Paulson also says inflation is "relatively contained" despite higher energy prices. DJ30 -175.54 NASDAQ -41.24 SP500 -22.53 NASDAQ Dec/Adv/Vol 2266/529/674 NYSE Dec/Adv/Vol 2602/511/438 mln
11:05 am : Equities continue to be on the defensive as the major indices slide to fresh intraday lows. The financial sector faces more selling pressure.
Reuters Estimates originally told Briefing.com that Lowe’s (LOW 23.26, -1.75) earnings of $0.43 is comparable to their consensus of $0.41. Now, Reuters Estimates is telling us that they have revised their comparable actual of Lowe's to $0.38, excluding the gain from the reduction in self-insurance liabilities of $0.05. This means the company actually missed the Reuters consensus estimate by $0.03. Shares of Lowe's are nearing their 2004 low of 22.95.
After being up roughly 1%, crude oil futures have reversed and are now down 0.4% to $93.47 per barrel. The contract is now for January delivery, as the December contract expired last Friday.
DJ30 -154.70 NASDAQ -32.09 SP500 -20.29 NASDAQ Dec/Adv/Vol 2136/578/500 mln NYSE Dec/Adv/Vol 2521/523/318 mln
10:35 am : The major indices extend their losses as they follow the heavily-weighted financial sector (-2.8%) lower. All of the sector's industry groups are in the red.
Selling pressure continues to be broad-based in the early-going, as only the office electronics group (+2.4%) is posting a gain greater than 1%.
In merger and acquisition news, Celgene Corp. (CELG 65.10, +0.19) has agreed to acquire Pharmion Corp. (PHRM 67.39, +18.11) for approximately $2.9 billion in cash and stock in a deal that expands the Summit, N.J.-based biotechnology firm's position in the hematology and oncology fields. Under the agreement, Celgene will pay $72 per share for Pharmion, which represents a 46% premium over the company's closing price on Friday. DJ30 -118.60 NASDAQ -22.05 SP500 -15.07 NASDAQ Dec/Adv/Vol 2013/622/346 mln NYSE Dec/Adv/Vol 2432/514/212 mln
10:00 am : The major indices have pared a portion of their opening losses, but remain in the red. At current levels, the Dow and S&P have given up all of last Friday's gains and then some, while the Nasdaq has given up the majority of its gains.
Selling pressure is broad-based with nine of the ten major economic sectors in the red. The downgrade of Citigroup (C) has pushed the financial sector (-1.7%) into the main laggard position. The materials sector (-1.6%) is also showing weakness.
The utilities sector (+0.1%) is outperforming on a relative basis.
Despite the weakness in equities, the Treasury market is flat.DJ30 -80.64 NASDAQ -15.69 SP500 -11.17
09:40 am : As futures indicated, the major indices open on a lower note following a number of negative reports.
Citigroup (C) is again making headlines after being downgraded to Sell from Neutral at Goldman Sachs (GS). Goldman also cut its price estimate on a number of brokers, including Merrill Lynch (MER), Morgan Stanley (MS), Lehman Brothers (LEH), Bear Stearns (BSC), JPMorgan (JPM) and E*Trade (ETFC).
Meanwhile, home improvement retailer Lowe's (LOW) reported earnings that topped expectations, but issued a fourth quarter earnings warning. DJ30 -84.22 NASDAQ -18.20 SP500 -10.50
09:15 am : S&P futures vs fair value: -9.7. Nasdaq futures vs fair value: -10.5.
09:00 am : S&P futures vs fair value: -10.1. Nasdaq futures vs fair value: -10.8. The futures market has pared some of its losses, but still points to a lower open. The economic calendar is empty today.
08:30 am : S&P futures vs fair value: -10.5. Nasdaq futures vs fair value: -13.5. Early sentiment weakens as Deutsche Bank cuts its target on eBay (EBAY) to $30 from $33. Meanwhile, crude oil for January delivery is up 0.9% to $94.65.
08:00 am : S&P futures vs fair value: -8.5. Nasdaq futures vs fair value: -9.3. Futures point to a lower open. A fourth quarter earnings warning from home improvement retailer Lowe's (LOW), Goldman Sachs downgrading Citigroup (C) to sell from neutral, and concerns about an unwinding of the yen carry trade are among the main influences this morning that have driven the bearish bias. Also, there is a Wall Street Journal report that says Chinese regulators have quietly ordered China's commercial banks to freeze lending through the end of the year. In M&A news, Celgene (CELG) is going to acquire Pharmion (PHRM) for $2.9 billion, SABMiller has offered $1.2 billion to acquire Grolsch, and TomTom has reportedly offered $4.2 billion for TeleAtlas.
06:18 am : S&P futures vs fair value: -8.8. Nasdaq futures vs fair value: -9.5.
06:17 am : FTSE...6250.90...-40.30...-0.6%. DAX...7583.36...-28.90...-0.4%.
06:17 am : Nikkei...15042.56...-112.05...-0.7%. Hang Seng...27460.17...-154.26...-0.6%.
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