AI
Monday, November 26, 2007 7:43:19 PM
Market Update 071126
http://biz.yahoo.com/mu/update.html
4:25 pm : For a brief period today, there was a twinge of optimism that the stock market would be able to score back-to-back gains. Reports of stronger than expected retail traffic over the Thanksgiving holiday contributed to that view. However, it wasn't long before concerns about the financial sector (-4.1%) took hold again and knocked the market down to size.
At the end of the day, the stock market relinquished everything it gained in Friday's shortened session, and then some, and returned to negative territory for the year.
Several factors combined to take the financial sector sharply lower.
UBS downgraded Freddie Mac (FRE 24.50, -1.97) and Fannie Mae (FNM 28.92, -3.28) to Neutral from Buy, CNBC reported that Citigroup (C 30.70, -1.00) is on the verge of a massive layoff announcement that could include as many as 45,000 positions, or nearly 15% of its current workforce, and Senator Charles Schumer reportedly urged regulators to examine the risks involved with the increased lending by the Federal Home Loan Bank of Atlanta to Countrywide (CFC 8.64, -1.01).
The latter report accelerated the selling in the financials as it evoked lingering concerns about Countrywide's liquidity position and fueled fears about the ramifications for Countrywide in the event that source of funding is diminished.
In essence, the enduring sense of uncertainty regarding the mortgage market triggered another broad-based sell-off that saw selling intensify at the end of the day and left the indices at, or near, their worst levels of the session at the closing bell.
Every sector traded lower with all but the defensive-oriented utilities sector (-0.7%) losing more than 1.0%.
Telecom services (-3.1%) followed the financial sector as a loss leader. Energy (-2.8%), technology (-2.5%) and consumer discretionary (-2.3%) also suffered sizable losses.
Despite a report from ShopperTrak RCT that sales rose 8.3% versus last year on the day after Thanksgiving, and 7.2% in the two-day period following Thanksgiving, retailers were not spared in today's sell-off. The homebuilders, though, were the biggest pocket of weakness in the discretionary sector. The S&P industry group plunged 7.2% following some negative comments out of Citigroup with respect to the near-term outlook.
By and large, there was little that worked in the stock market as a risk averse mindset took hold.
The risk aversion was plain to see in the Treasury market, which rallied sharply as losses in the stock market compounded. The 10-year surged more than a point and its yield dropped to 3.84%.
Separately, the dollar index (-0.3% to 74.859) lost further ground Monday. Its weakness, though, didn't help commodities much as slowdown concerns tempered buying efforts. Oil prices slipped 0.5% to $97.70 amid reports that Saudi Arabia has increased its production.DJ30 -237.44 NASDAQ -55.61 SP500 -33.48
3:30 pm : Equities extend their late-day sell-off as the major indices hit fresh session lows. No particular news item triggered the selling and bonds continue to rally in a flight to quality. The S&P 500 is now trading slightly below the unchanged mark for the year.
The latest selling pressure has been widespread, but once again the financial sector (-3.5%) is leading the way, giving up all of its advance on Friday and then some. Financials are the worst performing sector year-to-date, with consumer discretionary coming in second.
Tomorrow, the Conference Board will release the November Consumer Confidence reading at 10:00 ET. Economists expect the number to come in at 91.5.DJ30 -173.45 NASDAQ -43.83 SP500 -25.63 NASDAQ Dec/Adv/Vol 2166/845/1.51 bln NYSE Dec/Adv/Vol 2270/1031/971 mln
3:00 pm : The major indices drop to minor new session lows following a new wave of broad-based selling interest. Only the utilities sector remains in positive territory (+0.7%). The sector was the main laggard last Friday. Meanwhile, Treasuries have hit new highs.
In currency trading, the DXY Index has slipped 0.22%. The weakness in the dollar has not supported commodities this session, as indicated by the 0.4% decline in the CRB Index.DJ30 -74.30 NASDAQ -20.67 SP500 -13.49 NASDAQ Dec/Adv/Vol 1976/1004/1.33bln NYSE Dec/Adv/Vol 2014/1270/859 mln
2:30 pm : For now, selling pressure has eased as the major indices trade slightly above their worst levels of the session. Five of the ten economic sectors are posting gains, but the heavily weighted financial (-2.3%), tech (-0.6%), and energy (-1.0%) sectors are keeping the broader market in the red.
Investors continue to show risk aversion. Defensive oriented stocks are outperforming, the small-cap Russell 2000 Index is underperforming the S&P 500, and the 10-year note is up 27 ticks.DJ30 -37.23 NASDAQ -14.11 R2K -1.1% SP500 -9.19 NASDAQ Dec/Adv/Vol 1972/1001/1.22 bln NYSE Dec/Adv/Vol 2024/1233/770 mln
2:00 pm : The major indices trade near their worst levels of the session. Financials (-2.4%) deserve most of the blame for the recent decline, led by a sell-off in Fannie Mae (28.81, -3.38) and Freddie Mac (23.34, -3.11). The breadth of the market is somewhat bearish. Decliners outpace advancers at the NYSE by a 18-to-14 margin, while the Nasdaq Composite clocks in at 18-to-11.
Separately, crude oil has pared some of its intraday losses, and is now only down 0.4% to $97.86.DJ30 -51.40 NASDAQ -15.96 SP500 -11.29 NASDAQ Dec/Adv/Vol 1805/1141/1.09 bln NYSE Dec/Adv/Vol 1871/1368/707 mln
1:30 pm : The stock market is back on the decline as financials (-2.2%) continue to falter. As stocks dip, buying interest picks up in the Treasury Market. The 10-year note is now up 15 ticks.
Regarding the S&P 500, Cisco Systems (CSCO 27.69, -1.00) is the main laggard. Morgan Stanley said that Cisco's emerging market business is slowing and is an area of concern. The AP reports that Morgan Stanley still kept its Buy rating on Cisco.
Fellow Nasdaq components Apple (AAPL 176.01 +4.47) and Google (GOOG 687.15, +10.14) are providing leadership. DJ30 -25.36 NASDAQ -9.24 SP500 -7.66 NASDAQ Dec/Adv/Vol 1765/1169/1.01 bln NYSE Dec/Adv/Vol 1754/1470/652 mln
1:00 pm : The stock market has made a slight advance. The Dow continues to trade with small gains, while the S&P 500 and Nasdaq are trading with modest losses.
Twelve of the 30 components in the Dow Jones Industrial Average are trading higher, with airplane manufacturer Boeing (BA 92.04, +2.50) leading the way. Boeing was upgraded to Outperform from Market Perform at Wachovia.
Meanwhile, Citigroup (C 30.70, -1.00) is the main laggard after CNBC reported that the company will be making a larger number of layoffs. DJ30 +14.63 NASDAQ -3.83 SP500 -3.73 NASDAQ Dec/Adv/Vol 1773/1141/902 mln NYSE Dec/Adv/Vol 1791/1419/573 mln
12:30 pm : After heading sideways for the past half-hour, the stock market has had a recent pickup in buying interest that has helped pare a portion of its intraday losses. The Dow is now back in the green. There has not been a specific news item to account for the buying interest.
The homebuilding group (-4.5%) is one of the worst performing industry groups this session after Citigroup downgraded its near-term outlook on homebuilders. The firm says while it continues to believe that long-term investors will do well owning the homebuilders over the next few years, the current overhang of resale inventory and subprime rate resets appear to make historical trading and valuation analyses of limited utility for predicting near-term performance in the group.DJ30 +5.12 NASDAQ -5.86 SP500 -4.49 NASDAQ Dec/Adv/Vol 1799/1086/806 mln NYSE Dec/Adv/Vol 1876/1310/516 mln
12:00 pm : The stock market is trading in the red as financial sector woes once again weigh on the major indices.
CNBC reported that Citigroup (C 30.60, -1.10) is preparing for "massive" layoffs, not just in one division, but across the board. The CNBC commentator stated that he expects up to 45,000 layoffs. Citigroup currently has 317,000 employees. A Citigroup spokeswoman later said that the company was looking to be more efficient, but previous media reports on specific numbers of job cuts are not accurate.
Meanwhile, UBS downgraded both Fannie Mae (FNM 29.90, -2.30) and Freddie Mac (FRE 24.78, -1.69) this morning to Neutral from Buy based on their outlook for EPS compression, deriving primarily from credit pressures.
London based HSBC Holdings (HBC 83.71, -1.03) announced it will bailout two of its structured investment vehicles by adding $45 billion of their assets to its balance sheet. But the company added it doesn't expect the bailout to cause any "material impact" on its earnings or capital strength.
Given the headlines, the financial sector (-2.0%) has been the main laggard throughout the session. All of its industry groups are in the red, with thrifts & mortgages (-6.0%) posting the largest loss following the Fannie and Freddie downgrades.
Retailers and consumer spending were in focus this morning following the kick-off of the holiday shopping season this weekend. Initial reports suggest traffic trends were better than expected for the Thanksgiving shopfest, but that each individual shopper spent less on average from Nov. 22 through yesterday than they did in the comparable period last year.
Defensive oriented sectors have been in favor, with utilities (+1.0%), healthcare (+0.2%) and consumer staples (+0.2%) outperforming on a relative basis. In addition, buying interest in the 10-year note has pushed its yield below 4%.
In commodity trading, crude oil for January delivery has slipped 1.0% to $97.20. A CNBC commentator stated that the network has confirmed Saudi Arabia will increase its oil production. DJ30 -32.51 NASDAQ -14.15 SP500 -8.23 NASDAQ Dec/Adv/Vol 1789/1043/703 mln NYSE Dec/Adv/Vol 1851/1307/446 mln
11:30 am : The major indices continue to slide as six of the ten economic sectors trade in negative territory.
The defensive oriented utilities (+0.7%), healthcare (+0.1%) and consumer staples (+0.2%) sectors are outperforming on a relative basis. Meanwhile the 10-year note is up six ticks, pushing its yield below 4%.
Crude oil for January delivery has slipped 1.1% to $97.05. A CNBC commentator stated that CNBC has confirmed Saudi Arabia will increase its oil production. DJ30 -42.84 NASDAQ -16.41 SP500 -9.27 NASDAQ Dec/Adv/Vol 1708/1077/585 mln NYSE Dec/Adv/Vol 1708/1417/367 mln
11:00 am : The Dow and Nasdaq join the S&P in the red as the financial sector (-2.0%) continues to show weakness.
All industry groups within the sector are posting losses, but there is notable weakness in thrifts & mortgages (-5.3%) as Fannie Mae (FNM 29.94, -2.26) and Freddie Mac (FRE 25.30, -1.17) slide after they were downgraded at UBS.
In merger and acquisition news, shares of Kentucky-based lighting manufacturer Genlyte (GLYT 94.45, +31.78) have soared over 50% this session. The company announced it has entered into a definitive merger agreement with Philips Holding USA, a fully-owned subsidiary of Royal Philips Electronics (PHG 52.37, +0.15) pursuant to which Philips will acquire Genlyte in an all-cash transaction for approximately $2.7 billion. Philips will commence a tender offer for all issued and outstanding shares of Genlyte stock at a price of $95.50 per share in cash within 10 business days of November 25, 2007.DJ30 -30.08 NASDAQ -8.11 SP500 -8.62 NASDAQ Dec/Adv/Vol 1452/1252/418 mln NYSE Dec/Adv/Vol 1508/1547/262 mln
10:30 am : Stocks are on the decline as broad-based selling pressure pushes the telecom (-0.3%) and energy (-0.4%) sectors into the red. The major indices are now trading mixed, with the S&P 500 in the red.
There are reports that a Citigroup (C 31.13, -0.57) spokeswoman has said the company is planning "ways in which we can be more efficient" but stated that previous reports on specific numbers of job cuts are not accurate. A CNBC commentator stated earlier he had sources that expected up to 45,000 layoffs. Citigroup has roughly 327,000 employees. DJ30 +17.48 NASDAQ +4.15 SP500 -2.05 NASDAQ Dec/Adv/Vol 1171/1433/277 mln NYSE Dec/Adv/Vol 1218/1681/139 mln
10:00 am : The major indices are managing to hold onto modest gains as they trade at their best levels of the early-going. The financial (-0.8%) sector is the main laggard as it continues to make headlines.
CNBC reported that Citigroup (C 31.27, -0.43) is preparing for "massive" layoffs, not just in one division, but across the board. UBS downgraded both Fannie Mae (FNM 30.75, -1.45) and Freddie Mac (FRE 25.73, -0.74) this morning to Neutral from Buy based on their outlook for EPS compression, deriving primarily from credit pressures.
Of the eight sectors in the green, the materials (+1.0%) and utilities (+0.7%) sectors are showing the most strength.DJ30 +44.87 NASDAQ +14.07 SP500 +3.99
09:45 am : The major indices open in mixed fashion but recover into the green as retailers and consumer spending continues to be in focus.
According to ShopperTrak RCT, there was an 8.3% gain in sales on Black Friday, higher than their estimated 4%-5% increase. However, shoppers seemed to spend about 3.5% less per person. CIBC noted that on Black Friday, traffic was heaviest at consumer electronics retailers, though there was not much observed interest in higher-end TVs.
UBS expects that holiday sales will show their weakest year-over-year pace since 2002. The firm expects real consumer spending growth to slow to about a 1.5% annual rate during the year ahead from a trend of 3% or more until recently.DJ30 +8.78 NASDAQ +8.47 SP500 +0.28
09:14 am : S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -0.8. Early indications now suggest a slightly lower open. There are no economic reports scheduled today.
09:00 am : S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: flat. The futures market slips and now points to a flat opening. UBS expects that holiday sales will show their weakest year-over-year pace since 2002.
08:30 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: +5.8. Futures continue to point to a positive start. A CNBC commentator reports that Citigroup (C) executives are saying that the firm is preparing for “massive” layoffs. Crude oil is up 0.1% to $98.30 per barrel.
08:00 am : S&P futures vs fair value: +2.2. Nasdaq futures vs fair value: +3.8. A slightly higher start is expected for stocks. Early reports indicate consumers were in spending mode over the holiday weekend and that has the market feeling a bit better this morning about the economy. Fannie Mae (FNM) and Freddie Mac (FRE) have been downgraded to Neutral from Buy at UBS, and Citigroup (C) has downgraded its near-term outlook on homebuilders. Aetna (AET), Boeing (BA), Deere (DE) and Kimberly-Clark (KMB) have all been upgraded by big brokerage houses.
06:21 am : S&P futures vs fair value: +7.7. Nasdaq futures vs fair value: +9.0.
06:20 am : FTSE...6282.60...+20.50...+0.3%. DAX...7641.71...+32.75...+0.4%.
06:20 am : Nikkei...15135.21...+246.44...+1.7%. Hang Seng...27626.62...+1085.53...+4.1%.
http://biz.yahoo.com/mu/update.html
4:25 pm : For a brief period today, there was a twinge of optimism that the stock market would be able to score back-to-back gains. Reports of stronger than expected retail traffic over the Thanksgiving holiday contributed to that view. However, it wasn't long before concerns about the financial sector (-4.1%) took hold again and knocked the market down to size.
At the end of the day, the stock market relinquished everything it gained in Friday's shortened session, and then some, and returned to negative territory for the year.
Several factors combined to take the financial sector sharply lower.
UBS downgraded Freddie Mac (FRE 24.50, -1.97) and Fannie Mae (FNM 28.92, -3.28) to Neutral from Buy, CNBC reported that Citigroup (C 30.70, -1.00) is on the verge of a massive layoff announcement that could include as many as 45,000 positions, or nearly 15% of its current workforce, and Senator Charles Schumer reportedly urged regulators to examine the risks involved with the increased lending by the Federal Home Loan Bank of Atlanta to Countrywide (CFC 8.64, -1.01).
The latter report accelerated the selling in the financials as it evoked lingering concerns about Countrywide's liquidity position and fueled fears about the ramifications for Countrywide in the event that source of funding is diminished.
In essence, the enduring sense of uncertainty regarding the mortgage market triggered another broad-based sell-off that saw selling intensify at the end of the day and left the indices at, or near, their worst levels of the session at the closing bell.
Every sector traded lower with all but the defensive-oriented utilities sector (-0.7%) losing more than 1.0%.
Telecom services (-3.1%) followed the financial sector as a loss leader. Energy (-2.8%), technology (-2.5%) and consumer discretionary (-2.3%) also suffered sizable losses.
Despite a report from ShopperTrak RCT that sales rose 8.3% versus last year on the day after Thanksgiving, and 7.2% in the two-day period following Thanksgiving, retailers were not spared in today's sell-off. The homebuilders, though, were the biggest pocket of weakness in the discretionary sector. The S&P industry group plunged 7.2% following some negative comments out of Citigroup with respect to the near-term outlook.
By and large, there was little that worked in the stock market as a risk averse mindset took hold.
The risk aversion was plain to see in the Treasury market, which rallied sharply as losses in the stock market compounded. The 10-year surged more than a point and its yield dropped to 3.84%.
Separately, the dollar index (-0.3% to 74.859) lost further ground Monday. Its weakness, though, didn't help commodities much as slowdown concerns tempered buying efforts. Oil prices slipped 0.5% to $97.70 amid reports that Saudi Arabia has increased its production.DJ30 -237.44 NASDAQ -55.61 SP500 -33.48
3:30 pm : Equities extend their late-day sell-off as the major indices hit fresh session lows. No particular news item triggered the selling and bonds continue to rally in a flight to quality. The S&P 500 is now trading slightly below the unchanged mark for the year.
The latest selling pressure has been widespread, but once again the financial sector (-3.5%) is leading the way, giving up all of its advance on Friday and then some. Financials are the worst performing sector year-to-date, with consumer discretionary coming in second.
Tomorrow, the Conference Board will release the November Consumer Confidence reading at 10:00 ET. Economists expect the number to come in at 91.5.DJ30 -173.45 NASDAQ -43.83 SP500 -25.63 NASDAQ Dec/Adv/Vol 2166/845/1.51 bln NYSE Dec/Adv/Vol 2270/1031/971 mln
3:00 pm : The major indices drop to minor new session lows following a new wave of broad-based selling interest. Only the utilities sector remains in positive territory (+0.7%). The sector was the main laggard last Friday. Meanwhile, Treasuries have hit new highs.
In currency trading, the DXY Index has slipped 0.22%. The weakness in the dollar has not supported commodities this session, as indicated by the 0.4% decline in the CRB Index.DJ30 -74.30 NASDAQ -20.67 SP500 -13.49 NASDAQ Dec/Adv/Vol 1976/1004/1.33bln NYSE Dec/Adv/Vol 2014/1270/859 mln
2:30 pm : For now, selling pressure has eased as the major indices trade slightly above their worst levels of the session. Five of the ten economic sectors are posting gains, but the heavily weighted financial (-2.3%), tech (-0.6%), and energy (-1.0%) sectors are keeping the broader market in the red.
Investors continue to show risk aversion. Defensive oriented stocks are outperforming, the small-cap Russell 2000 Index is underperforming the S&P 500, and the 10-year note is up 27 ticks.DJ30 -37.23 NASDAQ -14.11 R2K -1.1% SP500 -9.19 NASDAQ Dec/Adv/Vol 1972/1001/1.22 bln NYSE Dec/Adv/Vol 2024/1233/770 mln
2:00 pm : The major indices trade near their worst levels of the session. Financials (-2.4%) deserve most of the blame for the recent decline, led by a sell-off in Fannie Mae (28.81, -3.38) and Freddie Mac (23.34, -3.11). The breadth of the market is somewhat bearish. Decliners outpace advancers at the NYSE by a 18-to-14 margin, while the Nasdaq Composite clocks in at 18-to-11.
Separately, crude oil has pared some of its intraday losses, and is now only down 0.4% to $97.86.DJ30 -51.40 NASDAQ -15.96 SP500 -11.29 NASDAQ Dec/Adv/Vol 1805/1141/1.09 bln NYSE Dec/Adv/Vol 1871/1368/707 mln
1:30 pm : The stock market is back on the decline as financials (-2.2%) continue to falter. As stocks dip, buying interest picks up in the Treasury Market. The 10-year note is now up 15 ticks.
Regarding the S&P 500, Cisco Systems (CSCO 27.69, -1.00) is the main laggard. Morgan Stanley said that Cisco's emerging market business is slowing and is an area of concern. The AP reports that Morgan Stanley still kept its Buy rating on Cisco.
Fellow Nasdaq components Apple (AAPL 176.01 +4.47) and Google (GOOG 687.15, +10.14) are providing leadership. DJ30 -25.36 NASDAQ -9.24 SP500 -7.66 NASDAQ Dec/Adv/Vol 1765/1169/1.01 bln NYSE Dec/Adv/Vol 1754/1470/652 mln
1:00 pm : The stock market has made a slight advance. The Dow continues to trade with small gains, while the S&P 500 and Nasdaq are trading with modest losses.
Twelve of the 30 components in the Dow Jones Industrial Average are trading higher, with airplane manufacturer Boeing (BA 92.04, +2.50) leading the way. Boeing was upgraded to Outperform from Market Perform at Wachovia.
Meanwhile, Citigroup (C 30.70, -1.00) is the main laggard after CNBC reported that the company will be making a larger number of layoffs. DJ30 +14.63 NASDAQ -3.83 SP500 -3.73 NASDAQ Dec/Adv/Vol 1773/1141/902 mln NYSE Dec/Adv/Vol 1791/1419/573 mln
12:30 pm : After heading sideways for the past half-hour, the stock market has had a recent pickup in buying interest that has helped pare a portion of its intraday losses. The Dow is now back in the green. There has not been a specific news item to account for the buying interest.
The homebuilding group (-4.5%) is one of the worst performing industry groups this session after Citigroup downgraded its near-term outlook on homebuilders. The firm says while it continues to believe that long-term investors will do well owning the homebuilders over the next few years, the current overhang of resale inventory and subprime rate resets appear to make historical trading and valuation analyses of limited utility for predicting near-term performance in the group.DJ30 +5.12 NASDAQ -5.86 SP500 -4.49 NASDAQ Dec/Adv/Vol 1799/1086/806 mln NYSE Dec/Adv/Vol 1876/1310/516 mln
12:00 pm : The stock market is trading in the red as financial sector woes once again weigh on the major indices.
CNBC reported that Citigroup (C 30.60, -1.10) is preparing for "massive" layoffs, not just in one division, but across the board. The CNBC commentator stated that he expects up to 45,000 layoffs. Citigroup currently has 317,000 employees. A Citigroup spokeswoman later said that the company was looking to be more efficient, but previous media reports on specific numbers of job cuts are not accurate.
Meanwhile, UBS downgraded both Fannie Mae (FNM 29.90, -2.30) and Freddie Mac (FRE 24.78, -1.69) this morning to Neutral from Buy based on their outlook for EPS compression, deriving primarily from credit pressures.
London based HSBC Holdings (HBC 83.71, -1.03) announced it will bailout two of its structured investment vehicles by adding $45 billion of their assets to its balance sheet. But the company added it doesn't expect the bailout to cause any "material impact" on its earnings or capital strength.
Given the headlines, the financial sector (-2.0%) has been the main laggard throughout the session. All of its industry groups are in the red, with thrifts & mortgages (-6.0%) posting the largest loss following the Fannie and Freddie downgrades.
Retailers and consumer spending were in focus this morning following the kick-off of the holiday shopping season this weekend. Initial reports suggest traffic trends were better than expected for the Thanksgiving shopfest, but that each individual shopper spent less on average from Nov. 22 through yesterday than they did in the comparable period last year.
Defensive oriented sectors have been in favor, with utilities (+1.0%), healthcare (+0.2%) and consumer staples (+0.2%) outperforming on a relative basis. In addition, buying interest in the 10-year note has pushed its yield below 4%.
In commodity trading, crude oil for January delivery has slipped 1.0% to $97.20. A CNBC commentator stated that the network has confirmed Saudi Arabia will increase its oil production. DJ30 -32.51 NASDAQ -14.15 SP500 -8.23 NASDAQ Dec/Adv/Vol 1789/1043/703 mln NYSE Dec/Adv/Vol 1851/1307/446 mln
11:30 am : The major indices continue to slide as six of the ten economic sectors trade in negative territory.
The defensive oriented utilities (+0.7%), healthcare (+0.1%) and consumer staples (+0.2%) sectors are outperforming on a relative basis. Meanwhile the 10-year note is up six ticks, pushing its yield below 4%.
Crude oil for January delivery has slipped 1.1% to $97.05. A CNBC commentator stated that CNBC has confirmed Saudi Arabia will increase its oil production. DJ30 -42.84 NASDAQ -16.41 SP500 -9.27 NASDAQ Dec/Adv/Vol 1708/1077/585 mln NYSE Dec/Adv/Vol 1708/1417/367 mln
11:00 am : The Dow and Nasdaq join the S&P in the red as the financial sector (-2.0%) continues to show weakness.
All industry groups within the sector are posting losses, but there is notable weakness in thrifts & mortgages (-5.3%) as Fannie Mae (FNM 29.94, -2.26) and Freddie Mac (FRE 25.30, -1.17) slide after they were downgraded at UBS.
In merger and acquisition news, shares of Kentucky-based lighting manufacturer Genlyte (GLYT 94.45, +31.78) have soared over 50% this session. The company announced it has entered into a definitive merger agreement with Philips Holding USA, a fully-owned subsidiary of Royal Philips Electronics (PHG 52.37, +0.15) pursuant to which Philips will acquire Genlyte in an all-cash transaction for approximately $2.7 billion. Philips will commence a tender offer for all issued and outstanding shares of Genlyte stock at a price of $95.50 per share in cash within 10 business days of November 25, 2007.DJ30 -30.08 NASDAQ -8.11 SP500 -8.62 NASDAQ Dec/Adv/Vol 1452/1252/418 mln NYSE Dec/Adv/Vol 1508/1547/262 mln
10:30 am : Stocks are on the decline as broad-based selling pressure pushes the telecom (-0.3%) and energy (-0.4%) sectors into the red. The major indices are now trading mixed, with the S&P 500 in the red.
There are reports that a Citigroup (C 31.13, -0.57) spokeswoman has said the company is planning "ways in which we can be more efficient" but stated that previous reports on specific numbers of job cuts are not accurate. A CNBC commentator stated earlier he had sources that expected up to 45,000 layoffs. Citigroup has roughly 327,000 employees. DJ30 +17.48 NASDAQ +4.15 SP500 -2.05 NASDAQ Dec/Adv/Vol 1171/1433/277 mln NYSE Dec/Adv/Vol 1218/1681/139 mln
10:00 am : The major indices are managing to hold onto modest gains as they trade at their best levels of the early-going. The financial (-0.8%) sector is the main laggard as it continues to make headlines.
CNBC reported that Citigroup (C 31.27, -0.43) is preparing for "massive" layoffs, not just in one division, but across the board. UBS downgraded both Fannie Mae (FNM 30.75, -1.45) and Freddie Mac (FRE 25.73, -0.74) this morning to Neutral from Buy based on their outlook for EPS compression, deriving primarily from credit pressures.
Of the eight sectors in the green, the materials (+1.0%) and utilities (+0.7%) sectors are showing the most strength.DJ30 +44.87 NASDAQ +14.07 SP500 +3.99
09:45 am : The major indices open in mixed fashion but recover into the green as retailers and consumer spending continues to be in focus.
According to ShopperTrak RCT, there was an 8.3% gain in sales on Black Friday, higher than their estimated 4%-5% increase. However, shoppers seemed to spend about 3.5% less per person. CIBC noted that on Black Friday, traffic was heaviest at consumer electronics retailers, though there was not much observed interest in higher-end TVs.
UBS expects that holiday sales will show their weakest year-over-year pace since 2002. The firm expects real consumer spending growth to slow to about a 1.5% annual rate during the year ahead from a trend of 3% or more until recently.DJ30 +8.78 NASDAQ +8.47 SP500 +0.28
09:14 am : S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -0.8. Early indications now suggest a slightly lower open. There are no economic reports scheduled today.
09:00 am : S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: flat. The futures market slips and now points to a flat opening. UBS expects that holiday sales will show their weakest year-over-year pace since 2002.
08:30 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: +5.8. Futures continue to point to a positive start. A CNBC commentator reports that Citigroup (C) executives are saying that the firm is preparing for “massive” layoffs. Crude oil is up 0.1% to $98.30 per barrel.
08:00 am : S&P futures vs fair value: +2.2. Nasdaq futures vs fair value: +3.8. A slightly higher start is expected for stocks. Early reports indicate consumers were in spending mode over the holiday weekend and that has the market feeling a bit better this morning about the economy. Fannie Mae (FNM) and Freddie Mac (FRE) have been downgraded to Neutral from Buy at UBS, and Citigroup (C) has downgraded its near-term outlook on homebuilders. Aetna (AET), Boeing (BA), Deere (DE) and Kimberly-Clark (KMB) have all been upgraded by big brokerage houses.
06:21 am : S&P futures vs fair value: +7.7. Nasdaq futures vs fair value: +9.0.
06:20 am : FTSE...6282.60...+20.50...+0.3%. DAX...7641.71...+32.75...+0.4%.
06:20 am : Nikkei...15135.21...+246.44...+1.7%. Hang Seng...27626.62...+1085.53...+4.1%.
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