AI
Wednesday, January 02, 2008 5:30:30 PM
Market Update 080102
http://biz.yahoo.com/mu/update.html
4:25 pm : It was anything but a happy start to the new year for bullish-minded investors as oil prices hitting $100 and a report pointing to a contraction in the manufacturing sector fueled recession concerns.
In essence, it was the ISM Index that acted as the main catalyst for Wednesday's selling activity.
The report on national manufacturing activity slipped to 47.7 in December from 50.8 in November. The dividing line between expansion and contraction is 50, so the December number was particularly alarming given that readings below 47 have been consistent with the last two recessions.
Economists had expected a reading just north of 50. The negative surprise played into concerns about a spillover effect from the housing downturn. Accordingly, just about every sector traded down today with the exception of the energy sector (+0.6%), which jumped in conjunction with oil prices.
Crude futures for February delivery hit a contract high of $100 before settling the day at $99.45, up 3.6%. The jump in prices was driven by geopolitical concerns and the belief that the government's inventory report on Thursday will show another decline in stockpiles.
Gold futures were also in focus today, hitting a contract high of $864.90 per troy ounce amid inflation concerns that were stoked by weakness in the dollar and the prices paid component of the ISM Index creeping up to 68.0 from 67.5.
The minutes from the December 11 FOMC meeting, which were released in the early afternoon, made note of the Fed's inflation concerns, yet there still seemed to be a stronger emphasis in the minutes on growth concerns. Ultimately, the minutes didn't provide a lot of new insight for the market, which saw a brief uptick after their release but eventually rolled over again to end the day on a weak note.
Semiconductor stocks comprised one of the weakest-performing groups (-4.1%) after Banc of America Securities cut its view from Buy to Neutral, citing the risk of slower growth. As part of that downgrade, the firm also cut its ratings for the likes of Intel (INTC 25.35, -1.31) and Texas Instruments (TXN 32.35, -1.05) from Buy to Neutral, and for Advanced Micro Devices (AMD 7.14, -0.36) from Neutral to Sell.
The financial sector (-2.5%) picked up where it left off in 2007 and ended Wednesday's session as the worst-performing sector. The recession concerns and news that National City (NCC 15.59, -0.87) cut its dividend 49% to preserve capital contributed to the weak showing.
With the fallout in the stock market, Treasury prices rallied across the yield curve. The yield on the 2-year note fell 16 basis points to 2.88% while the yield on the benchmark 10-year note dropped 11 basis points to 3.91%.DJ30 -220.86 NASDAQ -42.65 NQ100 -1.7% R2K -1.6% SP400 -1.2% SP500 -21.20 NASDAQ Dec/Adv/Vol 1999/1023/2.07 bln NYSE Dec/Adv/Vol 1822/1339/1.42 bln
3:30 pm : In the past half-hour, the Dow and S&P hit fresh session lows. The major indices are trading near their worst levels of the session, and are slated to start 2008 on a sharply lower note.
Financials (-2.6%) were the sole sector to finish in the green on Monday, as investors took to bargain hunting. Today those bargain hunting efforts have faded as the sector takes the main laggard position.
Tomorrow brings the ADP employment report, initial claims, and factory reports. The ADP report precedes Friday's market moving Department of Labor jobs report. Last month, the ADP report (+189K) stated a much larger gain in employment than the government's report (+94K). DJ30 -241.10 NASDAQ -49.26 SP500 -23.57 NASDAQ Dec/Adv/Vol 2085/928/1.69 bln NYSE Dec/Adv/Vol 1760/1384/1.00 bln
3:00 pm : Stocks give up their post-FOMC minutes gains after a broad-based retreat. The major indices, though, remain off their worst levels of the session.
Crude oil, which hit an all-time intraday high of $100 per barrel, ended the session up $3.59 at a new closing high of $99.57. Commodities as a whole have rallied today, as indicated by the 2.3% gain in the CRB Index. Energy is up 3.9% and precious metals are up 2.6% on the day.
In currency trading, the dollar is down 0.87% against a basket of major world currencies.DJ30 -231.91 NASDAQ -46.93 SP500 -22.00 NASDAQ Dec/Adv/Vol 1992/1008/1.55 bln NYSE Dec/Adv/Vol 1721/1425/934 mln
2:35 pm : Stocks continued to pare their losses following the FOMC minutes, but buying interest has since faded.
The FOMC minutes did not provide much new insight for the market. The minutes seem to contain more emphasis on risks to economic growth than inflation risk, as the statement on Dec. 11 indicated. The Fed noted that credit market concerns could restrain economic growth further, which would lead to more tightening of credit and require "substantial further easing of policy." The Fed also noted that if markets stabilize, the reversal of some of the rate cuts would be appropriate.
Of note, one member, Mr. Rosengren, voted against the decision for a 25 basis point cut, preferring a 50 basis point cut. He felt weakness in incoming data warranted a more aggressive policy response. DJ30 -166.15 NASDAQ -30.61 SP500 -13.89 NASDAQ Dec/Adv/Vol 1825/1167/1.43 bln NYSE Dec/Adv/Vol 1690/1445/881 mln
2:05 pm : The stock market ticked upward prior to the release of the Dec. 11 FOMC minutes, which just hit the wires. As a reminder, the Fed decided to cut the fed funds and discount rates by 25 basis points on Dec 11. The market was disappointed by that decision, sending the Dow 294 points lower.
Some highlights of the minutes include the Fed acknowledgement that consumer spending is slowing more than thought. The Fed also noted that there is a chance of a rapid market rebound, and reversing rate cuts. Briefing.com will have more analysis on the minutes at the bottom of the hour.
The initial market reaction has been positive, as the major indices continue to pare some of their losses.DJ30 -201.76 NASDAQ -37.58 SP500 -17.52 NASDAQ Dec/Adv/Vol 2024/944/1.27 bln NYSE Dec/Adv/Vol 1975/1145/762 mln
1:30 pm : The stock market continues to trend lower. Stocks will have a hard time making a comeback without the support of financials (-2.2%) and tech (-2.4%), the two most heavily-weighted sectors in the S&P 500.
A CNBC commentator said that Merrill Lynch (MER 52.68, -1.00) may be cutting jobs as soon as tomorrow, and that it latest write-down could be an additional $10 billion.
Market breadth leans bearish. On the NYSE, decliners outpace advancers by 5-to-3. The Nasdaq comes in at a 5-to-2 margin. New 52 week lows outpace new highs by 4-to-1.DJ30 -243.46 NASDAQ -53.17 SP500 -23.28 NASDAQ Dec/Adv/Vol 2078/876/1.15 bln NYSE Dec/Adv/Vol 1955/1157/708 mln
1:00 pm : After a brief uptick, stocks fall back to their session lows. The Dow is down more than 200 points. The Nasdaq composite is underperforming the other major indices as Banc of America's downgrade of semiconductors ( -4.7%) takes a toll on the composite.
The tech sector (-2.3%) is the main laggard, with all 14 of its industry groups trading with a loss.
Shares of FedEx (FDX 86.07, -3.10) are under pressure after the company was downgraded to Neutral from Overweight at JPMorgan. The firm cited uncertainty surrounding FedEx's contractor model, according to the AP.DJ30 -203.89 NASDAQ -46.10 SP500 -20.02 NASDAQ Dec/Adv/Vol 2045/884/1.04 bln NYSE Dec/Adv/Vol 1960/1118/631 mln
12:30 pm : In the past half-hour, crude oil briefly hit an all-time high of $100.00 per barrel, before retreating a bit. Crude for February delivery is currently up 3.5% to $99.34. The previous nominal all-time high was $99.29, reached in November.
The gains in crude are weighing on the Amex Airline Index (-3.5%), which struggled last year due to high oil prices.
As crude rallies, stocks continue to slide. The decline is broad-based, considering all sectors other than energy (+0.5%) are posting a loss of 1% or larger.DJ30 -204.44 NASDAQ -52.50 SP500 -21.85 NASDAQ Dec/Adv/Vol 2027/883/913 mln NYSE Dec/Adv/Vol 1885/1166/547 mln
12:00 pm : Stocks kicked off 2008 on a lackluster note, and then a worse than expected manufacturing reading sent the major indices into negative territory shortly after the opening bell. Currently, the major indices are posting significant losses in excess of 1%, as they trade slightly above their intraday lows.
The December ISM Index, a national purchasing manager survey, disappointingly dropped to 47.7, compared to November's reading of 50.8. The number also came in short of the consensus estimate of 50.5, and is the lowest level seen since April 2003.
Because the number is below 50, it indicates a contraction in manufacturing. Readings below 47 have been consistent with the last two recessions. This is only one month of data, but it is not a good report for the stock market.
The weak data spurred traders to increase bets on a Jan. 30 rate cut, which caused oil (+3.3% to $99.12) and gold (+2.6% to $860.10) to extend their gains. Traders now expect a 26% chance of a 50 basis point cut on Jan. 30, and fully expect at least a 25 basis point cut. Last week, futures suggested a 92% chance of a 25 basis point cut, and no chance of a 50 basis point cut.
On a positive note, November construction spending increased 0.1%, this was better than the expectation of a 0.4% decrease. Also, the prior reading was also revised to -0.4% from -0.8%. The stock market mostly ignored the better than expected report, as the ISM Index took the limelight.
There was not much corporate news this morning, although there were a number of notable brokerage rating changes. Citigroup upgraded Amazon.com (AMZN 95.06, +2.42) to Buy from Neutral, and downgraded several real estate investment trusts. Meanwhile, Banc of America downgraded semiconductors (-4.0%) to Neutral from Buy.
Nine of the ten economic sectors are in the red, with tech (-1.9%) and financials (-1.9%) pacing the decline. Only energy (+0.4%) is managing to post a gain, thanks to the surge in oil prices.
Bonds are faring better than stocks this session, as traders flock to the safety of Treasuries. The 10-year note is up 29 ticks, sending its yield down to 3.91%.DJ30 -155.34 NASDAQ -38.77 SP500 -16.26 NASDAQ Dec/Adv/Vol 1999/869/780 mln NYSE Dec/Adv/Vol 1893/1131/466 mln
11:30 am : The stock market continues to slip, with all three major indices posting a loss in excess of 1%.
Crude oil makes further gains, now up 3.0% to $98.81, as it approaches its all-time high of $99.29 reached in November. The price of crude oil is being driven by speculation that tomorrow's inventory report will show stockpiles dropped, violence in Nigeria and a weak dollar.
In currency trading, the dollar is down 1% against the euro and down 1.8% against the yen as traders up bets for further rate cuts. Fed funds futures now fully price in a 25 basis point cut on Jan. 30, and indicate a 26% chance of a 50 basis point cut. Last week, futures suggested a 92% chance of a 25 basis point cut, with the remaining bets on no change to the rate.
The weak dollar is spurring buying interest in other commodities, such as gold which is up 2.2% to $856.70 per ounce. DJ30 -146.80 NASDAQ -32.41 SP500 -15.07 NASDAQ Dec/Adv/Vol 1887/936/655 mln NYSE Dec/Adv/Vol 1718/1262/381 mln
11:00 am : Recovery efforts are short-lived as the S&P 500 trades near its session low, and the Nasdaq Composite extends its losses. The weak ISM data continue to weigh on the stock market. Nine of the ten economic sectors are posting a loss, with energy (+0.3%) managing to buck the trend as crude oil (+2.1%) holds its gains.
Semiconductors (-3.5%) are under pressure this morning after Banc of America downgraded the sector to Neutral from Buy, citing the risk of slower growth. Specifically, Banc of America downgraded Intel (INTC 25.48, -1.18), and Texas Instruments (TXN 32.32, -1.08) to Neutral from Buy, and Advanced Micro Devices (AMD 7.22, -0.28) to Sell from Neutral.
There are no more economic releases this session, although the Dec. 11 FOMC minutes will be released at 14:00 ET.DJ30 -117.30 NASDAQ -21.62 SP500 -10.98 NASDAQ Dec/Adv/Vol 1767/1022/498 mln NYSE Dec/Adv/Vol 1658/1255/268 mln
10:30 am : Stocks extend their losses following the worse than expected ISM Index reading of 47.7. Readings below 47 have been consistent with the last two recessions.
The weak data have spurred buying interest in Treasuries. The 10-year note is up 26 ticks, sending its yield down to 3.92%.
For now, it appears selling pressure has eased, although buying interest has not picked up much either as the indices trade near their recently reached session lows.DJ30 -107.52 NASDAQ -13.64 SP500 -9.65 NASDAQ Dec/Adv/Vol 1569/1128/352 mln NYSE Dec/Adv/Vol 1036/1728/130 mln
10:05 am : Just hitting the wires, November construction spending rose 0.1% (consensus -0.4%). Separately, the ISM Index, a national survey of purchasing managers, dropped to 47.7 from a prior reading of 50.8. Economists expected a reading of 50.5. Any number below 50 is intended to reflect contraction.
Stocks were trading at the unchanged mark, but quickly fell into the red after the disappointing ISM report. Eight of the ten economic sectors are in negative territory. Financials (-1.1%) and telecom (-1.0%) are leading the retreat. Energy is outperforming, aided by a 2.2% rise in crude oil prices.DJ30 -68.44 NASDAQ -6.02 SP500 -5.98 NASDAQ Dec/Adv/Vol 1080/1285/137 mln
09:45 am : Stocks start 2008 on a flat note. There was not much corporate news this morning.
Qualcomm (QCOM) is trading lower after Broadcom (BRCM) announced that a federal judge on Dec. 31 issued an injunction against Qualcomm's continued infringement of three Broadcom patents.
Meanwhile, Amazon.com (AMZN), which gained over 130% in 2007, is up in the early going after being upgraded to Buy from Hold at Citi.DJ30 -12.11 NASDAQ +4.71 SP500 -0.13
09:14 am : S&P futures vs fair value: +1.0. Nasdaq futures vs fair value: +2.0.
08:57 am : S&P futures vs fair value: +1.4. Nasdaq futures vs fair value: +3.5. A slightly higher start is still expected. Crude oil topped $98 per barrel in earlier trade, before easing a bit to $97.67. The Energy Information Administration’s weekly energy inventory report is delayed one day to Thursday, due to the market’s closure on Jan. 1. Crude oil hit a nominal all-time high of $99.29 in November, 2007. Separately, investors will be paying attention to the ISM Index at 10:00 ET and the minutes from the December 11 FOMC meeting, which will be released at 14:00 ET.
08:35 am :
08:30 am : S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: +4.0. A slightly higher open is expected, but futures are off their best levels. Amazon.com (AMZN), one of the best-performing stocks of 2007, is set to start 2008 on a high note. Citigroup upgraded Amazon to Buy from hold, and set a target price of $119. Citi believes Amazon has one of the best fundamental outlooks for 2008 among U.S. internet stocks.
08:02 am : S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +6.5. Early indications suggest the new year will start on a slightly higher note, as traders expect some new year cash to boost the market. Intel (INTC) was downgraded to Neutral from Buy, and Advanced Micro Devices (AMD) was downgraded to Sell from Neutral at Banc of America. Meanwhile, Citigroup downgraded several REITs.
06:31 am : S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +10.0.
06:30 am : S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +10.0.
06:29 am : FTSE...6497.60...+40.70...+0.6%. DAX...8064.40...-2.92...-0.0%.
06:29 am : Nikkei...Holiday......... Hang Seng...27560.52...-252.13...-0.9%.
http://biz.yahoo.com/mu/update.html
4:25 pm : It was anything but a happy start to the new year for bullish-minded investors as oil prices hitting $100 and a report pointing to a contraction in the manufacturing sector fueled recession concerns.
In essence, it was the ISM Index that acted as the main catalyst for Wednesday's selling activity.
The report on national manufacturing activity slipped to 47.7 in December from 50.8 in November. The dividing line between expansion and contraction is 50, so the December number was particularly alarming given that readings below 47 have been consistent with the last two recessions.
Economists had expected a reading just north of 50. The negative surprise played into concerns about a spillover effect from the housing downturn. Accordingly, just about every sector traded down today with the exception of the energy sector (+0.6%), which jumped in conjunction with oil prices.
Crude futures for February delivery hit a contract high of $100 before settling the day at $99.45, up 3.6%. The jump in prices was driven by geopolitical concerns and the belief that the government's inventory report on Thursday will show another decline in stockpiles.
Gold futures were also in focus today, hitting a contract high of $864.90 per troy ounce amid inflation concerns that were stoked by weakness in the dollar and the prices paid component of the ISM Index creeping up to 68.0 from 67.5.
The minutes from the December 11 FOMC meeting, which were released in the early afternoon, made note of the Fed's inflation concerns, yet there still seemed to be a stronger emphasis in the minutes on growth concerns. Ultimately, the minutes didn't provide a lot of new insight for the market, which saw a brief uptick after their release but eventually rolled over again to end the day on a weak note.
Semiconductor stocks comprised one of the weakest-performing groups (-4.1%) after Banc of America Securities cut its view from Buy to Neutral, citing the risk of slower growth. As part of that downgrade, the firm also cut its ratings for the likes of Intel (INTC 25.35, -1.31) and Texas Instruments (TXN 32.35, -1.05) from Buy to Neutral, and for Advanced Micro Devices (AMD 7.14, -0.36) from Neutral to Sell.
The financial sector (-2.5%) picked up where it left off in 2007 and ended Wednesday's session as the worst-performing sector. The recession concerns and news that National City (NCC 15.59, -0.87) cut its dividend 49% to preserve capital contributed to the weak showing.
With the fallout in the stock market, Treasury prices rallied across the yield curve. The yield on the 2-year note fell 16 basis points to 2.88% while the yield on the benchmark 10-year note dropped 11 basis points to 3.91%.DJ30 -220.86 NASDAQ -42.65 NQ100 -1.7% R2K -1.6% SP400 -1.2% SP500 -21.20 NASDAQ Dec/Adv/Vol 1999/1023/2.07 bln NYSE Dec/Adv/Vol 1822/1339/1.42 bln
3:30 pm : In the past half-hour, the Dow and S&P hit fresh session lows. The major indices are trading near their worst levels of the session, and are slated to start 2008 on a sharply lower note.
Financials (-2.6%) were the sole sector to finish in the green on Monday, as investors took to bargain hunting. Today those bargain hunting efforts have faded as the sector takes the main laggard position.
Tomorrow brings the ADP employment report, initial claims, and factory reports. The ADP report precedes Friday's market moving Department of Labor jobs report. Last month, the ADP report (+189K) stated a much larger gain in employment than the government's report (+94K). DJ30 -241.10 NASDAQ -49.26 SP500 -23.57 NASDAQ Dec/Adv/Vol 2085/928/1.69 bln NYSE Dec/Adv/Vol 1760/1384/1.00 bln
3:00 pm : Stocks give up their post-FOMC minutes gains after a broad-based retreat. The major indices, though, remain off their worst levels of the session.
Crude oil, which hit an all-time intraday high of $100 per barrel, ended the session up $3.59 at a new closing high of $99.57. Commodities as a whole have rallied today, as indicated by the 2.3% gain in the CRB Index. Energy is up 3.9% and precious metals are up 2.6% on the day.
In currency trading, the dollar is down 0.87% against a basket of major world currencies.DJ30 -231.91 NASDAQ -46.93 SP500 -22.00 NASDAQ Dec/Adv/Vol 1992/1008/1.55 bln NYSE Dec/Adv/Vol 1721/1425/934 mln
2:35 pm : Stocks continued to pare their losses following the FOMC minutes, but buying interest has since faded.
The FOMC minutes did not provide much new insight for the market. The minutes seem to contain more emphasis on risks to economic growth than inflation risk, as the statement on Dec. 11 indicated. The Fed noted that credit market concerns could restrain economic growth further, which would lead to more tightening of credit and require "substantial further easing of policy." The Fed also noted that if markets stabilize, the reversal of some of the rate cuts would be appropriate.
Of note, one member, Mr. Rosengren, voted against the decision for a 25 basis point cut, preferring a 50 basis point cut. He felt weakness in incoming data warranted a more aggressive policy response. DJ30 -166.15 NASDAQ -30.61 SP500 -13.89 NASDAQ Dec/Adv/Vol 1825/1167/1.43 bln NYSE Dec/Adv/Vol 1690/1445/881 mln
2:05 pm : The stock market ticked upward prior to the release of the Dec. 11 FOMC minutes, which just hit the wires. As a reminder, the Fed decided to cut the fed funds and discount rates by 25 basis points on Dec 11. The market was disappointed by that decision, sending the Dow 294 points lower.
Some highlights of the minutes include the Fed acknowledgement that consumer spending is slowing more than thought. The Fed also noted that there is a chance of a rapid market rebound, and reversing rate cuts. Briefing.com will have more analysis on the minutes at the bottom of the hour.
The initial market reaction has been positive, as the major indices continue to pare some of their losses.DJ30 -201.76 NASDAQ -37.58 SP500 -17.52 NASDAQ Dec/Adv/Vol 2024/944/1.27 bln NYSE Dec/Adv/Vol 1975/1145/762 mln
1:30 pm : The stock market continues to trend lower. Stocks will have a hard time making a comeback without the support of financials (-2.2%) and tech (-2.4%), the two most heavily-weighted sectors in the S&P 500.
A CNBC commentator said that Merrill Lynch (MER 52.68, -1.00) may be cutting jobs as soon as tomorrow, and that it latest write-down could be an additional $10 billion.
Market breadth leans bearish. On the NYSE, decliners outpace advancers by 5-to-3. The Nasdaq comes in at a 5-to-2 margin. New 52 week lows outpace new highs by 4-to-1.DJ30 -243.46 NASDAQ -53.17 SP500 -23.28 NASDAQ Dec/Adv/Vol 2078/876/1.15 bln NYSE Dec/Adv/Vol 1955/1157/708 mln
1:00 pm : After a brief uptick, stocks fall back to their session lows. The Dow is down more than 200 points. The Nasdaq composite is underperforming the other major indices as Banc of America's downgrade of semiconductors ( -4.7%) takes a toll on the composite.
The tech sector (-2.3%) is the main laggard, with all 14 of its industry groups trading with a loss.
Shares of FedEx (FDX 86.07, -3.10) are under pressure after the company was downgraded to Neutral from Overweight at JPMorgan. The firm cited uncertainty surrounding FedEx's contractor model, according to the AP.DJ30 -203.89 NASDAQ -46.10 SP500 -20.02 NASDAQ Dec/Adv/Vol 2045/884/1.04 bln NYSE Dec/Adv/Vol 1960/1118/631 mln
12:30 pm : In the past half-hour, crude oil briefly hit an all-time high of $100.00 per barrel, before retreating a bit. Crude for February delivery is currently up 3.5% to $99.34. The previous nominal all-time high was $99.29, reached in November.
The gains in crude are weighing on the Amex Airline Index (-3.5%), which struggled last year due to high oil prices.
As crude rallies, stocks continue to slide. The decline is broad-based, considering all sectors other than energy (+0.5%) are posting a loss of 1% or larger.DJ30 -204.44 NASDAQ -52.50 SP500 -21.85 NASDAQ Dec/Adv/Vol 2027/883/913 mln NYSE Dec/Adv/Vol 1885/1166/547 mln
12:00 pm : Stocks kicked off 2008 on a lackluster note, and then a worse than expected manufacturing reading sent the major indices into negative territory shortly after the opening bell. Currently, the major indices are posting significant losses in excess of 1%, as they trade slightly above their intraday lows.
The December ISM Index, a national purchasing manager survey, disappointingly dropped to 47.7, compared to November's reading of 50.8. The number also came in short of the consensus estimate of 50.5, and is the lowest level seen since April 2003.
Because the number is below 50, it indicates a contraction in manufacturing. Readings below 47 have been consistent with the last two recessions. This is only one month of data, but it is not a good report for the stock market.
The weak data spurred traders to increase bets on a Jan. 30 rate cut, which caused oil (+3.3% to $99.12) and gold (+2.6% to $860.10) to extend their gains. Traders now expect a 26% chance of a 50 basis point cut on Jan. 30, and fully expect at least a 25 basis point cut. Last week, futures suggested a 92% chance of a 25 basis point cut, and no chance of a 50 basis point cut.
On a positive note, November construction spending increased 0.1%, this was better than the expectation of a 0.4% decrease. Also, the prior reading was also revised to -0.4% from -0.8%. The stock market mostly ignored the better than expected report, as the ISM Index took the limelight.
There was not much corporate news this morning, although there were a number of notable brokerage rating changes. Citigroup upgraded Amazon.com (AMZN 95.06, +2.42) to Buy from Neutral, and downgraded several real estate investment trusts. Meanwhile, Banc of America downgraded semiconductors (-4.0%) to Neutral from Buy.
Nine of the ten economic sectors are in the red, with tech (-1.9%) and financials (-1.9%) pacing the decline. Only energy (+0.4%) is managing to post a gain, thanks to the surge in oil prices.
Bonds are faring better than stocks this session, as traders flock to the safety of Treasuries. The 10-year note is up 29 ticks, sending its yield down to 3.91%.DJ30 -155.34 NASDAQ -38.77 SP500 -16.26 NASDAQ Dec/Adv/Vol 1999/869/780 mln NYSE Dec/Adv/Vol 1893/1131/466 mln
11:30 am : The stock market continues to slip, with all three major indices posting a loss in excess of 1%.
Crude oil makes further gains, now up 3.0% to $98.81, as it approaches its all-time high of $99.29 reached in November. The price of crude oil is being driven by speculation that tomorrow's inventory report will show stockpiles dropped, violence in Nigeria and a weak dollar.
In currency trading, the dollar is down 1% against the euro and down 1.8% against the yen as traders up bets for further rate cuts. Fed funds futures now fully price in a 25 basis point cut on Jan. 30, and indicate a 26% chance of a 50 basis point cut. Last week, futures suggested a 92% chance of a 25 basis point cut, with the remaining bets on no change to the rate.
The weak dollar is spurring buying interest in other commodities, such as gold which is up 2.2% to $856.70 per ounce. DJ30 -146.80 NASDAQ -32.41 SP500 -15.07 NASDAQ Dec/Adv/Vol 1887/936/655 mln NYSE Dec/Adv/Vol 1718/1262/381 mln
11:00 am : Recovery efforts are short-lived as the S&P 500 trades near its session low, and the Nasdaq Composite extends its losses. The weak ISM data continue to weigh on the stock market. Nine of the ten economic sectors are posting a loss, with energy (+0.3%) managing to buck the trend as crude oil (+2.1%) holds its gains.
Semiconductors (-3.5%) are under pressure this morning after Banc of America downgraded the sector to Neutral from Buy, citing the risk of slower growth. Specifically, Banc of America downgraded Intel (INTC 25.48, -1.18), and Texas Instruments (TXN 32.32, -1.08) to Neutral from Buy, and Advanced Micro Devices (AMD 7.22, -0.28) to Sell from Neutral.
There are no more economic releases this session, although the Dec. 11 FOMC minutes will be released at 14:00 ET.DJ30 -117.30 NASDAQ -21.62 SP500 -10.98 NASDAQ Dec/Adv/Vol 1767/1022/498 mln NYSE Dec/Adv/Vol 1658/1255/268 mln
10:30 am : Stocks extend their losses following the worse than expected ISM Index reading of 47.7. Readings below 47 have been consistent with the last two recessions.
The weak data have spurred buying interest in Treasuries. The 10-year note is up 26 ticks, sending its yield down to 3.92%.
For now, it appears selling pressure has eased, although buying interest has not picked up much either as the indices trade near their recently reached session lows.DJ30 -107.52 NASDAQ -13.64 SP500 -9.65 NASDAQ Dec/Adv/Vol 1569/1128/352 mln NYSE Dec/Adv/Vol 1036/1728/130 mln
10:05 am : Just hitting the wires, November construction spending rose 0.1% (consensus -0.4%). Separately, the ISM Index, a national survey of purchasing managers, dropped to 47.7 from a prior reading of 50.8. Economists expected a reading of 50.5. Any number below 50 is intended to reflect contraction.
Stocks were trading at the unchanged mark, but quickly fell into the red after the disappointing ISM report. Eight of the ten economic sectors are in negative territory. Financials (-1.1%) and telecom (-1.0%) are leading the retreat. Energy is outperforming, aided by a 2.2% rise in crude oil prices.DJ30 -68.44 NASDAQ -6.02 SP500 -5.98 NASDAQ Dec/Adv/Vol 1080/1285/137 mln
09:45 am : Stocks start 2008 on a flat note. There was not much corporate news this morning.
Qualcomm (QCOM) is trading lower after Broadcom (BRCM) announced that a federal judge on Dec. 31 issued an injunction against Qualcomm's continued infringement of three Broadcom patents.
Meanwhile, Amazon.com (AMZN), which gained over 130% in 2007, is up in the early going after being upgraded to Buy from Hold at Citi.DJ30 -12.11 NASDAQ +4.71 SP500 -0.13
09:14 am : S&P futures vs fair value: +1.0. Nasdaq futures vs fair value: +2.0.
08:57 am : S&P futures vs fair value: +1.4. Nasdaq futures vs fair value: +3.5. A slightly higher start is still expected. Crude oil topped $98 per barrel in earlier trade, before easing a bit to $97.67. The Energy Information Administration’s weekly energy inventory report is delayed one day to Thursday, due to the market’s closure on Jan. 1. Crude oil hit a nominal all-time high of $99.29 in November, 2007. Separately, investors will be paying attention to the ISM Index at 10:00 ET and the minutes from the December 11 FOMC meeting, which will be released at 14:00 ET.
08:35 am :
08:30 am : S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: +4.0. A slightly higher open is expected, but futures are off their best levels. Amazon.com (AMZN), one of the best-performing stocks of 2007, is set to start 2008 on a high note. Citigroup upgraded Amazon to Buy from hold, and set a target price of $119. Citi believes Amazon has one of the best fundamental outlooks for 2008 among U.S. internet stocks.
08:02 am : S&P futures vs fair value: +2.1. Nasdaq futures vs fair value: +6.5. Early indications suggest the new year will start on a slightly higher note, as traders expect some new year cash to boost the market. Intel (INTC) was downgraded to Neutral from Buy, and Advanced Micro Devices (AMD) was downgraded to Sell from Neutral at Banc of America. Meanwhile, Citigroup downgraded several REITs.
06:31 am : S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +10.0.
06:30 am : S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +10.0.
06:29 am : FTSE...6497.60...+40.70...+0.6%. DAX...8064.40...-2.92...-0.0%.
06:29 am : Nikkei...Holiday......... Hang Seng...27560.52...-252.13...-0.9%.
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