AI
Friday, December 21, 2007 7:10:11 PM
Market Update 071221
http://biz.yahoo.com/mu/update.html
4:20 pm : Christmas Eve is just around the corner, but the stock market was already in a festive mood on Friday as another strong earnings report from a leading technology company and a better than expected report on personal spending in November served as underpinnings for a broad-based rally.
All ten economic sectors closed the session higher. The gains were substantive, too, as the defensive-oriented utilities sector (+0.8%) was the only sector that gained less than 1.0%.
Research In Motion (RIMM 118.63, +11.64), the maker of the Blackberry, set the tone for a strong opening when it followed up an impressive earnings report from Oracle (ORCL 22.71, +0.61) with an impressive report and outlook of its own. The stock surged 11% and sparked a rally in other large-cap tech stocks that had the Nasdaq Composite in a leadership position all session on what was a quadruple witching options expiration day.
Consumer electronics retailer Circuit City (CC 4.75, -1.91) suffered a much different fate as it delivered an abysmal third quarter earnings report that left investors heading for the exit in droves. Its weakness didn't derail the consumer discretionary sector (+1.4%), though, as Circuit City's issues were deemed to be more company-specific than anything else in light of the strong report heard earlier in the week from competitor Best Buy (BBY 52.48, +0.81).
The energy (+2.4%) and materials (+2.4%) sectors were the biggest gainers Friday as the aforementioned spending report had participants feeling better about the economic growth outlook.
Specifically, personal consumption expenditures, which account for 72% of GDP, surged 1.1% in November and 0.5% after adjusting for inflation. The report substantiated the understanding that the consumer continues to spend in the face of macro headwinds and helped quell recession concerns for the time being. Cyclical stocks, accordingly, were among Friday's top performers.
The most influential gainer, however, was the financial sector. It jumped 2.0% as news that Merrill Lynch (MER 55.54, +1.04) might receive a $5 billion capital injection from a Singapore state-owned investment firm, and a report that plans for an SIV rescue fund were being abandoned due to a lack of interest, drove a belief that the worst of the credit crisis has past. That thinking has been proven wrong before, but on Friday, it was the prevailing belief.
The stock rally took some wind out of the Treasury market which suffered losses across the yield curve. The benchmark 10-year note fell nearly a point, which boosted its yield to 4.16%.
Advancing issues outpaced declining issues by a healthy margin at the NYSE and Nasdaq. Trading volume, meanwhile, was quite heavy on account of the expiration of stock options, index options, index futures, and single stock futures.DJ30 +205.01 NASDAQ +51.13 NQ100 +2.0% R2K +2.4% SP400 +1.6% SP500 +24.34 NASDAQ Dec/Adv/Vol 924/2104/2.57 bln NYSE Dec/Adv/Vol 824/2381/2.19 bln
3:30 pm : The stock market is trading at its intraday high as we head into the final half-hour of the trading week. It has been a rollercoaster trading week, but the major indices are set to finish with decent gains.
The Wall Street Journal is reporting that sources said that banks have scrapped plans to create a fund to bailout troubled Structured Investment Vehicles (SIV). Bank of America (BAC 41.50, +0.09), Citigroup (C 30.09, +0.20) and JPMorgan (JPM 43.90, +0.57) have been working since September to set up the fund, but lack of interest has led to the decision to drop the plan.
Next week, in observance of the Christmas holiday, the stock market closes early at 13:00 ET on Monday, and is closed on Tuesday.DJ30 +219.32 NASDAQ +46.81 SP500 +24.64 NASDAQ Dec/Adv/Vol 981/2004/1.93 bln NYSE Dec/Adv/Vol 853/2327/1.54 bln
3:00 pm : After heading sideways for most of the last half-hour, stocks are back on the rise as the major indices hit fresh intraday highs. All ten major sectors are posting a gain of at least 1%. The S&P 500 Retailing Index, which has struggled this year (down 21%), is posting a decent gain of 1.3%
Fitch Ratings confirmed that it has placed MBIA (MBI 19.74, -0.21) on rating watch negative, pending MBIA raising additional capital. Fitch said it anticipates affirming MBIA's ratings with a stable outlook if additional capital is raised within 4-6 weeks. MBIA, down 72% year-to-date, is one of many companies that have been rocked by the credit market turmoil this year.DJ30 +214.65 NASDAQ +45.31 SP500 +23.27 NASDAQ Dec/Adv/Vol 981/1987/1.82 bln NYSE Dec/Adv/Vol 889/2285/1.49 bln
2:30 pm : The major indices edge higher, led by relative strength in the energy sector (+2.4%). Crude oil has extended its gains, now up 2.8% to $93.65 per barrel.
29 of the 30 components in the Dow Jones Industrial average are trading higher. IBM (IBM 110.55, +1.71), 3M (MMM 85.12, +1.63) and Boeing (BA 89.67, +1.48) are leading the way. The only stock posting a loss is Honeywell (HON 60.64, -0.05), although it is basically flat.DJ30 +190.95 NASDAQ +41.05 SP500 +21.06 NASDAQ Dec/Adv/Vol 1016/1946/1.72 bln NYSE Dec/Adv/Vol 895/2272/1.41 bln
2:00 pm : The stock market is heading sideways. Trading has been pretty uneventful in afternoon trade. The breadth of the market is bullish, with advancers outpacing decliners by a 2.5-to-1 margin on the NYSE. The Nasdaq comes in at a smaller 1.8-to-1 margin.
Bear Stearns (BSC 89.23, -2.19) is a notable laggard on a day when investment banks & brokerages are up 2.7%. Fitch Ratings said that its credit rating outlook on Bear remains negative, according to the AP. Yesterday, Bear reported a much larger loss than expected, but its stock still closed higher.
Meanwhile, a CNBC commentator said sources are telling him Bear is in talks to receive an additional capital infusion from Fortress Investment Group.DJ30 +166.80 NASDAQ +37.14 SP500 +18.12 NASDAQ Dec/Adv/Vol 1054/1882/1.61 bln NYSE Dec/Adv/Vol 930/2220/1.35 bln
1:30 pm : The stock market is holding steady. After a burst of trading volume in the early-going, volume has tapered off, but should pick up toward the close due to more expirations. Despite the decrease in volume in afternoon trade, the NYSE is approaching yesterday's total trade of 1.37 billion shares.
There is more bad news regarding bond insurers today, although it does not appear to be affecting the market as much as yesterday. Fitch Ratings is putting Ambac's (ABK 26.55, -1.15) credit ratings under review due to the company's $32.2 billion in exposure to collateralized debt obligation, according to Bloomberg.com.DJ30 +160.71 NASDAQ +34.24 SP500 +17.19 NASDAQ Dec/Adv/Vol 1020/1892/1.54 bln NYSE Dec/Adv/Vol 919/2210/1.30 bln
1:00 pm : The market continues to sport some nice-sized gains, underpinned by strength in the materials (+1.9%), industrial (+1.8%), telecom (+1.7%), and technology (+1.0%) sectors.
Looking within the market, we notice that small-cap stocks are outperforming today. The Russell 2000 is up 1.5% versus a gain of 1.2% for the Russell 1000. There is a trading phenomenon that has been labeled the "January Effect," which has its roots in mid-December and is characterized by small-cap issues outperforming large-cap stocks through a good portion of the first half of a new year.
The outperformance, when it happens, tends to be the strongest in January; hence, the January Effect moniker. There are no guarantees this trading pattern will play out each year, but thus far, we have seen some vestiges of it as the Russell 2000 is up 5.5% since Monday's close versus a gain of 2.2% for the Russell 1000 over the same period.DJ30 +156.64 NASDAQ +33.30 SP500 +17.01 NASDAQ Dec/Adv/Vol 1020/1869/1.44 bln NYSE Dec/Adv/Vol 869/2255/1.24 bln
12:30 pm : Equites are holding steady, modestly below their intraday highs. The same can not be said for bonds, which have slipped. The 10-year is now down 27 ticks, pushing its yield up to 4.15%
Shares of Walgreen (WAG 38.74, +2.49) are up nearly 7% after the company pleased investors by producing better than expected earnings results for its fiscal first quarter. Walgreen's earned $0.02 per share, topping the consensus estimate by two cents. Comparable same-store sales were up 5.4%.DJ30 +166.97 NASDAQ +35.29 SP500 +18.04 NASDAQ Dec/Adv/Vol 991/1866/1.36 bln NYSE Dec/Adv/Vol 845/2244/1.16 bln
12:00 pm : Stocks are trading considerably higher at the East Coast lunch hour, fueled by a better than expected earnings report from Research In Motion (RIMM 119.22, +12.23), speculation about a Merrill Lynch (MER 55.23, +0.73) cash infusion and a economic report that indicates strong consumer spending.
Research In Motion, the maker of BlackBerry devices, boosted sentiment after last night reporting earnings of $0.63 per share, nearly double year ago earnings and topping the consensus estimate by a penny.
Also giving the market a lift, a Wall Street Journal article states that Merrill Lynch is in advanced talks to receive a $5 billion cash infusion from a state-owned Singapore investment fund. The stock is off its highs, but is still posting a respectable 1.3% gain on the news. Other financial firms have recently announced investments from overseas government owned funds, including Citigroup (C 30.13, +0.24), UBS (UBS 44.90, -0.41) and Morgan Stanley (MS 53.77, +2.40).
The Dept. of Commerce released its November Personal Income and Consumption report. Personal spending rose a strong 1.1%, well above the 0.7% expected increase. Adjusted for inflation spending still rose 0.5%, which is solid considering the headwinds the overall economy is currently facing. This indicator important as consumer spending accounts for 72% of the GDP.
Meanwhile, the report indicated personal income rose 0.4%, slightly less than the consensus estimate that called for a 0.5% rise. Core PCE, the Fed's favorite measure of inflation, rose 0.2%, which was in-line with expectations.
Most importantly, this report does not indicate any sign of a recession.
All ten economic sectors are trading higher, led by materials (+2.0%), and energy (+2.0%). Financials (+0.6%), the only sector to finish in the red yesterday, are underperforming on a relative basis. DJ30 +164.28 NASDAQ +32.32 SP500 +17.07 NASDAQ Dec/Adv/Vol 939/1880/1.23 bln NYSE Dec/Adv/Vol 767/2298/1.08 bln
11:30 am : The major indices are vacillating near their best levels of the session, as they continue to post strong gains. Yesterday, the three major indices all finished in the green, but only the Nasdaq managed to close with a significant gain, buoyed by a strong earnings report from Oracle (ORCL 22.50, +0.40)
Shares of Circuit City (CC 5.04, -1.62) are getting stomped today, as investors show disappointment following the retailer's weak earnings report. Excluding non-recurring items, the company's loss amounted to $0.64 per share, well below Wall Street's expectations that called for a loss of $0.31. The results are in contrast to competitor Best Buy's (BBY 52.63, +0.96) better than expected earnings.DJ30 +175.18 NASDAQ +34.12 SP500 +18.10 NASDAQ Dec/Adv/Vol 883/1915/1.12 bln NYSE Dec/Adv/Vol 707/2332/1.03 bln
11:05 am : Stocks ease a bit, as they trade slightly below their best levels of the session. All three major indices have advanced at least 1%. With today's gains, the major indices are set to finish the week in the green.
The energy sector (+2.0%) has sprung into the leadership position, aided by a 1.5% rise in the price of crude oil.
Meanwhile, Treasuries have been under selling pressure. The 10-year is down 10 ticks, sending its yield up to 4.10%.DJ30 +157.54 NASDAQ +33.75 SP500 +17.35 NASDAQ Dec/Adv/Vol 826/1942/969 mln NYSE Dec/Adv/Vol 694/2322/935 mln
10:30 am : Stocks extend their gains after the Fed releases the results of its second $20 billion auction.
The auction had 73 institutional bidders, and resulted in a yield of 4.67%. This yield is well above the 4.17% minimum the Fed put in place, but below the 4.75% discount rate that banks would normally have to borrow at. Also, the Fed announced it plans to continue biweekly auctions as long as necessary to alleviate pressures in short term funding markets. Originally, the Fed only planned four auctions.
Volume is noticeably higher today, fueled by "quadruple witching." Quadruple witching is the quarterly expiration of stock options, index options, index futures and single stock futures. Typically, this event typically increases volume and volatility as traders decide what to do with their positions.DJ30 +170.89 NASDAQ +36.63 SP500 +19.21 NASDAQ Dec/Adv/Vol 749/1881/769 mln NYSE Dec/Adv/Vol 606/2274/773 mln
10:00 am : Stocks are posting large gains, with all ten economic sectors in positive territory.
The advance is being fueled by a strong earnings report from Blackberry maker Research In Motion (RIMM 119.55, +12.56) and a Wall Street Journal report that indicates Merrill Lynch (MER 56.05, +1.55) may receive a $5 billion cash infusion from a state-owned Singapore investment firm.
Six sectors are posting a gain in excess of 1%, led by materials (+1.4%) and telecom (+1.4%). Healthcare, up 0.6%, is the main laggard.
DJ30 +140.47 NASDAQ +34.48 SP500 +16.80 NASDAQ Dec/Adv/Vol 560/1884/594 mln
09:14 am : S&P futures vs fair value: +17.5. Nasdaq futures vs fair value: +31.0.
09:00 am : S&P futures vs fair value: +16.0. Nasdaq futures vs fair value: +27.0. The futures market is holding onto its post-economic data gain. Investors have not been pleased with Circuit City’s (CC) results. The stock is down nearly 20% in pre-market trading, but its market cap is small enough not to have much of an effect on the broader market.
08:31 am : S&P futures vs fair value: +16.3. Nasdaq futures vs fair value: +24.8. Futures gain a few points immediately following the Personal Income and Consumption report. Recently reported by the Dept. of Commerce, November income rose 0.4%, spending rose 1.1% and core-PCE increased 0.2%. Economists expected a 0.5% increase for income, a 0.7% increase for spending, and a 0.2% increase for core-PCE, which is the Fed's favored inflation indicator. In earnings news, Walgreens (WAG) topped expectations, while Circuit City (CC) posted a larger loss than expected.
07:58 am : S&P futures vs fair value: +14.3. Nasdaq futures vs fair value: +20.0. A considerably higher open is expected. Two news items, in particular, are behind the bullish bias. The first is Research In Motion's (RIMM) better than expected third quarter earnings report and fourth quarter guidance. The second item is a Wall Street Journal report that Merrill Lynch (MER) may be on the verge of receiving a $5 billion cash infusion from Temasek Holdings, a state-owned Singapore investment firm. As a reminder, today is a quadruple witching options expiration day with stock options, index options, index futures and single stock futures due to expire. Trading volume should be heavy as a result.
06:20 am : FTSE...6426.60...+81.00...+1.3%. DAX...7994.19...+125.00...+1.6%.
06:20 am : S&P futures vs fair value: +13.9. Nasdaq futures vs fair value: +24.3.
06:20 am : Nikkei...15257.00...+225.40...+1.5%. Hang Seng...27626.92...+609.83...+2.3%.
http://biz.yahoo.com/mu/update.html
4:20 pm : Christmas Eve is just around the corner, but the stock market was already in a festive mood on Friday as another strong earnings report from a leading technology company and a better than expected report on personal spending in November served as underpinnings for a broad-based rally.
All ten economic sectors closed the session higher. The gains were substantive, too, as the defensive-oriented utilities sector (+0.8%) was the only sector that gained less than 1.0%.
Research In Motion (RIMM 118.63, +11.64), the maker of the Blackberry, set the tone for a strong opening when it followed up an impressive earnings report from Oracle (ORCL 22.71, +0.61) with an impressive report and outlook of its own. The stock surged 11% and sparked a rally in other large-cap tech stocks that had the Nasdaq Composite in a leadership position all session on what was a quadruple witching options expiration day.
Consumer electronics retailer Circuit City (CC 4.75, -1.91) suffered a much different fate as it delivered an abysmal third quarter earnings report that left investors heading for the exit in droves. Its weakness didn't derail the consumer discretionary sector (+1.4%), though, as Circuit City's issues were deemed to be more company-specific than anything else in light of the strong report heard earlier in the week from competitor Best Buy (BBY 52.48, +0.81).
The energy (+2.4%) and materials (+2.4%) sectors were the biggest gainers Friday as the aforementioned spending report had participants feeling better about the economic growth outlook.
Specifically, personal consumption expenditures, which account for 72% of GDP, surged 1.1% in November and 0.5% after adjusting for inflation. The report substantiated the understanding that the consumer continues to spend in the face of macro headwinds and helped quell recession concerns for the time being. Cyclical stocks, accordingly, were among Friday's top performers.
The most influential gainer, however, was the financial sector. It jumped 2.0% as news that Merrill Lynch (MER 55.54, +1.04) might receive a $5 billion capital injection from a Singapore state-owned investment firm, and a report that plans for an SIV rescue fund were being abandoned due to a lack of interest, drove a belief that the worst of the credit crisis has past. That thinking has been proven wrong before, but on Friday, it was the prevailing belief.
The stock rally took some wind out of the Treasury market which suffered losses across the yield curve. The benchmark 10-year note fell nearly a point, which boosted its yield to 4.16%.
Advancing issues outpaced declining issues by a healthy margin at the NYSE and Nasdaq. Trading volume, meanwhile, was quite heavy on account of the expiration of stock options, index options, index futures, and single stock futures.DJ30 +205.01 NASDAQ +51.13 NQ100 +2.0% R2K +2.4% SP400 +1.6% SP500 +24.34 NASDAQ Dec/Adv/Vol 924/2104/2.57 bln NYSE Dec/Adv/Vol 824/2381/2.19 bln
3:30 pm : The stock market is trading at its intraday high as we head into the final half-hour of the trading week. It has been a rollercoaster trading week, but the major indices are set to finish with decent gains.
The Wall Street Journal is reporting that sources said that banks have scrapped plans to create a fund to bailout troubled Structured Investment Vehicles (SIV). Bank of America (BAC 41.50, +0.09), Citigroup (C 30.09, +0.20) and JPMorgan (JPM 43.90, +0.57) have been working since September to set up the fund, but lack of interest has led to the decision to drop the plan.
Next week, in observance of the Christmas holiday, the stock market closes early at 13:00 ET on Monday, and is closed on Tuesday.DJ30 +219.32 NASDAQ +46.81 SP500 +24.64 NASDAQ Dec/Adv/Vol 981/2004/1.93 bln NYSE Dec/Adv/Vol 853/2327/1.54 bln
3:00 pm : After heading sideways for most of the last half-hour, stocks are back on the rise as the major indices hit fresh intraday highs. All ten major sectors are posting a gain of at least 1%. The S&P 500 Retailing Index, which has struggled this year (down 21%), is posting a decent gain of 1.3%
Fitch Ratings confirmed that it has placed MBIA (MBI 19.74, -0.21) on rating watch negative, pending MBIA raising additional capital. Fitch said it anticipates affirming MBIA's ratings with a stable outlook if additional capital is raised within 4-6 weeks. MBIA, down 72% year-to-date, is one of many companies that have been rocked by the credit market turmoil this year.DJ30 +214.65 NASDAQ +45.31 SP500 +23.27 NASDAQ Dec/Adv/Vol 981/1987/1.82 bln NYSE Dec/Adv/Vol 889/2285/1.49 bln
2:30 pm : The major indices edge higher, led by relative strength in the energy sector (+2.4%). Crude oil has extended its gains, now up 2.8% to $93.65 per barrel.
29 of the 30 components in the Dow Jones Industrial average are trading higher. IBM (IBM 110.55, +1.71), 3M (MMM 85.12, +1.63) and Boeing (BA 89.67, +1.48) are leading the way. The only stock posting a loss is Honeywell (HON 60.64, -0.05), although it is basically flat.DJ30 +190.95 NASDAQ +41.05 SP500 +21.06 NASDAQ Dec/Adv/Vol 1016/1946/1.72 bln NYSE Dec/Adv/Vol 895/2272/1.41 bln
2:00 pm : The stock market is heading sideways. Trading has been pretty uneventful in afternoon trade. The breadth of the market is bullish, with advancers outpacing decliners by a 2.5-to-1 margin on the NYSE. The Nasdaq comes in at a smaller 1.8-to-1 margin.
Bear Stearns (BSC 89.23, -2.19) is a notable laggard on a day when investment banks & brokerages are up 2.7%. Fitch Ratings said that its credit rating outlook on Bear remains negative, according to the AP. Yesterday, Bear reported a much larger loss than expected, but its stock still closed higher.
Meanwhile, a CNBC commentator said sources are telling him Bear is in talks to receive an additional capital infusion from Fortress Investment Group.DJ30 +166.80 NASDAQ +37.14 SP500 +18.12 NASDAQ Dec/Adv/Vol 1054/1882/1.61 bln NYSE Dec/Adv/Vol 930/2220/1.35 bln
1:30 pm : The stock market is holding steady. After a burst of trading volume in the early-going, volume has tapered off, but should pick up toward the close due to more expirations. Despite the decrease in volume in afternoon trade, the NYSE is approaching yesterday's total trade of 1.37 billion shares.
There is more bad news regarding bond insurers today, although it does not appear to be affecting the market as much as yesterday. Fitch Ratings is putting Ambac's (ABK 26.55, -1.15) credit ratings under review due to the company's $32.2 billion in exposure to collateralized debt obligation, according to Bloomberg.com.DJ30 +160.71 NASDAQ +34.24 SP500 +17.19 NASDAQ Dec/Adv/Vol 1020/1892/1.54 bln NYSE Dec/Adv/Vol 919/2210/1.30 bln
1:00 pm : The market continues to sport some nice-sized gains, underpinned by strength in the materials (+1.9%), industrial (+1.8%), telecom (+1.7%), and technology (+1.0%) sectors.
Looking within the market, we notice that small-cap stocks are outperforming today. The Russell 2000 is up 1.5% versus a gain of 1.2% for the Russell 1000. There is a trading phenomenon that has been labeled the "January Effect," which has its roots in mid-December and is characterized by small-cap issues outperforming large-cap stocks through a good portion of the first half of a new year.
The outperformance, when it happens, tends to be the strongest in January; hence, the January Effect moniker. There are no guarantees this trading pattern will play out each year, but thus far, we have seen some vestiges of it as the Russell 2000 is up 5.5% since Monday's close versus a gain of 2.2% for the Russell 1000 over the same period.DJ30 +156.64 NASDAQ +33.30 SP500 +17.01 NASDAQ Dec/Adv/Vol 1020/1869/1.44 bln NYSE Dec/Adv/Vol 869/2255/1.24 bln
12:30 pm : Equites are holding steady, modestly below their intraday highs. The same can not be said for bonds, which have slipped. The 10-year is now down 27 ticks, pushing its yield up to 4.15%
Shares of Walgreen (WAG 38.74, +2.49) are up nearly 7% after the company pleased investors by producing better than expected earnings results for its fiscal first quarter. Walgreen's earned $0.02 per share, topping the consensus estimate by two cents. Comparable same-store sales were up 5.4%.DJ30 +166.97 NASDAQ +35.29 SP500 +18.04 NASDAQ Dec/Adv/Vol 991/1866/1.36 bln NYSE Dec/Adv/Vol 845/2244/1.16 bln
12:00 pm : Stocks are trading considerably higher at the East Coast lunch hour, fueled by a better than expected earnings report from Research In Motion (RIMM 119.22, +12.23), speculation about a Merrill Lynch (MER 55.23, +0.73) cash infusion and a economic report that indicates strong consumer spending.
Research In Motion, the maker of BlackBerry devices, boosted sentiment after last night reporting earnings of $0.63 per share, nearly double year ago earnings and topping the consensus estimate by a penny.
Also giving the market a lift, a Wall Street Journal article states that Merrill Lynch is in advanced talks to receive a $5 billion cash infusion from a state-owned Singapore investment fund. The stock is off its highs, but is still posting a respectable 1.3% gain on the news. Other financial firms have recently announced investments from overseas government owned funds, including Citigroup (C 30.13, +0.24), UBS (UBS 44.90, -0.41) and Morgan Stanley (MS 53.77, +2.40).
The Dept. of Commerce released its November Personal Income and Consumption report. Personal spending rose a strong 1.1%, well above the 0.7% expected increase. Adjusted for inflation spending still rose 0.5%, which is solid considering the headwinds the overall economy is currently facing. This indicator important as consumer spending accounts for 72% of the GDP.
Meanwhile, the report indicated personal income rose 0.4%, slightly less than the consensus estimate that called for a 0.5% rise. Core PCE, the Fed's favorite measure of inflation, rose 0.2%, which was in-line with expectations.
Most importantly, this report does not indicate any sign of a recession.
All ten economic sectors are trading higher, led by materials (+2.0%), and energy (+2.0%). Financials (+0.6%), the only sector to finish in the red yesterday, are underperforming on a relative basis. DJ30 +164.28 NASDAQ +32.32 SP500 +17.07 NASDAQ Dec/Adv/Vol 939/1880/1.23 bln NYSE Dec/Adv/Vol 767/2298/1.08 bln
11:30 am : The major indices are vacillating near their best levels of the session, as they continue to post strong gains. Yesterday, the three major indices all finished in the green, but only the Nasdaq managed to close with a significant gain, buoyed by a strong earnings report from Oracle (ORCL 22.50, +0.40)
Shares of Circuit City (CC 5.04, -1.62) are getting stomped today, as investors show disappointment following the retailer's weak earnings report. Excluding non-recurring items, the company's loss amounted to $0.64 per share, well below Wall Street's expectations that called for a loss of $0.31. The results are in contrast to competitor Best Buy's (BBY 52.63, +0.96) better than expected earnings.DJ30 +175.18 NASDAQ +34.12 SP500 +18.10 NASDAQ Dec/Adv/Vol 883/1915/1.12 bln NYSE Dec/Adv/Vol 707/2332/1.03 bln
11:05 am : Stocks ease a bit, as they trade slightly below their best levels of the session. All three major indices have advanced at least 1%. With today's gains, the major indices are set to finish the week in the green.
The energy sector (+2.0%) has sprung into the leadership position, aided by a 1.5% rise in the price of crude oil.
Meanwhile, Treasuries have been under selling pressure. The 10-year is down 10 ticks, sending its yield up to 4.10%.DJ30 +157.54 NASDAQ +33.75 SP500 +17.35 NASDAQ Dec/Adv/Vol 826/1942/969 mln NYSE Dec/Adv/Vol 694/2322/935 mln
10:30 am : Stocks extend their gains after the Fed releases the results of its second $20 billion auction.
The auction had 73 institutional bidders, and resulted in a yield of 4.67%. This yield is well above the 4.17% minimum the Fed put in place, but below the 4.75% discount rate that banks would normally have to borrow at. Also, the Fed announced it plans to continue biweekly auctions as long as necessary to alleviate pressures in short term funding markets. Originally, the Fed only planned four auctions.
Volume is noticeably higher today, fueled by "quadruple witching." Quadruple witching is the quarterly expiration of stock options, index options, index futures and single stock futures. Typically, this event typically increases volume and volatility as traders decide what to do with their positions.DJ30 +170.89 NASDAQ +36.63 SP500 +19.21 NASDAQ Dec/Adv/Vol 749/1881/769 mln NYSE Dec/Adv/Vol 606/2274/773 mln
10:00 am : Stocks are posting large gains, with all ten economic sectors in positive territory.
The advance is being fueled by a strong earnings report from Blackberry maker Research In Motion (RIMM 119.55, +12.56) and a Wall Street Journal report that indicates Merrill Lynch (MER 56.05, +1.55) may receive a $5 billion cash infusion from a state-owned Singapore investment firm.
Six sectors are posting a gain in excess of 1%, led by materials (+1.4%) and telecom (+1.4%). Healthcare, up 0.6%, is the main laggard.
DJ30 +140.47 NASDAQ +34.48 SP500 +16.80 NASDAQ Dec/Adv/Vol 560/1884/594 mln
09:14 am : S&P futures vs fair value: +17.5. Nasdaq futures vs fair value: +31.0.
09:00 am : S&P futures vs fair value: +16.0. Nasdaq futures vs fair value: +27.0. The futures market is holding onto its post-economic data gain. Investors have not been pleased with Circuit City’s (CC) results. The stock is down nearly 20% in pre-market trading, but its market cap is small enough not to have much of an effect on the broader market.
08:31 am : S&P futures vs fair value: +16.3. Nasdaq futures vs fair value: +24.8. Futures gain a few points immediately following the Personal Income and Consumption report. Recently reported by the Dept. of Commerce, November income rose 0.4%, spending rose 1.1% and core-PCE increased 0.2%. Economists expected a 0.5% increase for income, a 0.7% increase for spending, and a 0.2% increase for core-PCE, which is the Fed's favored inflation indicator. In earnings news, Walgreens (WAG) topped expectations, while Circuit City (CC) posted a larger loss than expected.
07:58 am : S&P futures vs fair value: +14.3. Nasdaq futures vs fair value: +20.0. A considerably higher open is expected. Two news items, in particular, are behind the bullish bias. The first is Research In Motion's (RIMM) better than expected third quarter earnings report and fourth quarter guidance. The second item is a Wall Street Journal report that Merrill Lynch (MER) may be on the verge of receiving a $5 billion cash infusion from Temasek Holdings, a state-owned Singapore investment firm. As a reminder, today is a quadruple witching options expiration day with stock options, index options, index futures and single stock futures due to expire. Trading volume should be heavy as a result.
06:20 am : FTSE...6426.60...+81.00...+1.3%. DAX...7994.19...+125.00...+1.6%.
06:20 am : S&P futures vs fair value: +13.9. Nasdaq futures vs fair value: +24.3.
06:20 am : Nikkei...15257.00...+225.40...+1.5%. Hang Seng...27626.92...+609.83...+2.3%.
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