AI
Thursday, December 20, 2007 8:01:42 PM
Market Update 071220
http://biz.yahoo.com/mu/update.html
4:20 pm : It was another roller coaster day of trading on Thursday. The S&P and Dow closed with modest gains after spending much of the day in the red, while the Nasdaq finished the day significantly higher, buoyed by a strong earnings report from Oracle (ORC 22.10, +1.34). The financial sector prevented the market from making further gains,though, as bond insurers once again came under scrutiny.
Shares of bond insurer MBIA (MBI 20.00, -7.02) plummeted 26% after the company said it has $30.6 billion in collateralized debt obligation exposure, much larger than many analysts previously thought. Yesterday, Standard & Poor's affirmed MBIA's AAA credit rating, and today said the company's CDO exposure was factored into that decision.
S&P's announcement, though, did little to help the stock, as some investors felt blindsided that the exposure was not previously disclosed. Adding to the company's woes, Fitch Ratings put MBIA on Rating Watch Negative because of the CDO exposure.
A number of companies reported earnings on Thursday, most of them better than expected.
Oracle played a pivotal role in the Nasdaq's outperformance after reporting stronger than expected earnings. Oracle earnings came in at $0.31 per share, topping estimates by $0.04.
Meanwhile, Nike (NKE 66.01, +2.21), Herman Miller (MLHR 32.05, +3.63), and Accenture (ACN 37.24, +2.28) all came in ahead of estimates.
It was just about a month ago that FedEx (FDX 93.63, -1.00) warned of an earnings shortfall for its second quarter and fiscal year. So, although FedEx beat the second quarter consensus estimate of $1.50 by four cents, the qualifier should be added that it beat the lowered consensus estimate. Also, the company issued futures earnings guidance below expectations, which helped send its shares lower.
Bear Stearns (BSC 91.42, +0.82) reported a huge loss of $6.90 per share due to mortgage-related losses, much higher than the $1.79 per share loss most analysts expected. It was Bear's first quarterly loss ever, according to reports. After some choppy trading, the market shrugged off the negative report, sending shares of the company higher.
Of the nine sectors that traded high, tech (+1.6%) provided leadership, thanks to strength in Oracle and Apple (AAPL 187.21, +4.09). Only the financial sector (-0.7%) finished lower.
There were several economic reports, although none had much of an impact on the stock market.
Third quarter real GDP was unchanged at a 4.9% annual growth rate. Core PCE rose 2.0% (consensuses +1.8%) quarter over quarter and the GDP Price Index rose 1.0% (consensus +0.9%). The report was just the final revision, so it did not have much of an impact on the market.
The weekly initial jobless claims for the week ended Dec. 15 rose to 346,000 from 335,000 the week before. The reading is not high enough to signal significant weakness in the labor market, just a modest worsening.
Leading Indicators dropped by 0.4%, slightly more than the expectation of a 0.3% drop. This report typically garners little market interest, as many of the indicators that make up the report have been previously released.
Lastly, the regional Fed survey for December manufacturing was a very disappointing -5.7. A reading below zero suggests a contraction in manufacturing. The New York survey released earlier this week had a more optimistic reading of 10.3. These are just regional surveys, and not too much emphasis should be placed on them, but a poor reading here raises red flags. DJ30 +38.37 NASDAQ +39.85 NQ100 +1.9% R2K +1.5% SP400 +1.2% SP500 +7.12 NASDAQ Dec/Adv/Vol 1124/1899/1.89 bln NYSE Dec/Adv/Vol 1434/1766/1.37 bln
3:35 pm : There is some choppy action as we head into the final half-hour of the trading session. Currently, the Dow is clutching to the flat line, while the S&P is posting slight gains. The Nasdaq is holding onto a significant advance.
Tomorrow, the Dept. of Commerce will release its November Personal Income and Consumption report. The report includes Core PCE, one of the Fed's favorite measures of inflation. Briefing.com expects a 0.5% gain in income and a 0.6% increase in spending. We expect core PCE to increase 0.2% to leave a larger 2.0% rise from a year ago.DJ30 +0.33 NASDAQ +28.94 SP500 +3.24 NASDAQ Dec/Adv/Vol 1311/1692/1.57 bln NYSE Dec/Adv/Vol 1714/1475/966 mln
3:00 pm : The major indices continued to climb higher and then stall a bit. The Nasdaq has extended its advance over the other major indices. The recent strength in equities has spurred some selling interest in Treasuries.
Meanwhile, the small-cap Russell 2000 Index is modestly outperforming the S&P 500, as is the S&P 500 MidCap Index. DJ30 +20.2 NASDAQ +27.07 R2K +0.6% SP400 +0.6% SP500 +2.87 NASDAQ Dec/Adv/Vol 1236/1725/1.40 bln NYSE Dec/Adv/Vol 1745/1428/883 mln
2:30 pm : Stocks are on the rise, with the Nasdaq Composite hitting fresh intraday highs thanks to strength in the tech sector (+1.6%). The Nasdaq has also outperformed this year, posting a 8.9% gain year-to-date, compared to the 2.7% gain in the S&P 500.
68 stocks in the Nasdaq 100 are trading higher. Heavy-weights Oracle (ORCL 22.22, +1.46), Microsoft (MSFT 35.48, +0.69) and Apple (AAPL 185.41, +2.29) are pacing the advance. The main laggards are Apollo Group (APOL 69.71, -2.28) and Paychex (37.05, -1.44%).DJ30 +30.98 NASDAQ +23.66 SP500 +4.23 NASDAQ Dec/Adv/Vol 1545/1391/1.24 bln NYSE Dec/Adv/Vol 1884/1296/813 mln
2:00 pm : After holding near the unchanged mark, stocks are back on the rise. The buying interest is broad-based, but there is relative strength in financials (-0.8%) as the sector pares the majority of its losses.
Large cap tech stocks are outperforming this session, as indicated by the 1.2% rise in the Nasdaq 100, compared to the smaller 0.8% rise in the broader Nasdaq composite.
The breadth of the market leans negative this session. Decliners outpace advances by a 19-to-12 margin on the NYSE, while the Nasdaq comes in at a closer 16-to-13 margin. New 52 week lows outpace new highs by 7-to-1. DJ30 +9.02 NASDAQ +20.91 SP500 +1.72 NASDAQ Dec/Adv/Vol 1654/1244/1.14 NYSE Dec/Adv/Vol 1914/1236/738 mln
1:30 pm : A swift pickup in buying interest sends the S&P 500 back into positive territory. The Nasdaq is approaching its best levels of the session.
Digital wireless company Qualcomm (QCOM 38.70, +0.42) is aiding in the Nasdaq's outperformance. In contrast to the tepid forecast provided in November, Qualcomm raised its guidance for the fiscal first quarter, citing better than expected shipments of its Mobile Station Modem chips. Based on the improved outlook, the company now anticipates earnings between $0.52 and $0.53 per share, versus a previous forecast of $0.50 to $0.52 per share, with revenues at the high end of the prior range of $2.3 billion to $2.4 billion. DJ30 -6.22 NASDAQ +18.84 SP500 +1.25 NASDAQ Dec/Adv/Vol 1713/1189/1.03 bln NYSE Dec/Adv/Vol 2020/1105/675 mln
1:00 pm : Stocks are trading in a relatively tight range near their worst levels of the session.
A CNBC reported commented that sources told him Merrill Lynch (MER 53.63, -1.10) may have $7 billion in new write-downs, in addition to Merrill's previous $8.4 billion write-down. He also noted Merrill has Collateral Debt Obligations (CDOs) from ACA Capital, which had its credit rating downgraded yesterday to CCC from AAA.
Meanwhile, a Fox-Pitt analyst predicted $8.6 billion in additional write-downs in the fourth quarter for Merrill.DJ30 -42.76 NASDAQ +7.14 SP500 -4.71 NASDAQ Dec/Adv/Vol 1700/1169/927 mln NYSE Dec/Adv/Vol 1968/1148/594 mln
12:30 pm : Reported at the top of the hour, the regional Philadelphia Fed survey for December manufacturing was a very disappointing -5.7. A reading below zero suggests retraction in manufacturing. The New York survey released earlier this week had a more optimistic reading of 10.3.
These are just regional surveys, and not too much emphasis should be placed on them, but a poor reading here raises red flags. The national ISM survey for December will be out in early January.
The market dipped to its worst level of the session shortly after the release, but has since recovered some. The indices continue to trade in mixed fashion.DJ30 -20.57 NASDAQ +12.47 SP500 -1.63 NASDAQ Dec/Adv/Vol 1728/1127/836 mln NYSE Dec/Adv/Vol 2022/1063/527 mln
12:00 pm : Stocks opened sharply higher, buoyed by a number of better than expected earnings reports from non-financial companies, but quickly fell as the financial sector took some steam out of the stock market. The S&P and Dow are currently in the red, although losses are slight. The Nasdaq is posting a modest gain, but is well off its opening high.
With regard to financials, Bear Stearns (BSC 89.53, -1.07) reported a huge loss of $6.90 per share due to mortgage-related losses, much higher than the $1.79 per share loss most analysts expected. It was Bear's first quarterly loss ever, according to reports. The stock was actually trading higher in the early-going, but eventually reversed as investors soured on some news regarding bond insurer MBIA (MBI 20.61, -6.41).
Shares of MBIA are down 24% after the company said it has $30.6 billion in collateralized debt obligations, much larger than analysts previously thought. Yesterday, Standard & Poor's affirmed MBIA's AAA credit rating, and today said the company's CDO exposure was factored into its decision. S&P's announcement, though, has done little to help the stock, as some investors feel blindsided that this was not previously disclosed.
Oracle (ORCL 22.22, +1.46) is keeping the Nasdaq in positive territory, and limiting the S&P 500's losses, after the company pleased investors with a stronger than expected earnings report. Oracle reported earnings of $0.31 per share, topping the estimate by $0.04 per share.
Meanwhile, Nike (NKE 67.02, +3.22 ), Herman Miller (MLHR 30.66, +2.24), and Accenture (ACN 37.14, +2.18) all came in ahead of estimates.
FedEx (FDX 93.25, -1.38) beat its fiscal second quarter earnings expectation, but its stock is lower after the company issued third quarter earnings guidance that was below the consensus estimate.
Seven of the ten economic sectors are trading lower, led by a 1.8% decline in financials. The tech sector (+0.8%) is providing leadership, thanks to strength in Oracle.
There were several economic reports, although none had much of an effect on the stock market.
Third quarter real GDP was unchanged a 4.9% annual growth rate. The report was just the final revision, so it did not have much of an impact on the market.
The weekly initial jobless claims for the week ended Dec. 15 rose to 346,000 from 335,000 the week before. The reading is not high enough to signal significant weakness in the labor market, just a modest worsening.
Lastly, Leading Indicators dropped by 0.4%, slightly more than the expectation of a 0.3% drop. This report typically garners little market interest, as many of the indicators that make up the report have been previously released. DJ30 -25.52 NASDAQ +9.04 SP500 -3.22 NASDAQ Dec/Adv/Vol 1617/1191/727 mln NYSE Dec/Adv/Vol 1879/1161/443 mln
11:30 am : After some choppy action, the stock market dips to its worst levels of the session, although losses remain modest. The Nasdaq is still in the green, but it is now only up 0.4%, compared to being up as much as 1% shortly after the opening bell.
Bear Stearns' (BSC 90.68, +0.08) CFO said he expects the company's 2008 revenue to be considerably higher than 2007, but likely less than 2006 revenue, according to Reuters.
DJ30 -23.96 NASDAQ +11.06 SP500 -2.62 NASDAQ Dec/Adv/Vol 1481/1285/612 mln NYSE Dec/Adv/Vol 1737/1268/366 mln
11:00 am : The stock market attempted to recover, but slips back into the red. The S&P and Dow are now posting slight losses. The Nasdaq is trading modestly higher, but is well off its session highs.
Standard & Poor's said that MBIA's (MBI 20.87, -6.15) $30.7 billion in CDO exposure was reflected in its analysis, according to Bloomberg. Yesterday, S&P held MBIA's credit at AAA, but lowered the company's outlook to negative. The news has not helped MBIA's stock, though, as it is still trading sharply lower.
Six sectors are now in the red, financials (-1.0%) continue to show the most weakness. Tech (+1.0%) is the only sector posting a decent gain, as the other sectors in the green are basically on the unchanged mark.DJ30 -5.04 NASDAQ -0.83 SP500 +14.87 NASDAQ Dec/Adv/Vol 1332/1379/480 mln NYSE Dec/Adv/Vol 1467/1472/272 mln
10:30 am : The financial sector (-0.9%) extends it losses, sending the S&P and Dow briefly into negative territory. Currently, the S&P and Dow are hovering slightly above the flat level, while the Nasdaq is still posting decent gains thanks to strength in the tech sector (+1.0%)
Bond insurer MBIA (MBI) is playing a large role in the financial sector's weakness after it said that it has $30.6 billion in collateralized debt obligations. Earlier this week, both Standard & Poor's and Moody's affirmed their highest credit rating on MBI, but cut their outlook to negative.
Weakness is broad-based within the sector, with 16 of its 19 groups in the red. The thrifts & mortgages (-5.3%) group is showing the most weakness, as it has year-to-date. The group is down more than 55% this year. DJ30 +9.22 NASDAQ +13.01 SP500 +0.87
10:00 am : Stocks slide, as financials are unable to hold their opening gains. The major indices are still in the green, but have pared a good portion off their earlier gains. Nine of the ten economic sectors are in the green, led by tech stocks (+1.1%). Financials (-0.5%) are the main laggards.
Just hitting the wires, November Leading Indicators dropped by 0.4%, compared to the consensus estimate that called for a decline of 0.3%. Despite the report's name, Leading Indicators, for the most part, is a compendium of previously announced economic indicators. Therefore, the report is extremely predictable and of very little interest to the market. Though this series does have some predictive qualities, it is a common criticism that it has predicted "nine of the last six" recessions.DJ30 +20.32 NASDAQ +17.21 SP500 +2.65 NASDAQ Dec/Adv/Vol 812/1553/114 mln
09:45 am : The major indices open higher, with the Nasdaq Composite pacing the advance.
Oracle (ORCL) is providing support to the Composite, after reporting fiscal second quarter earings of $0.31 per share, topping the consensus estimate by four cents.
Meanwhile, Bear Stearns (BSC) reported a huge loss of $6.90 per share, which was a much larger loss than what analysts expected. However, the market is shrugging off the poor results, sending the company's shares higher.DJ30 +50.62 NASDAQ +24.34 SP500 +8.17
09:15 am : S&P futures vs fair value: +10.8. Nasdaq futures vs fair value: +23.0. Futures climb higher, with the Nasdaq set to outperform. CNBC reported that Google's (GOOG) acquisition of Doubleclick was approved by the Federal Trade Commision.
08:58 am : S&P futures vs fair value: +7.7. Nasdaq futures vs fair value: +18.0. Futures continue to point to a higher start. There are two more economic reports today, November Leading Indicators at 10:00 ET, and the December Philadelphia Fed Index at 12:00 ET.
08:32 am : S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +16.0. Bear Stearns reports a sizeable loss of $6.90 per share, yet futures climb higher on the news. The consensus estimate called for a loss of $1.79. On the economic front, final third quarter GDP came in at the expected 4.9%. Final third quarter core PCE, an inflation measure, rose 2.0% quarter over quarter, higher than the expected 1.8% rise. Initial jobless claims for the week ended Dec. 15 came in at 346K, compared to the expectations of 335K claims. The futures market response was muted to the economic releases.
08:00 am : S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +9.8. Early indications suggest a slightly higher start for the S&P 500 and a modestly higher start for the Nasdaq in response to a number of earnings reports. Oracle is the biggest driver of the Nasdaq 100 futures after topping its earnings estimate of $0.27 by four cents. Meanwhile, FedEx beat its fiscal second quarter earnings expectation, but issued third quarter earnings guidance below the consensus estimate. Nike (NKE), Herman Miller (MLHR), and Accenture (ACN) all came in ahead of estimates
06:21 am : S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +8.0.
06:20 am : FTSE...6319.40...+34.90...+0.6%. DAX...7876.32...+39.00...+0.5%.
06:20 am : Nikkei...15031.60...+1.09...+0.0%. Hang Seng...27017.09...-12.17...-0.1%.
http://biz.yahoo.com/mu/update.html
4:20 pm : It was another roller coaster day of trading on Thursday. The S&P and Dow closed with modest gains after spending much of the day in the red, while the Nasdaq finished the day significantly higher, buoyed by a strong earnings report from Oracle (ORC 22.10, +1.34). The financial sector prevented the market from making further gains,though, as bond insurers once again came under scrutiny.
Shares of bond insurer MBIA (MBI 20.00, -7.02) plummeted 26% after the company said it has $30.6 billion in collateralized debt obligation exposure, much larger than many analysts previously thought. Yesterday, Standard & Poor's affirmed MBIA's AAA credit rating, and today said the company's CDO exposure was factored into that decision.
S&P's announcement, though, did little to help the stock, as some investors felt blindsided that the exposure was not previously disclosed. Adding to the company's woes, Fitch Ratings put MBIA on Rating Watch Negative because of the CDO exposure.
A number of companies reported earnings on Thursday, most of them better than expected.
Oracle played a pivotal role in the Nasdaq's outperformance after reporting stronger than expected earnings. Oracle earnings came in at $0.31 per share, topping estimates by $0.04.
Meanwhile, Nike (NKE 66.01, +2.21), Herman Miller (MLHR 32.05, +3.63), and Accenture (ACN 37.24, +2.28) all came in ahead of estimates.
It was just about a month ago that FedEx (FDX 93.63, -1.00) warned of an earnings shortfall for its second quarter and fiscal year. So, although FedEx beat the second quarter consensus estimate of $1.50 by four cents, the qualifier should be added that it beat the lowered consensus estimate. Also, the company issued futures earnings guidance below expectations, which helped send its shares lower.
Bear Stearns (BSC 91.42, +0.82) reported a huge loss of $6.90 per share due to mortgage-related losses, much higher than the $1.79 per share loss most analysts expected. It was Bear's first quarterly loss ever, according to reports. After some choppy trading, the market shrugged off the negative report, sending shares of the company higher.
Of the nine sectors that traded high, tech (+1.6%) provided leadership, thanks to strength in Oracle and Apple (AAPL 187.21, +4.09). Only the financial sector (-0.7%) finished lower.
There were several economic reports, although none had much of an impact on the stock market.
Third quarter real GDP was unchanged at a 4.9% annual growth rate. Core PCE rose 2.0% (consensuses +1.8%) quarter over quarter and the GDP Price Index rose 1.0% (consensus +0.9%). The report was just the final revision, so it did not have much of an impact on the market.
The weekly initial jobless claims for the week ended Dec. 15 rose to 346,000 from 335,000 the week before. The reading is not high enough to signal significant weakness in the labor market, just a modest worsening.
Leading Indicators dropped by 0.4%, slightly more than the expectation of a 0.3% drop. This report typically garners little market interest, as many of the indicators that make up the report have been previously released.
Lastly, the regional Fed survey for December manufacturing was a very disappointing -5.7. A reading below zero suggests a contraction in manufacturing. The New York survey released earlier this week had a more optimistic reading of 10.3. These are just regional surveys, and not too much emphasis should be placed on them, but a poor reading here raises red flags. DJ30 +38.37 NASDAQ +39.85 NQ100 +1.9% R2K +1.5% SP400 +1.2% SP500 +7.12 NASDAQ Dec/Adv/Vol 1124/1899/1.89 bln NYSE Dec/Adv/Vol 1434/1766/1.37 bln
3:35 pm : There is some choppy action as we head into the final half-hour of the trading session. Currently, the Dow is clutching to the flat line, while the S&P is posting slight gains. The Nasdaq is holding onto a significant advance.
Tomorrow, the Dept. of Commerce will release its November Personal Income and Consumption report. The report includes Core PCE, one of the Fed's favorite measures of inflation. Briefing.com expects a 0.5% gain in income and a 0.6% increase in spending. We expect core PCE to increase 0.2% to leave a larger 2.0% rise from a year ago.DJ30 +0.33 NASDAQ +28.94 SP500 +3.24 NASDAQ Dec/Adv/Vol 1311/1692/1.57 bln NYSE Dec/Adv/Vol 1714/1475/966 mln
3:00 pm : The major indices continued to climb higher and then stall a bit. The Nasdaq has extended its advance over the other major indices. The recent strength in equities has spurred some selling interest in Treasuries.
Meanwhile, the small-cap Russell 2000 Index is modestly outperforming the S&P 500, as is the S&P 500 MidCap Index. DJ30 +20.2 NASDAQ +27.07 R2K +0.6% SP400 +0.6% SP500 +2.87 NASDAQ Dec/Adv/Vol 1236/1725/1.40 bln NYSE Dec/Adv/Vol 1745/1428/883 mln
2:30 pm : Stocks are on the rise, with the Nasdaq Composite hitting fresh intraday highs thanks to strength in the tech sector (+1.6%). The Nasdaq has also outperformed this year, posting a 8.9% gain year-to-date, compared to the 2.7% gain in the S&P 500.
68 stocks in the Nasdaq 100 are trading higher. Heavy-weights Oracle (ORCL 22.22, +1.46), Microsoft (MSFT 35.48, +0.69) and Apple (AAPL 185.41, +2.29) are pacing the advance. The main laggards are Apollo Group (APOL 69.71, -2.28) and Paychex (37.05, -1.44%).DJ30 +30.98 NASDAQ +23.66 SP500 +4.23 NASDAQ Dec/Adv/Vol 1545/1391/1.24 bln NYSE Dec/Adv/Vol 1884/1296/813 mln
2:00 pm : After holding near the unchanged mark, stocks are back on the rise. The buying interest is broad-based, but there is relative strength in financials (-0.8%) as the sector pares the majority of its losses.
Large cap tech stocks are outperforming this session, as indicated by the 1.2% rise in the Nasdaq 100, compared to the smaller 0.8% rise in the broader Nasdaq composite.
The breadth of the market leans negative this session. Decliners outpace advances by a 19-to-12 margin on the NYSE, while the Nasdaq comes in at a closer 16-to-13 margin. New 52 week lows outpace new highs by 7-to-1. DJ30 +9.02 NASDAQ +20.91 SP500 +1.72 NASDAQ Dec/Adv/Vol 1654/1244/1.14 NYSE Dec/Adv/Vol 1914/1236/738 mln
1:30 pm : A swift pickup in buying interest sends the S&P 500 back into positive territory. The Nasdaq is approaching its best levels of the session.
Digital wireless company Qualcomm (QCOM 38.70, +0.42) is aiding in the Nasdaq's outperformance. In contrast to the tepid forecast provided in November, Qualcomm raised its guidance for the fiscal first quarter, citing better than expected shipments of its Mobile Station Modem chips. Based on the improved outlook, the company now anticipates earnings between $0.52 and $0.53 per share, versus a previous forecast of $0.50 to $0.52 per share, with revenues at the high end of the prior range of $2.3 billion to $2.4 billion. DJ30 -6.22 NASDAQ +18.84 SP500 +1.25 NASDAQ Dec/Adv/Vol 1713/1189/1.03 bln NYSE Dec/Adv/Vol 2020/1105/675 mln
1:00 pm : Stocks are trading in a relatively tight range near their worst levels of the session.
A CNBC reported commented that sources told him Merrill Lynch (MER 53.63, -1.10) may have $7 billion in new write-downs, in addition to Merrill's previous $8.4 billion write-down. He also noted Merrill has Collateral Debt Obligations (CDOs) from ACA Capital, which had its credit rating downgraded yesterday to CCC from AAA.
Meanwhile, a Fox-Pitt analyst predicted $8.6 billion in additional write-downs in the fourth quarter for Merrill.DJ30 -42.76 NASDAQ +7.14 SP500 -4.71 NASDAQ Dec/Adv/Vol 1700/1169/927 mln NYSE Dec/Adv/Vol 1968/1148/594 mln
12:30 pm : Reported at the top of the hour, the regional Philadelphia Fed survey for December manufacturing was a very disappointing -5.7. A reading below zero suggests retraction in manufacturing. The New York survey released earlier this week had a more optimistic reading of 10.3.
These are just regional surveys, and not too much emphasis should be placed on them, but a poor reading here raises red flags. The national ISM survey for December will be out in early January.
The market dipped to its worst level of the session shortly after the release, but has since recovered some. The indices continue to trade in mixed fashion.DJ30 -20.57 NASDAQ +12.47 SP500 -1.63 NASDAQ Dec/Adv/Vol 1728/1127/836 mln NYSE Dec/Adv/Vol 2022/1063/527 mln
12:00 pm : Stocks opened sharply higher, buoyed by a number of better than expected earnings reports from non-financial companies, but quickly fell as the financial sector took some steam out of the stock market. The S&P and Dow are currently in the red, although losses are slight. The Nasdaq is posting a modest gain, but is well off its opening high.
With regard to financials, Bear Stearns (BSC 89.53, -1.07) reported a huge loss of $6.90 per share due to mortgage-related losses, much higher than the $1.79 per share loss most analysts expected. It was Bear's first quarterly loss ever, according to reports. The stock was actually trading higher in the early-going, but eventually reversed as investors soured on some news regarding bond insurer MBIA (MBI 20.61, -6.41).
Shares of MBIA are down 24% after the company said it has $30.6 billion in collateralized debt obligations, much larger than analysts previously thought. Yesterday, Standard & Poor's affirmed MBIA's AAA credit rating, and today said the company's CDO exposure was factored into its decision. S&P's announcement, though, has done little to help the stock, as some investors feel blindsided that this was not previously disclosed.
Oracle (ORCL 22.22, +1.46) is keeping the Nasdaq in positive territory, and limiting the S&P 500's losses, after the company pleased investors with a stronger than expected earnings report. Oracle reported earnings of $0.31 per share, topping the estimate by $0.04 per share.
Meanwhile, Nike (NKE 67.02, +3.22 ), Herman Miller (MLHR 30.66, +2.24), and Accenture (ACN 37.14, +2.18) all came in ahead of estimates.
FedEx (FDX 93.25, -1.38) beat its fiscal second quarter earnings expectation, but its stock is lower after the company issued third quarter earnings guidance that was below the consensus estimate.
Seven of the ten economic sectors are trading lower, led by a 1.8% decline in financials. The tech sector (+0.8%) is providing leadership, thanks to strength in Oracle.
There were several economic reports, although none had much of an effect on the stock market.
Third quarter real GDP was unchanged a 4.9% annual growth rate. The report was just the final revision, so it did not have much of an impact on the market.
The weekly initial jobless claims for the week ended Dec. 15 rose to 346,000 from 335,000 the week before. The reading is not high enough to signal significant weakness in the labor market, just a modest worsening.
Lastly, Leading Indicators dropped by 0.4%, slightly more than the expectation of a 0.3% drop. This report typically garners little market interest, as many of the indicators that make up the report have been previously released. DJ30 -25.52 NASDAQ +9.04 SP500 -3.22 NASDAQ Dec/Adv/Vol 1617/1191/727 mln NYSE Dec/Adv/Vol 1879/1161/443 mln
11:30 am : After some choppy action, the stock market dips to its worst levels of the session, although losses remain modest. The Nasdaq is still in the green, but it is now only up 0.4%, compared to being up as much as 1% shortly after the opening bell.
Bear Stearns' (BSC 90.68, +0.08) CFO said he expects the company's 2008 revenue to be considerably higher than 2007, but likely less than 2006 revenue, according to Reuters.
DJ30 -23.96 NASDAQ +11.06 SP500 -2.62 NASDAQ Dec/Adv/Vol 1481/1285/612 mln NYSE Dec/Adv/Vol 1737/1268/366 mln
11:00 am : The stock market attempted to recover, but slips back into the red. The S&P and Dow are now posting slight losses. The Nasdaq is trading modestly higher, but is well off its session highs.
Standard & Poor's said that MBIA's (MBI 20.87, -6.15) $30.7 billion in CDO exposure was reflected in its analysis, according to Bloomberg. Yesterday, S&P held MBIA's credit at AAA, but lowered the company's outlook to negative. The news has not helped MBIA's stock, though, as it is still trading sharply lower.
Six sectors are now in the red, financials (-1.0%) continue to show the most weakness. Tech (+1.0%) is the only sector posting a decent gain, as the other sectors in the green are basically on the unchanged mark.DJ30 -5.04 NASDAQ -0.83 SP500 +14.87 NASDAQ Dec/Adv/Vol 1332/1379/480 mln NYSE Dec/Adv/Vol 1467/1472/272 mln
10:30 am : The financial sector (-0.9%) extends it losses, sending the S&P and Dow briefly into negative territory. Currently, the S&P and Dow are hovering slightly above the flat level, while the Nasdaq is still posting decent gains thanks to strength in the tech sector (+1.0%)
Bond insurer MBIA (MBI) is playing a large role in the financial sector's weakness after it said that it has $30.6 billion in collateralized debt obligations. Earlier this week, both Standard & Poor's and Moody's affirmed their highest credit rating on MBI, but cut their outlook to negative.
Weakness is broad-based within the sector, with 16 of its 19 groups in the red. The thrifts & mortgages (-5.3%) group is showing the most weakness, as it has year-to-date. The group is down more than 55% this year. DJ30 +9.22 NASDAQ +13.01 SP500 +0.87
10:00 am : Stocks slide, as financials are unable to hold their opening gains. The major indices are still in the green, but have pared a good portion off their earlier gains. Nine of the ten economic sectors are in the green, led by tech stocks (+1.1%). Financials (-0.5%) are the main laggards.
Just hitting the wires, November Leading Indicators dropped by 0.4%, compared to the consensus estimate that called for a decline of 0.3%. Despite the report's name, Leading Indicators, for the most part, is a compendium of previously announced economic indicators. Therefore, the report is extremely predictable and of very little interest to the market. Though this series does have some predictive qualities, it is a common criticism that it has predicted "nine of the last six" recessions.DJ30 +20.32 NASDAQ +17.21 SP500 +2.65 NASDAQ Dec/Adv/Vol 812/1553/114 mln
09:45 am : The major indices open higher, with the Nasdaq Composite pacing the advance.
Oracle (ORCL) is providing support to the Composite, after reporting fiscal second quarter earings of $0.31 per share, topping the consensus estimate by four cents.
Meanwhile, Bear Stearns (BSC) reported a huge loss of $6.90 per share, which was a much larger loss than what analysts expected. However, the market is shrugging off the poor results, sending the company's shares higher.DJ30 +50.62 NASDAQ +24.34 SP500 +8.17
09:15 am : S&P futures vs fair value: +10.8. Nasdaq futures vs fair value: +23.0. Futures climb higher, with the Nasdaq set to outperform. CNBC reported that Google's (GOOG) acquisition of Doubleclick was approved by the Federal Trade Commision.
08:58 am : S&P futures vs fair value: +7.7. Nasdaq futures vs fair value: +18.0. Futures continue to point to a higher start. There are two more economic reports today, November Leading Indicators at 10:00 ET, and the December Philadelphia Fed Index at 12:00 ET.
08:32 am : S&P futures vs fair value: +6.2. Nasdaq futures vs fair value: +16.0. Bear Stearns reports a sizeable loss of $6.90 per share, yet futures climb higher on the news. The consensus estimate called for a loss of $1.79. On the economic front, final third quarter GDP came in at the expected 4.9%. Final third quarter core PCE, an inflation measure, rose 2.0% quarter over quarter, higher than the expected 1.8% rise. Initial jobless claims for the week ended Dec. 15 came in at 346K, compared to the expectations of 335K claims. The futures market response was muted to the economic releases.
08:00 am : S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +9.8. Early indications suggest a slightly higher start for the S&P 500 and a modestly higher start for the Nasdaq in response to a number of earnings reports. Oracle is the biggest driver of the Nasdaq 100 futures after topping its earnings estimate of $0.27 by four cents. Meanwhile, FedEx beat its fiscal second quarter earnings expectation, but issued third quarter earnings guidance below the consensus estimate. Nike (NKE), Herman Miller (MLHR), and Accenture (ACN) all came in ahead of estimates
06:21 am : S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +8.0.
06:20 am : FTSE...6319.40...+34.90...+0.6%. DAX...7876.32...+39.00...+0.5%.
06:20 am : Nikkei...15031.60...+1.09...+0.0%. Hang Seng...27017.09...-12.17...-0.1%.
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