AI
Wednesday, December 05, 2007 8:28:40 PM
Market Update 071205
http://biz.yahoo.com/mu/update.html
4:25 pm : The stock market rallied on Wednesday with large-cap tech stocks leading the way, snapping a two-day losing streak. There was some uncertainty late in the trading day, but the indices finished near their best levels of the session following a late-day surge.
A bullish bias was present in the early-going as investors banked on at least a 25 basis point cut to the fed funds rate on Dec. 11. Stocks received a further boost from a number of better than expected economic reports.
The economic report receiving the most attention today was the ADP employment estimate. The reading showed that November private payrolls increased by a very strong 189,000, more than triple the consensus expectation. This estimate is often well off the mark, but as a general indicator has been fairly good. It suggests Friday's nonfarm payroll increase will be above the current median forecast from economists of 70,000.
Third quarter productivity was revised upward to a 6.3% annual rate from a previously reported 4.9%.
Other good news comes in the form of November factory orders. This figure, which comprises the already released durables orders (with a revision) and nondurables orders, was up 0.5%.
The November national ISM survey of non-manufacturing conditions dipped to 54.1 from 55.8 in October. This compares to an expected level of about 55. A reading above 50 is intended to reflect growth. That isn't a significant variance from expectations.
The rally was nearly derailed midday,though, after Moody's came out and rang some alarm bells regarding bond insurers' capital positions and the potential for MBIA's (MBI 27.42, -5.21) triple-A credit rating to be cut. Stocks traded in a choppy manner following the report, but eventually staged a late day comeback. However, shares of insurers MBIA and Ambac (ABK 23.52, -2.30) still got clipped.
In corporate news, following in Freddie Mac's (FRE 34.67, +2.36) footsteps, Fannie Mae (FNM 36.13, +0.95) said last night it will take steps to shore up its capital position as it prepares to deal with ongoing challenges in the housing market.
Specifically, Fannie Mae will cut its quarterly dividend, beginning in the first quarter, from $0.50 to $0.35, and it will sell $7 billion in non-convertible preferred stock in one or more offerings in December.
Of the nine sectors trading higher, tech (+2.5%) showed the most strength. The sector benefited from the outperformance of several large-cap tech names, in part due to Intel (INTC 27.22, +0.91) getting upgraded to Overweight from Market Weight at Thomas Weisel based on evidence of above average seasonal personal computer demand going into 2008. Financials (+2.0%) finished second.
The consumer discretionary sector (-0.3%) was the main laggard after shares of Comcast (CMCSA 18.92, -1.81) got pummeled after the company lowered its revenue guidance.
Oil traded in a choppy manner and finally finished down $0.83 at $87.49. Oil spiked overnight on news that OPEC decided not to increase output due to economic concerns. Later in the day, the government's weekly energy report showed inventories dropped much larger than expected. Normally, it would be expected that oil would rally on these bullish reports. While oil prices held up following the report, they eventually pulled back as the day progressed and ended the session lower.
Presumably, the slide was due to both distillate and gasoline inventories showing larger than expected builds, and the key oil hub of Cushing, Oklahoma, also showing a build. In addition, there was speculation that Saudi Arabia will increase crude output despite the OPEC decision. The dollar index spiked 1.06% today, which may have also aided in pushing oil prices lower.DJ30 +196.23 NASDAQ +46.53 NQ100 2.0% R2K 1.8% SP400 1.5% SP500 +22.22 NASDAQ Dec/Adv/Vol 976/2006/2.27 bln NYSE Dec/Adv/Vol 842/2427/1.35 bln
3:30 pm : There has been a bit of uncertainty in the market, as the indices are now back on the rise. Action has been choppy since the Moody's news hit the wires.
The financial sector (+1.7%) has had a decent recovery, with all 19 of its industry groups back in the green.
Tomorrow, the weekly initial jobless claims will be reported at 8:30 ET. Briefing.com expects a reading of 335K.DJ30 +175.91 NASDAQ +41.14 SP500 +18.12 NASDAQ Dec/Adv/Vol 1102/1852/1.82 bln NYSE Dec/Adv/Vol 1069/2178/1.05 bln
3:00 pm : After attempting to head higher, the major indices are back on the decline, trading near their lowest levels of the session. Gains are still substantial, although the stock market is well off its highs.
Pharmaceutical maker Bristol-Myers Squibb (BMY 29.16, +0.10) announced today it will reduce the number of manufacturing facilities by more than 50% and reduce its workforce by approximately 10% between 2007 and 2010. The company said it expects to generate approximately $1.5 billion in cost reductions and avoidance on a pre-tax basis. Also, Bristol raised its FY08 EPS guidance.DJ30 +134.37 NASDAQ +32.15 SP500 +13.34 NASDAQ Dec/Adv/Vol 1061/1880/1.67 bln NYSE Dec/Adv/Vol 932/2294/949 mln
2:30 pm : The stock market reaches just below its session highs and then falls back toward its afternoon lows.
There is a pullback across all sectors, although there is particular weakness within the financial sector, now only up 0.7%. Three of its groups are now in the red, including investment banks & brokerages (-0.3%) and insurance brokers (-0.3%). Yesterday, investment banks were particulary weak after J.P. Morgan cut its earnings estimate on several firms.
The breadth of the market paints a mostly bullish picture. On the NYSE advancers outpace decliners at a 3-to-1 margin, although new lows outpace new highs by a slight margin. On the Nasdaq advancers outpace decliners by more than a 2-to-1 margin.DJ30 +137.54 NASDAQ +38.36 SP500 +14.43 NASDAQ Dec/Adv/Vol 908/2025/1.50 bln NYSE Dec/Adv/Vol 814/2413/850 mln
2:00 pm : Financials had a steep drop following the Moody's report regarding bond insurers. The financial sector was up 2.4% at its session high, a full percentage point higher than its current level of 1.4%. By comparison, the S&P 500 dropped by a much smaller margin, going from its high of 1.6% to the current level of 1.4%.
Currently, the major indices are back on the rise as they are being supported by large cap tech names.
Intel (INTC 27.29, +0.98) is a standout today after being upgraded to Overweight from Market Weight at Thomas Weisel. The firm also raised its price target on shares of Intel to $33 from $28 based on evidence of above average seasonal personal computer demand going into 2008.DJ30 +179.40 NASDAQ +47.59 SP500 +19.60 NASDAQ Dec/Adv/Vol 901/2002/1.38 NYSE Dec/Adv/Vol 827/2402/794 mln
1:30 pm : The stock market continues to pullback from afternoon highs, and bonds spike to the unchanged mark as the market digests the news regarding MBIA (MBI 30.22, -2.41). The major indices, though, are still posting gains in excess of 1%.
In regard to MBIA , Moody's reports additional analysis of MBIA's direct residential mortgage-backed security portfolio leads Moody's to believe the guarantor is at greater risk of exhibiting a capital shortfall than previously communicated; they now consider this somewhat likely.
Separately, Reuters reports that Deutsche Bank CEO Josef Ackermann says the credit crisis is not over yet. He says the next couple of weeks will be very difficult for financial markets, but does not expect a U.S. recession, and only a moderate slowdown in Europe.DJ30 +154.93 NASDAQ +42.28 SP500 +16.42 NASDAQ Dec/Adv/Vol 899/2002/1.27 bln NYSE Dec/Adv/Vol 705/2498/654 mln
1:05 pm : The major indices climb to fresh highs but then slip. The weakness is attributed to news that Moody’s now sees a capital shortfall at MBIA (MBI 31.53, -1.13) “somewhat likely.” The stock market is still holding onto a substantial gain.
AIG (AIG 59.33, +3.83) is pacing the Dow’s advance. At its investor’s meeting the company said it only has very small exposure to structured investment vehicles and collateralized debt obligations.
DJ30 +165.61 NASDAQ +43.42 SP500 +18.45 NASDAQ Dec/Adv/Vol 788/2091/1.14 bln NYSE Dec/Adv/Vol 690/2501/633 mln
12:30 pm : For now, buying efforts fade as the major indices hold modestly below their best levels of the session. Meanwhile, crude oil (-0.1% to $88.24) has actually slipped into the red, despite OPEC deciding to not increase output, and the larger draw in inventories than expected
Following in Freddie Mac's (FRE 32.94, +0.65) footsteps, Fannie Mae (FNM 35.88, +0.70) said last night it will take steps to shore up its capital position as it prepares to deal with ongoing challenges in the housing market.
Specifically, Fannie Mae will cut its quarterly dividend, beginning in the first quarter, from $0.50 to $0.35, and it will sell $7 billion in non-convertible preferred stock in one or more offerings in December.DJ30 +184.26 NASDAQ +48.10 SP500 +21.77 NASDAQ Dec/Adv/Vol 762/2086/1.01 bln NYSE Dec/Adv/Vol 671/2503/542 mln
12:00 pm : At midday, the major indices are posting significant gains as the bulls attempt to break a two-day losing streak. An overwhelming belief that the Fed will cut rates provided momentum in the early-going. Currently, Chicago Board of Trade futures price a 100% chance of a 25 basis point rate cut at the Dec. 11 FOMC meeting, and a 68% chance of a 50 basis point cut.
Several economic reports are also supporting the bullish bias.
The ADP estimate for November payrolls was a very strong 189,000 increase in private payrolls. With average growth in government payrolls, that suggests about a 225,000 November payroll gain. This estimate is often well off the mark, but as a general indicator has been fairly good. It suggests Friday's nonfarm payroll increase will be above the current median forecast from economists of 70,000.
Third quarter productivity was revised upward to a 6.3% annual rate from a previously reported 4.9%.
Other good news comes in the form of November factory orders. This figure, which comprises the already released durables orders (with a revision) and nondurables orders, was up 0.5%.
The November national ISM survey of non-manufacturing conditions dipped to 54.1 from 55.8 in October. This compares to an expected level of about 55. A reading above 50 is intended to reflect growth. That isn't a significant variance from expectations.
In corporate news, shares of Comcast (CMCSA 18.60, -2.13) are getting pummeled after the company lowered its revenue growth guidance for the year, and forecast expenses above its previous guidance, due to a challenging economic environment and increased competitive pressures. Adding to its woes, the stock was downgraded by several brokerages.
The Comcast news has brought down shares of its competitors, as well the consumer discretionary sector (-0.2%), which is the sole sector in the red.
Nine sectors are trading higher, with six posting gains in excess of 1%. The heavily-weighted tech (+2.5%), financials (+2.1%), and energy sectors (+2.3%), which combined equal roughly 47% of the S&P 500, are providing leadership.
Crude oil (+0.6% to $88.85) has traded in a choppy manner, and is currently in positive territory but off its highs. Oil spiked in the early-morning after OPEC decided not to increase crude output, citing economic concerns. Separately, crude inventories showed a much larger draw than expected, but prices actually slipped following the report. DJ30 +189.13 NASDAQ +49.82 SP500 +22.55 NASDAQ Dec/Adv/Vol 741/2064/905 mln NYSE Dec/Adv/Vol 683/2466/490 mln
11:30 am : The stock market continues to march upward, trading at fresh session highs. The technology sector (+2.5%) is pacing the advance.
Of the 86 stocks trading higher in the tech-heavy Nasdaq 100, leaders include Apple (AAPL 184.33, +4.52), Microsoft (MSFT 33.84, +1.07) and Qualcomm (QCOM 40.35, +0.99). Comcast (CMCSA 18.57, -2.15) is the main laggard.DJ30 +181.60 NASDAQ +49.05 SP500 +20.99 NASDAQ Dec/Adv/Vol 727/2030/758 mln NYSE Dec/Adv/Vol 753/2343/399 mln
11:00 am : Since the last update, the major indices hit fresh intraday highs as the bullish bias remains intact.
Crude oil traded in a choppy manner following the inventory report that showed a larger draw than expected. Currently oil (+0.3% to $88.57) is actually trading lower than pre-data levels. Presumably, the gasoline inventory build of nearly 4 million barrels is preventing crude prices from making gains.
Shares of cable company Comcast (CMCSA 18.65, -2.08) are getting clipped, which is weighing on the consumer discretionary sector (-0.4%). The company lowered its revenue growth guidance for the year, and forecast expenses above its previous guidance, due to a challenging economic environment and increased competitive pressures. Adding to its woes, the stock was also downgraded by several brokerages.
The reduced guidance is also weighing on Comcast's competitors including Cablevision (CVC 25.00, -1.89) and Time Warner (TWX 16.69, -0.33). DJ30 +144.10 NASDAQ +43.04 SP500 +16.93 NASDAQ Dec/Adv/Vol 754/1948/602 mln NYSE Dec/Adv/Vol 729/2315/311 mln
10:30 am : The major indices are trading slightly below their intraday highs, but continue to post large gains.
Just hitting the wires, for the week ended Nov. 30, crude inventories fell by 7.91 million barrels. Analysts expected a smaller decrease of 1.25 million barrels. Just prior to the release, crude oil was trading up 1.2% to $89.36.
Reported at the top of the hour, ISM Services came in at 54.1, which was slightly less than the consensus estimate of 55.0. A reading above 50 is intended to reflect growth. That isn't a significant variance from expectations. Separately, November factory orders were up 0.5% compared to expectations that they would be unchanged. DJ30 +119.84 NASDAQ +32.41 SP500 +14.16 NASDAQ Dec/Adv/Vol 658/1924/436 mln NYSE Dec/Adv/Vol 564/2378/170 mln
10:00 am : The stock market is posting significant gains with nine of the ten economic sectors in the green. Tech (+1.4%) and energy (+1.7%) are providing leadership in the early-going. Consumer discretionary (-0.3%) is the main laggard.
A closer look into industry groups paints a better picture of how broad-based support currently is. 157 of the 167 S&P 500 industry groups are in positive territory.
DJ30 +123.80 NASDAQ +31.31 SP500 +14.90 NASDAQ Dec/Adv/Vol 427/1934/189 mln
09:40 am : Stocks open significantly higher, as futures suggested. A prevailing view that the Fed will cut rates at its Dec. 11 meeting gave the market an early boost. Adding to the positive bias was a stronger than expected ADP employment reading, and an upwardly revised productivity number.
OPEC decided to keep output unchanged due to its uncertainty about the economic outlook, but also agreed to meet again in January. Crude oil is up 1.4% to $89.57.DJ30 +115.18 NASDAQ +29.48 SP500 +14.11
09:15 am : S&P futures vs fair value: +14.5. Nasdaq futures vs fair value: +25.0.
09:01 am : S&P futures vs fair value: +14.8. Nasdaq futures vs fair value: +25.3. S&P and Nasdaq futures extend their gains. Third quarter productivity was revised upward to a 6.3% annual rate from a previously reported 4.9%. Crude oil is up 1.7% to $89.76 after OPEC decided not to increase output. The government’s weekly energy report is slated for release at 10:30 ET.
08:30 am : S&P futures vs fair value: +7.0. Nasdaq futures vs fair value: +12.5. Futures trade in a choppy manner after the November ADP employment report showed nonfarm private employment grew at 189K on a seasonally adjusted basis compared to the consensus estimate that called for a reading of 50K.
08:00 am : S&P futures vs fair value: +8.0. Nasdaq futures vs fair value: +11.0. Futures point to a higher start despite Fannie Mae (FNM) cutting its dividend and OPEC deciding to not raise output. The higher open is being supported by the prevailing view the Fed will cut interest rates again, supported by an article in the WSJ that didn’t question if the Fed will cut rates again, but by how much. Separately, positive analyst calls on Dow components United Technologies (UTX) and Intel (INTC), a report that the subprime mortgage rescue plan could involve freezing teaser rates for as long as five years, and a smattering of better than expected earnings news from certain retailers are also contributing to the positive bias.
06:32 am : S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +7.5.
06:31 am : FTSE...6382.00...+66.80...+1.1%. DAX...7866.69...+57.75...+0.7%.
06:31 am : Nikkei...15608.88...+128.69...+0.8%. Hang Seng...29345.45...+465.86...+1.6%.
http://biz.yahoo.com/mu/update.html
4:25 pm : The stock market rallied on Wednesday with large-cap tech stocks leading the way, snapping a two-day losing streak. There was some uncertainty late in the trading day, but the indices finished near their best levels of the session following a late-day surge.
A bullish bias was present in the early-going as investors banked on at least a 25 basis point cut to the fed funds rate on Dec. 11. Stocks received a further boost from a number of better than expected economic reports.
The economic report receiving the most attention today was the ADP employment estimate. The reading showed that November private payrolls increased by a very strong 189,000, more than triple the consensus expectation. This estimate is often well off the mark, but as a general indicator has been fairly good. It suggests Friday's nonfarm payroll increase will be above the current median forecast from economists of 70,000.
Third quarter productivity was revised upward to a 6.3% annual rate from a previously reported 4.9%.
Other good news comes in the form of November factory orders. This figure, which comprises the already released durables orders (with a revision) and nondurables orders, was up 0.5%.
The November national ISM survey of non-manufacturing conditions dipped to 54.1 from 55.8 in October. This compares to an expected level of about 55. A reading above 50 is intended to reflect growth. That isn't a significant variance from expectations.
The rally was nearly derailed midday,though, after Moody's came out and rang some alarm bells regarding bond insurers' capital positions and the potential for MBIA's (MBI 27.42, -5.21) triple-A credit rating to be cut. Stocks traded in a choppy manner following the report, but eventually staged a late day comeback. However, shares of insurers MBIA and Ambac (ABK 23.52, -2.30) still got clipped.
In corporate news, following in Freddie Mac's (FRE 34.67, +2.36) footsteps, Fannie Mae (FNM 36.13, +0.95) said last night it will take steps to shore up its capital position as it prepares to deal with ongoing challenges in the housing market.
Specifically, Fannie Mae will cut its quarterly dividend, beginning in the first quarter, from $0.50 to $0.35, and it will sell $7 billion in non-convertible preferred stock in one or more offerings in December.
Of the nine sectors trading higher, tech (+2.5%) showed the most strength. The sector benefited from the outperformance of several large-cap tech names, in part due to Intel (INTC 27.22, +0.91) getting upgraded to Overweight from Market Weight at Thomas Weisel based on evidence of above average seasonal personal computer demand going into 2008. Financials (+2.0%) finished second.
The consumer discretionary sector (-0.3%) was the main laggard after shares of Comcast (CMCSA 18.92, -1.81) got pummeled after the company lowered its revenue guidance.
Oil traded in a choppy manner and finally finished down $0.83 at $87.49. Oil spiked overnight on news that OPEC decided not to increase output due to economic concerns. Later in the day, the government's weekly energy report showed inventories dropped much larger than expected. Normally, it would be expected that oil would rally on these bullish reports. While oil prices held up following the report, they eventually pulled back as the day progressed and ended the session lower.
Presumably, the slide was due to both distillate and gasoline inventories showing larger than expected builds, and the key oil hub of Cushing, Oklahoma, also showing a build. In addition, there was speculation that Saudi Arabia will increase crude output despite the OPEC decision. The dollar index spiked 1.06% today, which may have also aided in pushing oil prices lower.DJ30 +196.23 NASDAQ +46.53 NQ100 2.0% R2K 1.8% SP400 1.5% SP500 +22.22 NASDAQ Dec/Adv/Vol 976/2006/2.27 bln NYSE Dec/Adv/Vol 842/2427/1.35 bln
3:30 pm : There has been a bit of uncertainty in the market, as the indices are now back on the rise. Action has been choppy since the Moody's news hit the wires.
The financial sector (+1.7%) has had a decent recovery, with all 19 of its industry groups back in the green.
Tomorrow, the weekly initial jobless claims will be reported at 8:30 ET. Briefing.com expects a reading of 335K.DJ30 +175.91 NASDAQ +41.14 SP500 +18.12 NASDAQ Dec/Adv/Vol 1102/1852/1.82 bln NYSE Dec/Adv/Vol 1069/2178/1.05 bln
3:00 pm : After attempting to head higher, the major indices are back on the decline, trading near their lowest levels of the session. Gains are still substantial, although the stock market is well off its highs.
Pharmaceutical maker Bristol-Myers Squibb (BMY 29.16, +0.10) announced today it will reduce the number of manufacturing facilities by more than 50% and reduce its workforce by approximately 10% between 2007 and 2010. The company said it expects to generate approximately $1.5 billion in cost reductions and avoidance on a pre-tax basis. Also, Bristol raised its FY08 EPS guidance.DJ30 +134.37 NASDAQ +32.15 SP500 +13.34 NASDAQ Dec/Adv/Vol 1061/1880/1.67 bln NYSE Dec/Adv/Vol 932/2294/949 mln
2:30 pm : The stock market reaches just below its session highs and then falls back toward its afternoon lows.
There is a pullback across all sectors, although there is particular weakness within the financial sector, now only up 0.7%. Three of its groups are now in the red, including investment banks & brokerages (-0.3%) and insurance brokers (-0.3%). Yesterday, investment banks were particulary weak after J.P. Morgan cut its earnings estimate on several firms.
The breadth of the market paints a mostly bullish picture. On the NYSE advancers outpace decliners at a 3-to-1 margin, although new lows outpace new highs by a slight margin. On the Nasdaq advancers outpace decliners by more than a 2-to-1 margin.DJ30 +137.54 NASDAQ +38.36 SP500 +14.43 NASDAQ Dec/Adv/Vol 908/2025/1.50 bln NYSE Dec/Adv/Vol 814/2413/850 mln
2:00 pm : Financials had a steep drop following the Moody's report regarding bond insurers. The financial sector was up 2.4% at its session high, a full percentage point higher than its current level of 1.4%. By comparison, the S&P 500 dropped by a much smaller margin, going from its high of 1.6% to the current level of 1.4%.
Currently, the major indices are back on the rise as they are being supported by large cap tech names.
Intel (INTC 27.29, +0.98) is a standout today after being upgraded to Overweight from Market Weight at Thomas Weisel. The firm also raised its price target on shares of Intel to $33 from $28 based on evidence of above average seasonal personal computer demand going into 2008.DJ30 +179.40 NASDAQ +47.59 SP500 +19.60 NASDAQ Dec/Adv/Vol 901/2002/1.38 NYSE Dec/Adv/Vol 827/2402/794 mln
1:30 pm : The stock market continues to pullback from afternoon highs, and bonds spike to the unchanged mark as the market digests the news regarding MBIA (MBI 30.22, -2.41). The major indices, though, are still posting gains in excess of 1%.
In regard to MBIA , Moody's reports additional analysis of MBIA's direct residential mortgage-backed security portfolio leads Moody's to believe the guarantor is at greater risk of exhibiting a capital shortfall than previously communicated; they now consider this somewhat likely.
Separately, Reuters reports that Deutsche Bank CEO Josef Ackermann says the credit crisis is not over yet. He says the next couple of weeks will be very difficult for financial markets, but does not expect a U.S. recession, and only a moderate slowdown in Europe.DJ30 +154.93 NASDAQ +42.28 SP500 +16.42 NASDAQ Dec/Adv/Vol 899/2002/1.27 bln NYSE Dec/Adv/Vol 705/2498/654 mln
1:05 pm : The major indices climb to fresh highs but then slip. The weakness is attributed to news that Moody’s now sees a capital shortfall at MBIA (MBI 31.53, -1.13) “somewhat likely.” The stock market is still holding onto a substantial gain.
AIG (AIG 59.33, +3.83) is pacing the Dow’s advance. At its investor’s meeting the company said it only has very small exposure to structured investment vehicles and collateralized debt obligations.
DJ30 +165.61 NASDAQ +43.42 SP500 +18.45 NASDAQ Dec/Adv/Vol 788/2091/1.14 bln NYSE Dec/Adv/Vol 690/2501/633 mln
12:30 pm : For now, buying efforts fade as the major indices hold modestly below their best levels of the session. Meanwhile, crude oil (-0.1% to $88.24) has actually slipped into the red, despite OPEC deciding to not increase output, and the larger draw in inventories than expected
Following in Freddie Mac's (FRE 32.94, +0.65) footsteps, Fannie Mae (FNM 35.88, +0.70) said last night it will take steps to shore up its capital position as it prepares to deal with ongoing challenges in the housing market.
Specifically, Fannie Mae will cut its quarterly dividend, beginning in the first quarter, from $0.50 to $0.35, and it will sell $7 billion in non-convertible preferred stock in one or more offerings in December.DJ30 +184.26 NASDAQ +48.10 SP500 +21.77 NASDAQ Dec/Adv/Vol 762/2086/1.01 bln NYSE Dec/Adv/Vol 671/2503/542 mln
12:00 pm : At midday, the major indices are posting significant gains as the bulls attempt to break a two-day losing streak. An overwhelming belief that the Fed will cut rates provided momentum in the early-going. Currently, Chicago Board of Trade futures price a 100% chance of a 25 basis point rate cut at the Dec. 11 FOMC meeting, and a 68% chance of a 50 basis point cut.
Several economic reports are also supporting the bullish bias.
The ADP estimate for November payrolls was a very strong 189,000 increase in private payrolls. With average growth in government payrolls, that suggests about a 225,000 November payroll gain. This estimate is often well off the mark, but as a general indicator has been fairly good. It suggests Friday's nonfarm payroll increase will be above the current median forecast from economists of 70,000.
Third quarter productivity was revised upward to a 6.3% annual rate from a previously reported 4.9%.
Other good news comes in the form of November factory orders. This figure, which comprises the already released durables orders (with a revision) and nondurables orders, was up 0.5%.
The November national ISM survey of non-manufacturing conditions dipped to 54.1 from 55.8 in October. This compares to an expected level of about 55. A reading above 50 is intended to reflect growth. That isn't a significant variance from expectations.
In corporate news, shares of Comcast (CMCSA 18.60, -2.13) are getting pummeled after the company lowered its revenue growth guidance for the year, and forecast expenses above its previous guidance, due to a challenging economic environment and increased competitive pressures. Adding to its woes, the stock was downgraded by several brokerages.
The Comcast news has brought down shares of its competitors, as well the consumer discretionary sector (-0.2%), which is the sole sector in the red.
Nine sectors are trading higher, with six posting gains in excess of 1%. The heavily-weighted tech (+2.5%), financials (+2.1%), and energy sectors (+2.3%), which combined equal roughly 47% of the S&P 500, are providing leadership.
Crude oil (+0.6% to $88.85) has traded in a choppy manner, and is currently in positive territory but off its highs. Oil spiked in the early-morning after OPEC decided not to increase crude output, citing economic concerns. Separately, crude inventories showed a much larger draw than expected, but prices actually slipped following the report. DJ30 +189.13 NASDAQ +49.82 SP500 +22.55 NASDAQ Dec/Adv/Vol 741/2064/905 mln NYSE Dec/Adv/Vol 683/2466/490 mln
11:30 am : The stock market continues to march upward, trading at fresh session highs. The technology sector (+2.5%) is pacing the advance.
Of the 86 stocks trading higher in the tech-heavy Nasdaq 100, leaders include Apple (AAPL 184.33, +4.52), Microsoft (MSFT 33.84, +1.07) and Qualcomm (QCOM 40.35, +0.99). Comcast (CMCSA 18.57, -2.15) is the main laggard.DJ30 +181.60 NASDAQ +49.05 SP500 +20.99 NASDAQ Dec/Adv/Vol 727/2030/758 mln NYSE Dec/Adv/Vol 753/2343/399 mln
11:00 am : Since the last update, the major indices hit fresh intraday highs as the bullish bias remains intact.
Crude oil traded in a choppy manner following the inventory report that showed a larger draw than expected. Currently oil (+0.3% to $88.57) is actually trading lower than pre-data levels. Presumably, the gasoline inventory build of nearly 4 million barrels is preventing crude prices from making gains.
Shares of cable company Comcast (CMCSA 18.65, -2.08) are getting clipped, which is weighing on the consumer discretionary sector (-0.4%). The company lowered its revenue growth guidance for the year, and forecast expenses above its previous guidance, due to a challenging economic environment and increased competitive pressures. Adding to its woes, the stock was also downgraded by several brokerages.
The reduced guidance is also weighing on Comcast's competitors including Cablevision (CVC 25.00, -1.89) and Time Warner (TWX 16.69, -0.33). DJ30 +144.10 NASDAQ +43.04 SP500 +16.93 NASDAQ Dec/Adv/Vol 754/1948/602 mln NYSE Dec/Adv/Vol 729/2315/311 mln
10:30 am : The major indices are trading slightly below their intraday highs, but continue to post large gains.
Just hitting the wires, for the week ended Nov. 30, crude inventories fell by 7.91 million barrels. Analysts expected a smaller decrease of 1.25 million barrels. Just prior to the release, crude oil was trading up 1.2% to $89.36.
Reported at the top of the hour, ISM Services came in at 54.1, which was slightly less than the consensus estimate of 55.0. A reading above 50 is intended to reflect growth. That isn't a significant variance from expectations. Separately, November factory orders were up 0.5% compared to expectations that they would be unchanged. DJ30 +119.84 NASDAQ +32.41 SP500 +14.16 NASDAQ Dec/Adv/Vol 658/1924/436 mln NYSE Dec/Adv/Vol 564/2378/170 mln
10:00 am : The stock market is posting significant gains with nine of the ten economic sectors in the green. Tech (+1.4%) and energy (+1.7%) are providing leadership in the early-going. Consumer discretionary (-0.3%) is the main laggard.
A closer look into industry groups paints a better picture of how broad-based support currently is. 157 of the 167 S&P 500 industry groups are in positive territory.
DJ30 +123.80 NASDAQ +31.31 SP500 +14.90 NASDAQ Dec/Adv/Vol 427/1934/189 mln
09:40 am : Stocks open significantly higher, as futures suggested. A prevailing view that the Fed will cut rates at its Dec. 11 meeting gave the market an early boost. Adding to the positive bias was a stronger than expected ADP employment reading, and an upwardly revised productivity number.
OPEC decided to keep output unchanged due to its uncertainty about the economic outlook, but also agreed to meet again in January. Crude oil is up 1.4% to $89.57.DJ30 +115.18 NASDAQ +29.48 SP500 +14.11
09:15 am : S&P futures vs fair value: +14.5. Nasdaq futures vs fair value: +25.0.
09:01 am : S&P futures vs fair value: +14.8. Nasdaq futures vs fair value: +25.3. S&P and Nasdaq futures extend their gains. Third quarter productivity was revised upward to a 6.3% annual rate from a previously reported 4.9%. Crude oil is up 1.7% to $89.76 after OPEC decided not to increase output. The government’s weekly energy report is slated for release at 10:30 ET.
08:30 am : S&P futures vs fair value: +7.0. Nasdaq futures vs fair value: +12.5. Futures trade in a choppy manner after the November ADP employment report showed nonfarm private employment grew at 189K on a seasonally adjusted basis compared to the consensus estimate that called for a reading of 50K.
08:00 am : S&P futures vs fair value: +8.0. Nasdaq futures vs fair value: +11.0. Futures point to a higher start despite Fannie Mae (FNM) cutting its dividend and OPEC deciding to not raise output. The higher open is being supported by the prevailing view the Fed will cut interest rates again, supported by an article in the WSJ that didn’t question if the Fed will cut rates again, but by how much. Separately, positive analyst calls on Dow components United Technologies (UTX) and Intel (INTC), a report that the subprime mortgage rescue plan could involve freezing teaser rates for as long as five years, and a smattering of better than expected earnings news from certain retailers are also contributing to the positive bias.
06:32 am : S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +7.5.
06:31 am : FTSE...6382.00...+66.80...+1.1%. DAX...7866.69...+57.75...+0.7%.
06:31 am : Nikkei...15608.88...+128.69...+0.8%. Hang Seng...29345.45...+465.86...+1.6%.
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