AI
Wednesday, December 19, 2007 8:16:21 PM
Market Update 071219
http://biz.yahoo.com/mu/update.html
4:20 pm : It was another whipsaw day of trading for the stock market on Wednesday, with several sizable gains and declines during the session. By the end of the trading day, the major indices were mixed with the Nasdaq closing slightly higher, and the S&P and Dow finishing slightly lower. There were no economic reports, but there was plenty of corporate and Federal Reserve news to keep the market occupied.
Yesterday, Goldman Sachs (GS 204.16, +2.65) topped its earnings expectations, but its stock still finished 3.4% lower. Today, fellow Wall Street firm Morgan Stanley (MS 50.08, +2.01) significantly missed earnings expectations, but its stock finished 4% higher.
Morgan Stanley reported a loss of $3.61 per share for its fiscal fourth quarter, well short of analysts' expectations that called for a loss of $0.39 per share. The larger than expected loss was due to $5.7 billion in additional mortgage-related write-downs, bringing the company's total fourth quarter write-down to approximately $9.4 billion.
Investor disappointment was mitigated, however, after the investment bank said it sold a $5 billion stake to China Investment Corp. to further strengthen its capital position amid ongoing credit market turmoil and weakness in the financial sector.
While market participants were able to find an upside in Morgan Stanley's earnings report, the same cannot be said for earnings reports from General Mills (GIS 57.99, -1.08), homebuilder Hovnanian (HOV -0.96, 11.43%) and, Olive Garden operator Darden Restaurants (DRI 28.60, -7.74).
Standard & Poor's added to today's volatility after lowering its outlook on several bond insurers, which caused a steep decline in the indices around 11:30 ET. S&P affirmed its AAA rating on MBIA (MBI 27.02, -0.68) and Ambac (ABK 27.46, +0.48), but changed their outlook to negative. On Monday, Moody's also affirmed its highest rating on MBIA and Ambac, but stated Ambac's outlook was stable, while MBIA's was negative.
Also, Standard & Poor's cut its rating on ACA Capital to CCC from A. Before the rating change, The New York Times reported that several banks were talking about a possible bailout plan for ACA Capital.
Meanwhile, shares of student loan provider SLM Corp. (SLM 22.89, -5.98), known as Sallie Mae, got pummeled. During the company's shareholder meeting call, management seemed combative, and indicated that it may cut its dividend. A failed buyout of SLM earlier this year has taken a toll on its stock, which is down 60% since July.
Four sectors traded higher, with energy (+0.4%) leading the way for the second straight session. Financials (+0.1%) were providing leadership in morning trade, but managed to finish with only a slight gain following the headlines regarding the Standard and Poor's outlook on bond insurers. Telecom (-1.2%) was the main laggard.
Separately, the Federal Reserve released a press release regarding its Dec. 17 $20 billion 28-day credit auction results. The auction drew 93 financial institution, totaling $61.5 billion in bids. The Fed will lend the money at 4.65%, well above the 4.17% minimum bid set by the Fed and below the 4.75% discount rate. This auction is the first of four, which the Fed enacted in hopes to improve liquidity.
In commodities trading, crude oil (+$1.23 to $91.34) closed higher today after the Dept. of Energy said in its weekly report that inventories fell by a larger amount than most analysts expected. DJ30 -25.20 NASDAQ +4.98 NQ100 +0.1% R2K +0.3% SP400 -0.1% SP500 -1.98 NASDAQ Dec/Adv/Vol 1509/1485/1.86 bln NYSE Dec/Adv/Vol 1793/1391/1.23 bln
3:30 pm : The S&P and Dow fall back into the red. The Nasdaq is outperforming thanks to support from Research In Motion (RIMM 100.20, +1.51) and Apple (AAPL 183.63, +0.63). There has been a good deal of investor uncertainty as the markets trade in a seesaw manner.
After the close, Oracle (ORCL 20.80, -0.45) is set to report earnings. Tomorrow before the open, Bear Stearns (BSC 92.00, -0.59) is set to report its earnings.
DJ30 -11.14 NASDAQ +6.51 SP500 -0.42 NASDAQ Dec/Adv/Vol 1459/1539/1.50 bln NYSE Dec/Adv/Vol 1745/1438/1.01 bln
3:00 pm : The major indices add to their gains, but have recently dipped a bit. The Nasdaq Composite is trading near its intraday high, while the S&P and Dow have a way to go to make it back to their session highs.
The consumer discretionary (-0.6%) sector is the main laggard this session. Darden Restaurants (DRI 29.07, -7.28), which operates Olive Garden and Red Lobster, is playing a large role in the underperformance. The stock is down 20% after the company reported earnings of $0.42 per share, which fell short of the consensus estimate of $0.50. DJ30 +19.35 NASDAQ +9.40 SP500 +1.97 NASDAQ Dec/Adv/Vol 1494/1475/1.34 bln NYSE Dec/Adv/Vol 1760/1409/909 mln
2:30 pm : Stocks hit fresh intraday lows, and then rebound to slightly above the unchanged mark. There has not been a specific news item that accounts for the buying interest, but it has been led by the energy sector (+0.8%) and tech (+0.6%).
The Dow is split down the middle, with 15 components in the red and 15 in the green. The main laggards are McDonald's (MCD 108.12, -1.81), 3M (MMM 85.00, -0.85) and Walt Disney (DIS 32.38, -0.64). IBM (IBM 108.12, +1.81) Honeywell (HON 61.45, +0.86) and Altria (MO 76.73, +0.80) are providing leadership.
DJ30 +13.17 NASDAQ +8.11 SP500 +1.89 NASDAQ Dec/Adv/Vol 1551/1398/1.20 bln NYSE Dec/Adv/Vol 1929/1216/802 mln
2:00 pm : Stocks are off their lows, but remain near their worst level of the session. Bonds, meanwhile, are enjoying a surge in buying interest. The 10-year note is now up 23 ticks, sending its yield down to 4.03%.
The Dow Jones Transportation Average is struggling today, with all ten of its components in the red. Railroad Union Pacific Corp (UNP 123.24, -6.19) is the main drag after the company lowered its fourth quarter earnings guidance to $1.70-$1.80 per share, compared to its previous guidance of $1.90-$2.00. The consensus estimate was at $1.98 per share. The reduction in guidance primarily reflects rising diesel fuel costs and the corresponding lag in fuel surcharge recoveries. Fourth quarter diesel costs should average 34% higher year-over-year, raising costs by $200 million. The 2% rise in crude oil prices is not helping the Average either.DJ30 -59.42 DJTA -2.2% NASDAQ -9.25 SP500 -6.69 NASDAQ Dec/Adv/Vol 1670/1247/1.07 bln NYSE Dec/Adv/Vol 1931/1212/728 mln
1:35 pm : The stock market is trading near its worst levels of the session as buyers are unable to maintain any momentum.
Richmond Fed President Lacker said he is uncomfortable with the inflation picture, which has deteriorated since August. He said the central bank must keep overall inflation down, not just core inflation which excludes volatile energy and food items. Lacker notes that if energy prices fail to fall, monetary policy decisions in 2008 will be difficult. Crude oil is up 34% year-to-date.
Punk Ziegel notes that in light of Morgan Stanley's (MS 49.63, +1.56) first ever quarterly loss, and the company's complete breakdown in risk management, now is the time to be selling the stock. Investors appear to disagree, though, as the stock continues to trade significantly higher.DJ30 -63.24 NASDAQ -7.97 SP500 -6.61 NASDAQ Dec/Adv/Vol 1642/1273/999 mln NYSE Dec/Adv/Vol 1837/1302/686 mln
1:00 pm : After some choppy action, the stock market dips a bit from the previous update. The negative outlook on bond insurers at Standards & Poor's has weighed on stocks. It has, though, caused an increase in buying interest in Treasuries. The 10-year note is now up 8 ticks pushing its yield down to 4.09%.
The market breadth leans negative. On issues, decliners outpace advancers by a 17-to-14 margin on the NYSE. The Nasdaq comes in at 15-to-13 margin with decliners outpacing advancers. Volume is on the normal side.DJ30 -46.50 NASDAQ -2.11 SP500 -4.41 NASDAQ Dec/Adv/Vol 1654/1242/908 mln NYSE Dec/Adv/Vol 1837/1272/611 mln
12:30 pm : Selling pressure eases as the Nasdaq climbs to positive territory and the S&P and Dow pare their losses. Five of the ten sectors are now in the green, but remain well off their session highs.
During Morgan Stanley's (MS 49.66, +1.60) earnings call, the company said "results are embarrassing", but noted that all businesses other than fixed income did record business for the year. The company also said the $5 billion Chinese investment will help the company pursue global opportunities in this volatile market.
Meanwhile the Fed announced it is holding its next credit auction, also for $20 billion, tomorrow.DJ30 -27.48 NASDAQ +0.54 SP500 -2.75 NASDAQ Dec/Adv/Vol 1511/1336/811 mln NYSE Dec/Adv/Vol 1801/1285/549 mln
12:05 pm : Stocks spent most of the session in positive territory, as news of a $5 billion Chinese investment in a major Wall Street firm lifted the market. Stocks are trading modestly lower at midday, though, after Standard & Poor's cut its outlook on some bond insurers.
Stocks turned south around the same time Standard & Poor's cut its rating on bond insurer ACA Capital Holdings to CCC from A, and affirmed the AAA rating on MBIA (MBI 26.26, -1.44) and Ambac (ABK 26.20, -0.78), but changed their outlook to negative. On Monday, Moody's affirmed its highest rating on MBIA and Ambac, but stated Ambac's outlook was stable, while MBIA's was negative.
Morgan Stanley (MS 49.38, +1.33) reported a loss of $3.61 per share for its fiscal fourth quarter, well short of analysts' expectations that called for a loss of $0.39 per share. The larger than expected loss was due to $5.7 billion in additional mortgage-related write-downs, bringing the company's total fourth quarter write-down to approximately $9.4 billion.
Investor disappointment was mitigated, however, after the investment bank said it sold a $5 billion stake to China Investment Corp. to further strengthen its capital position amid ongoing credit market turmoil and weakness in the financial sector. News of the Chinese investment has sent the company's shares up 2.8%.
The market has had a more negative response to earnings reports from General Mills (GIS 57.60, -1.47) and homebuilder Hovnanian (HOV 7.58, -0.82).
General Mills reported strong second quarter results this morning, but included a forecast for 2008 that failed to meet analysts' expectations.
Hovnanian reported a net loss of $7.42 per share after getting hit hard by the U.S. housing slump. Analysts were expecting a much narrower loss of $1.49 per share. The earnings report has acted as a drag on the homebuilding group, down 1.8%.
Meanwhile, shares of student loan provider SLM Corp. (SLM 23.97, -4.94), known as Sallie Mae, are getting trampled. During the company's shareholder meeting call, management sounded combative, and did not say what investors wanted to hear.
Separately, the Federal Reserve released a press release of its Dec. 17 $20 billion 28-day credit auction results. The auction drew 93 financial institution bids, totaling $61.5 billion. The Fed will lend the money at 4.65%, well above the 4.17% minimum bid set by the Fed and below the 4.75% discount rate. This auction is the first of four, which the Fed enacted in hopes to improve liquidity.
There will be more news coming from the Fed today, when Richmond Fed President Lacker speaks on economic outlook at 1:00 ET.DJ30 -65.01 NASDAQ -7.84 SP500 -6.94 NASDAQ Dec/Adv/Vol 1511/1325/698 mln NYSE Dec/Adv/Vol 698 mln/1329/443 mln
11:35 am : Stocks retreat in a broad-based decline that sends the major indices modestly below the unchanged mark.
The turn south occurred around the same time that headlines stated Standard & Poor's is affirming the AAA rating on MBIA (MBI 25.91, -1.79) and Ambac (ABK 26.32, -0.66), but the outlook is now negative. On Monday, Moody's also affirmed its highest rating on the companies, but stated Ambac's outlook was stable, while MBIA's was negative.
Eight sectors are in the red, with financials (+0.2%) and energy (+0.03%) holding onto slight gains.DJ30 -42.03 NASDAQ -4.19 SP500 -4.98 NASDAQ Dec/Adv/Vol 1366/1419/579 mln NYSE Dec/Adv/Vol 1368/1660/371 mln
11:00 am : The stock market continues to sport modest gains, as financials (+1.7%) provide leadership.
Shares of student lender SLM Corp. (SLM 24.79, -4.08) are getting trampled. During the company's shareholder meeting call, management sounded combative, and did not say what investors wanted to hear.
Crude oil (+1.4% to $91.35) has made some gains after inventories fell by a larger than expected amount. The gain in oil, has provided support for the energy sector (+0.8%).DJ30 +38.29 NASDAQ +9.58 SP500 +6.13 NASDAQ Dec/Adv/Vol 1272/1452/436 mln NYSE Dec/Adv/Vol 1291/1660/268 mln
10:35 am : Stocks climbed higher shortly after the last update, but have since given back a portion of those gains. The financial sector (+1.5%) has climbed higher.
Just reported, the Dept. of Energy said crude oil inventories for the week ended Dec. 14 slipped by 7.59 million barrels. Analysts expected inventories to decline by 1.5 million barrels. Crude oil for February delivery was trading up 0.7% to $90.70 just prior to the announcement.
Meanwhile bonds have had some selling interest after the demand at the Fed's $20 billion auction was not as high as expected.DJ30 +30.81 NASDAQ +10.24 SP500 +6.05 NASDAQ Dec/Adv/Vol 1239/1393/308 mln NYSE Dec/Adv/Vol 1205/1698/187 mln
10:05 am : Stocks rebound into positive territory, led by a 0.9% gain in the financial sector. Seven of the ten economic sectors are now in positive territory.
The larger than expected loss from Morgan Stanley (MS 48.88, +0.87) does not appear to be weighing on sentiment, as investors send the company's shares 1.8% higher.
Just reported, the Fed's $20 billion auction drew a yield of 4.65%, which is slightly below the discount rate that currently stands at 4.75%. The stock and Treasury markets' response has been limited.DJ30 +29.94 NASDAQ +6.32 SP500 +3.49 NASDAQ Dec/Adv/Vol 1409/1049/124 mln
09:40 am : The major indices are mixed, but are basically clinging to the flat level as earnings from a major Wall Street firm dominates investors' attention.
Morgan Stanley (MS) reported a loss of $3.61 per share for its fiscal fourth quarter, short of analysts' expectations that called for a loss of $0.39 per share. The larger than expected loss was due to $5.7 billion in additional mortgage-related write-downs, bringing the company's total fourth quarter write-down to approximately $9.4 billion. Investor disappointment was mitigated, however, after the investment bank said it sold a $5 billion stake to China Investment Corp. to further strengthen its capital position amid ongoing credit market turmoil and weakness in the financial sector. DJ30 +5.53 NASDAQ -2.67 SP500 -0.42
09:14 am : S&P futures vs fair value: +1.2. Nasdaq futures vs fair value: -2.0.
08:59 am : S&P futures vs fair value: +0.2. Nasdaq futures vs fair value: -4.0. Futures trade continues to suggest a flat to slightly lower open for the stock market.
08:30 am : S&P futures vs fair value: -0.5. Nasdaq futures vs fair value: +0.3. Futures gain a few points, and now suggest a flat to slightly lower start. There are no economic releases today. The government’s weekly energy inventory report will be released at 10:30 ET. Crude oil for February delivery is trading up 0.1% to $90.19 ahead of the report.
08:01 am : S&P futures vs fair value: -3.8. Nasdaq futures vs fair value: -3.0. The futures market was pointing to a noticeably lower start, and then pared its losses after Morgan Stanley (MS) reported earnings, but eventually falls back near pre-report levels. Morgan Stanley reported a fourth quarter loss of $3.61. The First Call consensus estimate called for a loss of $0.39. The company had a total fourth quarter write-down of approximately $9.4 billion. Prior to the Morgan Stanley release, a sizable earnings miss from Darden Restaurants (DRI) tied to rising food costs and soft consumer spending, and a huge earnings miss from home builder Hovnanian (HOV) weighed on the futures market.
06:19 am : S&P futures vs fair value: -6.0. Nasdaq futures vs fair value: -7.8.
06:18 am : FTSE...6272.70...-6.60...-0.1%. DAX...7818.84...-31.90...-0.4%.
06:18 am : Nikkei...15030.51...-177.35...-1.2%. Hang Seng...27029.26...+296.39...+1.1%.
http://biz.yahoo.com/mu/update.html
4:20 pm : It was another whipsaw day of trading for the stock market on Wednesday, with several sizable gains and declines during the session. By the end of the trading day, the major indices were mixed with the Nasdaq closing slightly higher, and the S&P and Dow finishing slightly lower. There were no economic reports, but there was plenty of corporate and Federal Reserve news to keep the market occupied.
Yesterday, Goldman Sachs (GS 204.16, +2.65) topped its earnings expectations, but its stock still finished 3.4% lower. Today, fellow Wall Street firm Morgan Stanley (MS 50.08, +2.01) significantly missed earnings expectations, but its stock finished 4% higher.
Morgan Stanley reported a loss of $3.61 per share for its fiscal fourth quarter, well short of analysts' expectations that called for a loss of $0.39 per share. The larger than expected loss was due to $5.7 billion in additional mortgage-related write-downs, bringing the company's total fourth quarter write-down to approximately $9.4 billion.
Investor disappointment was mitigated, however, after the investment bank said it sold a $5 billion stake to China Investment Corp. to further strengthen its capital position amid ongoing credit market turmoil and weakness in the financial sector.
While market participants were able to find an upside in Morgan Stanley's earnings report, the same cannot be said for earnings reports from General Mills (GIS 57.99, -1.08), homebuilder Hovnanian (HOV -0.96, 11.43%) and, Olive Garden operator Darden Restaurants (DRI 28.60, -7.74).
Standard & Poor's added to today's volatility after lowering its outlook on several bond insurers, which caused a steep decline in the indices around 11:30 ET. S&P affirmed its AAA rating on MBIA (MBI 27.02, -0.68) and Ambac (ABK 27.46, +0.48), but changed their outlook to negative. On Monday, Moody's also affirmed its highest rating on MBIA and Ambac, but stated Ambac's outlook was stable, while MBIA's was negative.
Also, Standard & Poor's cut its rating on ACA Capital to CCC from A. Before the rating change, The New York Times reported that several banks were talking about a possible bailout plan for ACA Capital.
Meanwhile, shares of student loan provider SLM Corp. (SLM 22.89, -5.98), known as Sallie Mae, got pummeled. During the company's shareholder meeting call, management seemed combative, and indicated that it may cut its dividend. A failed buyout of SLM earlier this year has taken a toll on its stock, which is down 60% since July.
Four sectors traded higher, with energy (+0.4%) leading the way for the second straight session. Financials (+0.1%) were providing leadership in morning trade, but managed to finish with only a slight gain following the headlines regarding the Standard and Poor's outlook on bond insurers. Telecom (-1.2%) was the main laggard.
Separately, the Federal Reserve released a press release regarding its Dec. 17 $20 billion 28-day credit auction results. The auction drew 93 financial institution, totaling $61.5 billion in bids. The Fed will lend the money at 4.65%, well above the 4.17% minimum bid set by the Fed and below the 4.75% discount rate. This auction is the first of four, which the Fed enacted in hopes to improve liquidity.
In commodities trading, crude oil (+$1.23 to $91.34) closed higher today after the Dept. of Energy said in its weekly report that inventories fell by a larger amount than most analysts expected. DJ30 -25.20 NASDAQ +4.98 NQ100 +0.1% R2K +0.3% SP400 -0.1% SP500 -1.98 NASDAQ Dec/Adv/Vol 1509/1485/1.86 bln NYSE Dec/Adv/Vol 1793/1391/1.23 bln
3:30 pm : The S&P and Dow fall back into the red. The Nasdaq is outperforming thanks to support from Research In Motion (RIMM 100.20, +1.51) and Apple (AAPL 183.63, +0.63). There has been a good deal of investor uncertainty as the markets trade in a seesaw manner.
After the close, Oracle (ORCL 20.80, -0.45) is set to report earnings. Tomorrow before the open, Bear Stearns (BSC 92.00, -0.59) is set to report its earnings.
DJ30 -11.14 NASDAQ +6.51 SP500 -0.42 NASDAQ Dec/Adv/Vol 1459/1539/1.50 bln NYSE Dec/Adv/Vol 1745/1438/1.01 bln
3:00 pm : The major indices add to their gains, but have recently dipped a bit. The Nasdaq Composite is trading near its intraday high, while the S&P and Dow have a way to go to make it back to their session highs.
The consumer discretionary (-0.6%) sector is the main laggard this session. Darden Restaurants (DRI 29.07, -7.28), which operates Olive Garden and Red Lobster, is playing a large role in the underperformance. The stock is down 20% after the company reported earnings of $0.42 per share, which fell short of the consensus estimate of $0.50. DJ30 +19.35 NASDAQ +9.40 SP500 +1.97 NASDAQ Dec/Adv/Vol 1494/1475/1.34 bln NYSE Dec/Adv/Vol 1760/1409/909 mln
2:30 pm : Stocks hit fresh intraday lows, and then rebound to slightly above the unchanged mark. There has not been a specific news item that accounts for the buying interest, but it has been led by the energy sector (+0.8%) and tech (+0.6%).
The Dow is split down the middle, with 15 components in the red and 15 in the green. The main laggards are McDonald's (MCD 108.12, -1.81), 3M (MMM 85.00, -0.85) and Walt Disney (DIS 32.38, -0.64). IBM (IBM 108.12, +1.81) Honeywell (HON 61.45, +0.86) and Altria (MO 76.73, +0.80) are providing leadership.
DJ30 +13.17 NASDAQ +8.11 SP500 +1.89 NASDAQ Dec/Adv/Vol 1551/1398/1.20 bln NYSE Dec/Adv/Vol 1929/1216/802 mln
2:00 pm : Stocks are off their lows, but remain near their worst level of the session. Bonds, meanwhile, are enjoying a surge in buying interest. The 10-year note is now up 23 ticks, sending its yield down to 4.03%.
The Dow Jones Transportation Average is struggling today, with all ten of its components in the red. Railroad Union Pacific Corp (UNP 123.24, -6.19) is the main drag after the company lowered its fourth quarter earnings guidance to $1.70-$1.80 per share, compared to its previous guidance of $1.90-$2.00. The consensus estimate was at $1.98 per share. The reduction in guidance primarily reflects rising diesel fuel costs and the corresponding lag in fuel surcharge recoveries. Fourth quarter diesel costs should average 34% higher year-over-year, raising costs by $200 million. The 2% rise in crude oil prices is not helping the Average either.DJ30 -59.42 DJTA -2.2% NASDAQ -9.25 SP500 -6.69 NASDAQ Dec/Adv/Vol 1670/1247/1.07 bln NYSE Dec/Adv/Vol 1931/1212/728 mln
1:35 pm : The stock market is trading near its worst levels of the session as buyers are unable to maintain any momentum.
Richmond Fed President Lacker said he is uncomfortable with the inflation picture, which has deteriorated since August. He said the central bank must keep overall inflation down, not just core inflation which excludes volatile energy and food items. Lacker notes that if energy prices fail to fall, monetary policy decisions in 2008 will be difficult. Crude oil is up 34% year-to-date.
Punk Ziegel notes that in light of Morgan Stanley's (MS 49.63, +1.56) first ever quarterly loss, and the company's complete breakdown in risk management, now is the time to be selling the stock. Investors appear to disagree, though, as the stock continues to trade significantly higher.DJ30 -63.24 NASDAQ -7.97 SP500 -6.61 NASDAQ Dec/Adv/Vol 1642/1273/999 mln NYSE Dec/Adv/Vol 1837/1302/686 mln
1:00 pm : After some choppy action, the stock market dips a bit from the previous update. The negative outlook on bond insurers at Standards & Poor's has weighed on stocks. It has, though, caused an increase in buying interest in Treasuries. The 10-year note is now up 8 ticks pushing its yield down to 4.09%.
The market breadth leans negative. On issues, decliners outpace advancers by a 17-to-14 margin on the NYSE. The Nasdaq comes in at 15-to-13 margin with decliners outpacing advancers. Volume is on the normal side.DJ30 -46.50 NASDAQ -2.11 SP500 -4.41 NASDAQ Dec/Adv/Vol 1654/1242/908 mln NYSE Dec/Adv/Vol 1837/1272/611 mln
12:30 pm : Selling pressure eases as the Nasdaq climbs to positive territory and the S&P and Dow pare their losses. Five of the ten sectors are now in the green, but remain well off their session highs.
During Morgan Stanley's (MS 49.66, +1.60) earnings call, the company said "results are embarrassing", but noted that all businesses other than fixed income did record business for the year. The company also said the $5 billion Chinese investment will help the company pursue global opportunities in this volatile market.
Meanwhile the Fed announced it is holding its next credit auction, also for $20 billion, tomorrow.DJ30 -27.48 NASDAQ +0.54 SP500 -2.75 NASDAQ Dec/Adv/Vol 1511/1336/811 mln NYSE Dec/Adv/Vol 1801/1285/549 mln
12:05 pm : Stocks spent most of the session in positive territory, as news of a $5 billion Chinese investment in a major Wall Street firm lifted the market. Stocks are trading modestly lower at midday, though, after Standard & Poor's cut its outlook on some bond insurers.
Stocks turned south around the same time Standard & Poor's cut its rating on bond insurer ACA Capital Holdings to CCC from A, and affirmed the AAA rating on MBIA (MBI 26.26, -1.44) and Ambac (ABK 26.20, -0.78), but changed their outlook to negative. On Monday, Moody's affirmed its highest rating on MBIA and Ambac, but stated Ambac's outlook was stable, while MBIA's was negative.
Morgan Stanley (MS 49.38, +1.33) reported a loss of $3.61 per share for its fiscal fourth quarter, well short of analysts' expectations that called for a loss of $0.39 per share. The larger than expected loss was due to $5.7 billion in additional mortgage-related write-downs, bringing the company's total fourth quarter write-down to approximately $9.4 billion.
Investor disappointment was mitigated, however, after the investment bank said it sold a $5 billion stake to China Investment Corp. to further strengthen its capital position amid ongoing credit market turmoil and weakness in the financial sector. News of the Chinese investment has sent the company's shares up 2.8%.
The market has had a more negative response to earnings reports from General Mills (GIS 57.60, -1.47) and homebuilder Hovnanian (HOV 7.58, -0.82).
General Mills reported strong second quarter results this morning, but included a forecast for 2008 that failed to meet analysts' expectations.
Hovnanian reported a net loss of $7.42 per share after getting hit hard by the U.S. housing slump. Analysts were expecting a much narrower loss of $1.49 per share. The earnings report has acted as a drag on the homebuilding group, down 1.8%.
Meanwhile, shares of student loan provider SLM Corp. (SLM 23.97, -4.94), known as Sallie Mae, are getting trampled. During the company's shareholder meeting call, management sounded combative, and did not say what investors wanted to hear.
Separately, the Federal Reserve released a press release of its Dec. 17 $20 billion 28-day credit auction results. The auction drew 93 financial institution bids, totaling $61.5 billion. The Fed will lend the money at 4.65%, well above the 4.17% minimum bid set by the Fed and below the 4.75% discount rate. This auction is the first of four, which the Fed enacted in hopes to improve liquidity.
There will be more news coming from the Fed today, when Richmond Fed President Lacker speaks on economic outlook at 1:00 ET.DJ30 -65.01 NASDAQ -7.84 SP500 -6.94 NASDAQ Dec/Adv/Vol 1511/1325/698 mln NYSE Dec/Adv/Vol 698 mln/1329/443 mln
11:35 am : Stocks retreat in a broad-based decline that sends the major indices modestly below the unchanged mark.
The turn south occurred around the same time that headlines stated Standard & Poor's is affirming the AAA rating on MBIA (MBI 25.91, -1.79) and Ambac (ABK 26.32, -0.66), but the outlook is now negative. On Monday, Moody's also affirmed its highest rating on the companies, but stated Ambac's outlook was stable, while MBIA's was negative.
Eight sectors are in the red, with financials (+0.2%) and energy (+0.03%) holding onto slight gains.DJ30 -42.03 NASDAQ -4.19 SP500 -4.98 NASDAQ Dec/Adv/Vol 1366/1419/579 mln NYSE Dec/Adv/Vol 1368/1660/371 mln
11:00 am : The stock market continues to sport modest gains, as financials (+1.7%) provide leadership.
Shares of student lender SLM Corp. (SLM 24.79, -4.08) are getting trampled. During the company's shareholder meeting call, management sounded combative, and did not say what investors wanted to hear.
Crude oil (+1.4% to $91.35) has made some gains after inventories fell by a larger than expected amount. The gain in oil, has provided support for the energy sector (+0.8%).DJ30 +38.29 NASDAQ +9.58 SP500 +6.13 NASDAQ Dec/Adv/Vol 1272/1452/436 mln NYSE Dec/Adv/Vol 1291/1660/268 mln
10:35 am : Stocks climbed higher shortly after the last update, but have since given back a portion of those gains. The financial sector (+1.5%) has climbed higher.
Just reported, the Dept. of Energy said crude oil inventories for the week ended Dec. 14 slipped by 7.59 million barrels. Analysts expected inventories to decline by 1.5 million barrels. Crude oil for February delivery was trading up 0.7% to $90.70 just prior to the announcement.
Meanwhile bonds have had some selling interest after the demand at the Fed's $20 billion auction was not as high as expected.DJ30 +30.81 NASDAQ +10.24 SP500 +6.05 NASDAQ Dec/Adv/Vol 1239/1393/308 mln NYSE Dec/Adv/Vol 1205/1698/187 mln
10:05 am : Stocks rebound into positive territory, led by a 0.9% gain in the financial sector. Seven of the ten economic sectors are now in positive territory.
The larger than expected loss from Morgan Stanley (MS 48.88, +0.87) does not appear to be weighing on sentiment, as investors send the company's shares 1.8% higher.
Just reported, the Fed's $20 billion auction drew a yield of 4.65%, which is slightly below the discount rate that currently stands at 4.75%. The stock and Treasury markets' response has been limited.DJ30 +29.94 NASDAQ +6.32 SP500 +3.49 NASDAQ Dec/Adv/Vol 1409/1049/124 mln
09:40 am : The major indices are mixed, but are basically clinging to the flat level as earnings from a major Wall Street firm dominates investors' attention.
Morgan Stanley (MS) reported a loss of $3.61 per share for its fiscal fourth quarter, short of analysts' expectations that called for a loss of $0.39 per share. The larger than expected loss was due to $5.7 billion in additional mortgage-related write-downs, bringing the company's total fourth quarter write-down to approximately $9.4 billion. Investor disappointment was mitigated, however, after the investment bank said it sold a $5 billion stake to China Investment Corp. to further strengthen its capital position amid ongoing credit market turmoil and weakness in the financial sector. DJ30 +5.53 NASDAQ -2.67 SP500 -0.42
09:14 am : S&P futures vs fair value: +1.2. Nasdaq futures vs fair value: -2.0.
08:59 am : S&P futures vs fair value: +0.2. Nasdaq futures vs fair value: -4.0. Futures trade continues to suggest a flat to slightly lower open for the stock market.
08:30 am : S&P futures vs fair value: -0.5. Nasdaq futures vs fair value: +0.3. Futures gain a few points, and now suggest a flat to slightly lower start. There are no economic releases today. The government’s weekly energy inventory report will be released at 10:30 ET. Crude oil for February delivery is trading up 0.1% to $90.19 ahead of the report.
08:01 am : S&P futures vs fair value: -3.8. Nasdaq futures vs fair value: -3.0. The futures market was pointing to a noticeably lower start, and then pared its losses after Morgan Stanley (MS) reported earnings, but eventually falls back near pre-report levels. Morgan Stanley reported a fourth quarter loss of $3.61. The First Call consensus estimate called for a loss of $0.39. The company had a total fourth quarter write-down of approximately $9.4 billion. Prior to the Morgan Stanley release, a sizable earnings miss from Darden Restaurants (DRI) tied to rising food costs and soft consumer spending, and a huge earnings miss from home builder Hovnanian (HOV) weighed on the futures market.
06:19 am : S&P futures vs fair value: -6.0. Nasdaq futures vs fair value: -7.8.
06:18 am : FTSE...6272.70...-6.60...-0.1%. DAX...7818.84...-31.90...-0.4%.
06:18 am : Nikkei...15030.51...-177.35...-1.2%. Hang Seng...27029.26...+296.39...+1.1%.
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