AI
Wednesday, January 16, 2008 6:16:43 PM
Market Update 080116
http://biz.yahoo.com/mu/update.html
4:30 pm : The stock market covered a lot of ground Wednesday, riding a roller coaster that was put into motion by the earnings reports from Intel (INTC 19.88, -2.81) and JPMorgan Chase (JPM 41.43, +2.26). The former report was deemed disappointing by the market whereas the latter report was deemed better than feared since it contained a write-down of "just $1.3 billion."
The end result was that the technology sector got hit with selling interest while the financial sector received a guarded bargain hunting bid that was aided in part by a Bear Stearns upgrade of the U.S. Financials sector to Market Weight from Underweight.
Intel, though, was the real story stock of the day as it plummeted 12% despite reporting a 51% increase in fourth quarter earnings. It was done in by a tempered outlook for the first quarter that was blamed on U.S. economic indicators and a continued weak NAND pricing environment. Specifically, Intel said it expects first quarter revenues in the range of $9.4 billion to $10 billion, the midpoint of which is below the $9.9 billion consensus estimate and marks a larger than usual 9.4% sequential decline.
The harsh treatment Intel received carried over to many of its technology peers, including Apple (AAPL 159.64, -9.40), Dell (DELL 20.68, -0.22), Microsoft (MSFT 33.23, -0.77) and Cisco (CSCO 25.15, -0.70) whose combined losses helped drive a 1.2% decline in the Nasdaq 100. Oracle (ORCL 21.92, +0.61) bucked the trend after announcing the purchase of BEA Systems (BEAS 18.46, +2.88) that is expected to be accretive to earnings.
It was the energy and basic materials sectors, though, that suffered the biggest hit on Wednesday, falling 3.1% and 3.2%, respectively, as economic slowdown concerns got the better of investors. In addition, a report of a larger than expected build in crude stockpiles in the latest week applied added pressure to the energy stocks which followed crude prices lower (-$1.27 to $90.46).
Commodity prices, in general, were weak on Wednesday as evidenced by the 2.5% decline in the CRB Index. A flat reading for Industrial Production in December contributed to the selling interest as it fed prevailing slowdown arguments. Separately, December core CPI came in as expected, up 0.2%, and offered a welcome reminder that the core inflation trend remains steady.
Financial stocks were mostly higher, along with many of the consumer discretionary stocks that benefited from the drop in oil prices and the belief that many have gotten oversold in recent weeks. The financial and consumer discretionary sectors were Wednesday's winning standouts, with each sector gaining 1.3%.
Despite their winning performance, the major indices ended the day in poor fashion as a wave of selling interest left them all in negative territory on very heavy volume when the closing bell rang.
The Treasury market also succumbed to selling interest. The 10-year note shed 12 ticks, bumping its yield up to 3.72%. DJ30 -34.95 NASDAQ -23.00 NQ100 -1.2% R2K +0.4% SP400 -0.5% SP500 -7.75 NASDAQ Dec/Adv/Vol 1382/1650/3.51 bln NYSE Dec/Adv/Vol 1573/1603/2.11 bln
3:30 pm : The stock market is trading in the green with modest gains, slightly below its best level of the session. The Nasdaq is trading with a slight loss, as Intel (INTC 19.88, -2.81) continues to weigh on tech as the stock has failed to stir up any buying interest. Meanwhile, the recent strength in stocks has weighed on Treasuries. The 10-year note is down 16 ticks, sending its yield up to 3.73%.
Looking toward tomorrow, Dec. housing starts, weekly initial claims, and the Jan Philadelphia Fed are set for release. There are 18 companies set to report earnings before the open, with Merrill Lynch (MER 55.54, +2.53) expected to be the focal point. Merrill is expected to report a large write-down.DJ30 +55.44 NASDAQ -1.58 SP500 +3.75 NASDAQ Dec/Adv/Vol 1242/1781/2.85 bln NYSE Dec/Adv/Vol 1330/1819/1.53 bln
3:00 pm : The major indices break through their afternoon trading ranges, and the Nasdaq briefly made it to positive territory for the first time this session. The indices have pulled back a bit, but continue to trade near their recently reached session highs. The gains are broad-based, but once again financials (+3.2%) are pacing the advance.
Specifically, Freddie Mac (33.66, +2.93) and Fannie Mae (FRE 38.31, +2.01) have seen a steep increase in buying interest. The thrifts & mortgages group (+6.4%) is providing leadership.
Gains in homebuilders (+6.7%) and retailers (+3.6%) is helping to lift the consumer discretionary sector (+2.4%)
In currency trading, the dollar is up 0.98% against the euro after European Central Bank (ECB) council member Mersch emphasized downside risks to Europe's economy, according to Bloomberg.com. The comments increased the expectation of a ECB rate cut, which is giving the U.S. dollar support. DJ30 +60.08 NASDAQ -2.85 SP500 +4.89 NASDAQ Dec/Adv/Vol 1171/1831/2.61 bln NYSE Dec/Adv/Vol 1361/1771/1.38 bln
2:30 pm : The market remains range-bound near its session highs. The major indices have had a limited range since 12:00 ET.
The Fed's Beige Book, which is largely an anecdotal review of the economy, was released at the top of the hour. It typically does not garner much of a market reaction since it does not contain new data.
The report said residential real estate was "quite weak" in all regions, and further declines are expected in residential real estate lending. Three districts reported slowing growth, and the Book noted economic activity rose at a "slow pace." DJ30 +26.34 NASDAQ -8.00 SP500 +0.44 NASDAQ Dec/Adv/Vol 1312/1675/2.39 bln NYSE Dec/Adv/Vol 1517/1603/1.24 bln
2:00 pm : The major indices are trading in range-bound fashion near their session highs.
Decliners and advancers are nearly even on the NYSE, with a 1-to-1 ratio. Advancers outpace decliners by 5-to-4 on the Nasdaq, despite the Composite shedding roughly 0.8%. New 52-week lows outpace new highs by 17-to-1 on the NYSE, and by 22-to-1 on the Nasdaq. Volume is on the heavy side.DJ30 +1.30 NASDAQ -21.73 SP500 -4.78 NASDAQ Dec/Adv/Vol 1337/1633/2.20 bln NYSE Dec/Adv/Vol 1489/1633/1.17 bln
1:30 pm : The stock market retreats, although it remains well off its intraday low.
Bond insurer MBIA (MBI 14.15, -1.90) has pared some of its losses after Fitch Ratings affirmed the company's AAA credit rating according to Bloomberg. MBIA was taken also taken off negative watch at Fitch.
Gold is under selling pressure, dropping 2.1% to $883.20 per ounce.DJ30 -8.21 NASDAQ -22.67 SP500 -5.22 NASDAQ Dec/Adv/Vol 1324/1612/2.02 bln NYSE Dec/Adv/Vol 1459/1650/1.06 bln
1:00 pm : The major indices are trading modestly below their best levels of the session.
Financials (+1.6%) as a whole are outperforming, but bond insurers are not participating in the action. Ambac's (ABK 15.40, -5.74) shares have plummeted 27% on news that the company is raising $1 billion and cutting its dividend by 67% in order to strengthen its capital base. Ambac said its dividend would not be cut three weeks ago, according to Bloomberg.com. The company also announced its CEO is being replaced. The stock is down 84% from its 52-week high. MBIA (MBI 13.34, -2.71) has fallen in conjunction with Ambac.DJ30 +17.97 NASDAQ -12.88 SP500 -1.49 NASDAQ Dec/Adv/Vol 1323/1611/1.89 bln NYSE Dec/Adv/Vol 1488/1599/980 mln
12:30 pm : The recovery effort stalls as the major indices trade slightly below their best levels of the session. The Dow is managing to hold in the green as it outperforms the broader market.
16 of the 30 components are posting a gain in the Dow Jones Industrial average. JPMorgan Chase (JPM 42.03, +2.86) and Boeing (BA 79.87, +2.01) are providing leadership. JPMorgan is higher on its earnings report. Boeing confirmed today that it is again delaying its 787 Dreamliner. The company will now be making deliveries in 2009, instead of late 2008. Its stock is higher on a sense that its decline yesterday was overdone on The Wall Street Journal article that broke this story.
The main laggards are Intel (INTC 20.00, -2.69) and Exxon Mobil (XOM 86.80, -2.22). Intel is down on its earnings report and Exxon is struggling as oil slides 2%.DJ30 +33.74 NASDAQ -16.24 SP500 -1.48 NASDAQ Dec/Adv/Vol 1373/1520/1.72 bln NYSE Dec/Adv/Vol 1454/1625/869 mln
12:00 pm : It has been a choppy day of trading on Wednesday. The S&P 500 has recovered to the unchanged mark, which was led by buying interest in financials. The stock market was posting steep losses after disappointing earnings from a technology bellwether weighed on sentiment in earlier trade.
Six of the ten sectors are trading higher, led by telecom (+2.0%) and financials (+1.6%). The weakness in the tech sector (-1.8%) is causing the Nasdaq Composite to trail the S&P.
Dow Component Intel (INTC 20.09, -2.60) last night reported earnings of $0.38 per share, which came in short of the First Call consensus estimate of $0.40. Intel guided first quarter revenue below the consensus estimate. Intel stock is down 11.5%, as traders held high expectations after IBM (IBM 101.63, -0.20) reported positve earnings in a pre-announcement on Monday.
Not all news out of tech sector was negative. Oracle (ORCL 21.58, +0.27) is acquiring BEA Systems (BEAS 18.56, +2.98) for $8.5 billion, or $19.275 per share, in cash. The deal has been approved by BEA's board, but is subject to stockholder and regulatory approval. Both stocks are up on the news.
The outperformance of the financial sector (+1.1%) is helping to offset some of the disappointment in Intel's earnings. JPMorgan Chase (JPM 41.75, +2.58) reported fourth quarter earnings of $0.86 per share, which was six cents short of the consensus estimate. The stock has gotten a boost, as investors have been encouraged by the firm's relatively small write-down of $1.3 billion.
Wells Fargo (WFC 27.52, +1.03) reported earnings that were in-line with expectations, and noted it is finding more opportunities for acquisitions.
The financial sector was upgraded to Market Weight from Underweight at Bear Stearns, which is also fueling some buying interest.
Crude oil is down a steep 2.0% to $90.03 after the government's weekly energy reported showed that inventories grew by a larger than expected amount. The decline in oil prices has weighed on the energy sector (-3.0%).
On the economic front, December CPI rose a slightly higher than expected 0.3%. The consensus estimate predicted CPI to rise 0.2%, although many economists expected a 0.3% rise. Core CPI, which excludes volatile energy and food prices, rose an expected 0.2%.
December Industrial production was flat, which was slightly better than the expected 0.2% decline. The outlook for industrial production is sluggish, but is not yet declining. DJ30 +41.46 NASDAQ +0.75 SP500 -15.61 NASDAQ Dec/Adv/Vol 1502/1359/1.47 bln NYSE Dec/Adv/Vol 1616/1436/723 mln
11:30 am : The major indices bounce off their session lows. The recovery effort has been broad-based, but the tech sector (-2.1%) is seeing some relative strength.
Within the tech sector, 12 of its 14 industry groups are trending lower. The semiconductor group (-7.0%) is posting the largest loss, as Intel (INTC 20.00, -2.69) continues to face selling pressure. The data processing group (+1.5%) is posting the largest gain thanks to Oracle's (ORCL 21.48, +0.17) acquisition of BEA Systems (BEAS 18.57, +2.99).DJ30 -23.25 NASDAQ -6.16 SP500 -28.62 NASDAQ Dec/Adv/Vol 1579/1244/1.26 bln NYSE Dec/Adv/Vol 1658/1351/604 mln
11:00 am : Buyers are sitting out as the major indices fall to fresh session lows as the S&P breaches its August 2007 lows. Unlike yesterday, today's decline is not broad-based as six of the ten economic sectors are posting a gain. The steep drop in the heavily-weighted tech (-3.2%) and energy (-3.9%) sectors are bringing down the broader market. The sectors combined make up 29.6% of the S&P 500.
Crude oil is trading down 2.5% to $89.66 per barrel in response to the bearish inventory reading. The decline in crude prices is weighing on the energy sector.DJ30 -87.63 NASDAQ -52.10 SP500 -14.51 NASDAQ Dec/Adv/Vol 1559/1203/934 mln NYSE Dec/Adv/Vol 1587/1349/389 mln
10:30 am : The major indices extend their losses with the Nasdaq seeing a sharp decline. The heavily-weighted tech sector (-2.5%) is acting as the main drag. It is the worst performing sector in 2008, posting a 11.5% decline.
Just reported, the Dept. of Energy said crude inventories rose by 4.3 million barrels. Analysts expected inventories to rise by 1.3 million barrels. Crude was trading down 1.3% to $90.70 just prior to the announcement.
Reported before the open, December CPI rose a slightly higher than expected 0.3%. The consensus estimate predicted CPI to rise 0.2%, although many economists expected a 0.3% rise. Core CPI, which excludes volatile energy and food prices, rose an expected 0.2%.DJ30 -43.89 NASDAQ -37.72 SP500 -7.55 NASDAQ Dec/Adv/Vol 1487/1173/690 mln NYSE Dec/Adv/Vol 1429/1451/265 mln
10:00 am : The major indices slip into the red, with the Nasdaq underperforming due to the sharp decline in shares of Intel (INTC 20.18, -2.50). Seven of the ten sectors are in the green. Telecom is the leader, while tech is the main laggard.
Financials (+0.3%) are outperforming after being clipped 3.7% yesterday. Notably, JPMorgan Chase (JPM 40.41, +1.24) is up 3.2%. JPMorgan reported fourth quarter earnings of $0.86 per share, which was six cents short of the consensus estimate. The stock has gotten a boost, as investors have been encouraged by the firm's relatively small write-down of $1.3 billion.
The government's weekly energy inventory report is slated for release at 10:30 ET. Crude is trading down 0.7% to $91.23 per barrel.DJ30 -33.65 NASDAQ -25.42 SP500 -5.47 NASDAQ Dec/Adv/Vol 1035/1417/376 mln NYSE Dec/Adv/Vol 1280/1344/97 mln
09:45 am : Stocks open much better than the dreary outlook early this morning. After opening slightly lower, the Dow and S&P are trading with modest gains, while the Nasdaq trades with a modest loss.
Stocks were poised for a sharply lower open after Intel (INTC) last night reported earnings that missed expectations, and issued first quarter guidance that was below the consensus estimate.
A relatively small write-down from JPMorgan Chase (JPM) and news that Oracle (ORCL) is acquiring BEA Systems (BEAS) for $8.5 billion in cash helped mitigate some the disappointment on Intel's outlook. Financial stocks were upgraded to Market Perform from Underperform at Bear Stearns, which also helped give the market a modest boost.DJ30 +34.47 NASDAQ -8.42 SP500 +2.93
09:18 am : S&P futures vs fair value: -4.4. Nasdaq futures vs fair value: -14.3. A lower start is expected, but futures continue to pare some of their losses. December industrial production was flat, compared to the expected 0.2% decline. Capacity utilization was 81.4% compared to the expected utilization of 81.2%.
09:00 am : S&P futures vs fair value: -7.9. Nasdaq futures vs fair value: -21.0. A significantly lower start is expected for the stock market. Boeing (BA) has confirmed that its 787 Dreamliner will face further delays, as reported yesterday by the Wall Street Journal. The company said the delay will have no impact on 2007 financials and no material impact on 2008 earnings guidance.
08:32 am : S&P futures vs fair value: -8.8. Nasdaq futures vs fair value: -22.0. Futures gain a few points and then dip a bit on a modestly higher than expected CPI reading. December CPI rose 0.3% month-over-month, while core CPI rose 0.2%. Economists expected both CPI and core CPI to rise 0.2%. Year-over-year CPI was up 4.1%, and core CPI was up 2.4%. Wells Fargo (WFC) reported earnings that were in-line with expectations, and noted it is finding more opportunities for acquisitions. Ambac (ABK) announced a plan to strengthen its capital base by issuing at least $ 1 bln in equity and equity-linked securities and by cutting its dividend 66%.
08:00 am : S&P futures vs fair value: -9.0. Nasdaq futures vs fair value: -23.0. Futures point to a negative start, but are off their worst levels. A disappointing earnings report from Intel (INTC) is weighing on the market. Intel issued first quarter earnings guidance that was below the consensus estimate, which is helping fuel concerns of a broader economic slowdown. JPMorgan’s (JPM) earnings report helped give futures a slight boost. JPMorgan missed its earnings expectations, but its write-down was relatively modest, which helped send its shares higher in pre-market trading. The futures market pared some more of its losses on news that BEA Systems (BEAS) is going to be acquired by Oracle (ORCL) for $19.375 per share.
06:20 am : S&P futures vs fair value: -12.2. Nasdaq futures vs fair value: -29.5.
06:16 am : FTSE...5945.10...-80.50...-1.3%. DAX...7471.85...-94.53...-1.3%.
06:16 am : Nikkei...13504.51...-468.12...-3.4%. Hang Seng...24450.85...-1386.93...-5.4%.
http://biz.yahoo.com/mu/update.html
4:30 pm : The stock market covered a lot of ground Wednesday, riding a roller coaster that was put into motion by the earnings reports from Intel (INTC 19.88, -2.81) and JPMorgan Chase (JPM 41.43, +2.26). The former report was deemed disappointing by the market whereas the latter report was deemed better than feared since it contained a write-down of "just $1.3 billion."
The end result was that the technology sector got hit with selling interest while the financial sector received a guarded bargain hunting bid that was aided in part by a Bear Stearns upgrade of the U.S. Financials sector to Market Weight from Underweight.
Intel, though, was the real story stock of the day as it plummeted 12% despite reporting a 51% increase in fourth quarter earnings. It was done in by a tempered outlook for the first quarter that was blamed on U.S. economic indicators and a continued weak NAND pricing environment. Specifically, Intel said it expects first quarter revenues in the range of $9.4 billion to $10 billion, the midpoint of which is below the $9.9 billion consensus estimate and marks a larger than usual 9.4% sequential decline.
The harsh treatment Intel received carried over to many of its technology peers, including Apple (AAPL 159.64, -9.40), Dell (DELL 20.68, -0.22), Microsoft (MSFT 33.23, -0.77) and Cisco (CSCO 25.15, -0.70) whose combined losses helped drive a 1.2% decline in the Nasdaq 100. Oracle (ORCL 21.92, +0.61) bucked the trend after announcing the purchase of BEA Systems (BEAS 18.46, +2.88) that is expected to be accretive to earnings.
It was the energy and basic materials sectors, though, that suffered the biggest hit on Wednesday, falling 3.1% and 3.2%, respectively, as economic slowdown concerns got the better of investors. In addition, a report of a larger than expected build in crude stockpiles in the latest week applied added pressure to the energy stocks which followed crude prices lower (-$1.27 to $90.46).
Commodity prices, in general, were weak on Wednesday as evidenced by the 2.5% decline in the CRB Index. A flat reading for Industrial Production in December contributed to the selling interest as it fed prevailing slowdown arguments. Separately, December core CPI came in as expected, up 0.2%, and offered a welcome reminder that the core inflation trend remains steady.
Financial stocks were mostly higher, along with many of the consumer discretionary stocks that benefited from the drop in oil prices and the belief that many have gotten oversold in recent weeks. The financial and consumer discretionary sectors were Wednesday's winning standouts, with each sector gaining 1.3%.
Despite their winning performance, the major indices ended the day in poor fashion as a wave of selling interest left them all in negative territory on very heavy volume when the closing bell rang.
The Treasury market also succumbed to selling interest. The 10-year note shed 12 ticks, bumping its yield up to 3.72%. DJ30 -34.95 NASDAQ -23.00 NQ100 -1.2% R2K +0.4% SP400 -0.5% SP500 -7.75 NASDAQ Dec/Adv/Vol 1382/1650/3.51 bln NYSE Dec/Adv/Vol 1573/1603/2.11 bln
3:30 pm : The stock market is trading in the green with modest gains, slightly below its best level of the session. The Nasdaq is trading with a slight loss, as Intel (INTC 19.88, -2.81) continues to weigh on tech as the stock has failed to stir up any buying interest. Meanwhile, the recent strength in stocks has weighed on Treasuries. The 10-year note is down 16 ticks, sending its yield up to 3.73%.
Looking toward tomorrow, Dec. housing starts, weekly initial claims, and the Jan Philadelphia Fed are set for release. There are 18 companies set to report earnings before the open, with Merrill Lynch (MER 55.54, +2.53) expected to be the focal point. Merrill is expected to report a large write-down.DJ30 +55.44 NASDAQ -1.58 SP500 +3.75 NASDAQ Dec/Adv/Vol 1242/1781/2.85 bln NYSE Dec/Adv/Vol 1330/1819/1.53 bln
3:00 pm : The major indices break through their afternoon trading ranges, and the Nasdaq briefly made it to positive territory for the first time this session. The indices have pulled back a bit, but continue to trade near their recently reached session highs. The gains are broad-based, but once again financials (+3.2%) are pacing the advance.
Specifically, Freddie Mac (33.66, +2.93) and Fannie Mae (FRE 38.31, +2.01) have seen a steep increase in buying interest. The thrifts & mortgages group (+6.4%) is providing leadership.
Gains in homebuilders (+6.7%) and retailers (+3.6%) is helping to lift the consumer discretionary sector (+2.4%)
In currency trading, the dollar is up 0.98% against the euro after European Central Bank (ECB) council member Mersch emphasized downside risks to Europe's economy, according to Bloomberg.com. The comments increased the expectation of a ECB rate cut, which is giving the U.S. dollar support. DJ30 +60.08 NASDAQ -2.85 SP500 +4.89 NASDAQ Dec/Adv/Vol 1171/1831/2.61 bln NYSE Dec/Adv/Vol 1361/1771/1.38 bln
2:30 pm : The market remains range-bound near its session highs. The major indices have had a limited range since 12:00 ET.
The Fed's Beige Book, which is largely an anecdotal review of the economy, was released at the top of the hour. It typically does not garner much of a market reaction since it does not contain new data.
The report said residential real estate was "quite weak" in all regions, and further declines are expected in residential real estate lending. Three districts reported slowing growth, and the Book noted economic activity rose at a "slow pace." DJ30 +26.34 NASDAQ -8.00 SP500 +0.44 NASDAQ Dec/Adv/Vol 1312/1675/2.39 bln NYSE Dec/Adv/Vol 1517/1603/1.24 bln
2:00 pm : The major indices are trading in range-bound fashion near their session highs.
Decliners and advancers are nearly even on the NYSE, with a 1-to-1 ratio. Advancers outpace decliners by 5-to-4 on the Nasdaq, despite the Composite shedding roughly 0.8%. New 52-week lows outpace new highs by 17-to-1 on the NYSE, and by 22-to-1 on the Nasdaq. Volume is on the heavy side.DJ30 +1.30 NASDAQ -21.73 SP500 -4.78 NASDAQ Dec/Adv/Vol 1337/1633/2.20 bln NYSE Dec/Adv/Vol 1489/1633/1.17 bln
1:30 pm : The stock market retreats, although it remains well off its intraday low.
Bond insurer MBIA (MBI 14.15, -1.90) has pared some of its losses after Fitch Ratings affirmed the company's AAA credit rating according to Bloomberg. MBIA was taken also taken off negative watch at Fitch.
Gold is under selling pressure, dropping 2.1% to $883.20 per ounce.DJ30 -8.21 NASDAQ -22.67 SP500 -5.22 NASDAQ Dec/Adv/Vol 1324/1612/2.02 bln NYSE Dec/Adv/Vol 1459/1650/1.06 bln
1:00 pm : The major indices are trading modestly below their best levels of the session.
Financials (+1.6%) as a whole are outperforming, but bond insurers are not participating in the action. Ambac's (ABK 15.40, -5.74) shares have plummeted 27% on news that the company is raising $1 billion and cutting its dividend by 67% in order to strengthen its capital base. Ambac said its dividend would not be cut three weeks ago, according to Bloomberg.com. The company also announced its CEO is being replaced. The stock is down 84% from its 52-week high. MBIA (MBI 13.34, -2.71) has fallen in conjunction with Ambac.DJ30 +17.97 NASDAQ -12.88 SP500 -1.49 NASDAQ Dec/Adv/Vol 1323/1611/1.89 bln NYSE Dec/Adv/Vol 1488/1599/980 mln
12:30 pm : The recovery effort stalls as the major indices trade slightly below their best levels of the session. The Dow is managing to hold in the green as it outperforms the broader market.
16 of the 30 components are posting a gain in the Dow Jones Industrial average. JPMorgan Chase (JPM 42.03, +2.86) and Boeing (BA 79.87, +2.01) are providing leadership. JPMorgan is higher on its earnings report. Boeing confirmed today that it is again delaying its 787 Dreamliner. The company will now be making deliveries in 2009, instead of late 2008. Its stock is higher on a sense that its decline yesterday was overdone on The Wall Street Journal article that broke this story.
The main laggards are Intel (INTC 20.00, -2.69) and Exxon Mobil (XOM 86.80, -2.22). Intel is down on its earnings report and Exxon is struggling as oil slides 2%.DJ30 +33.74 NASDAQ -16.24 SP500 -1.48 NASDAQ Dec/Adv/Vol 1373/1520/1.72 bln NYSE Dec/Adv/Vol 1454/1625/869 mln
12:00 pm : It has been a choppy day of trading on Wednesday. The S&P 500 has recovered to the unchanged mark, which was led by buying interest in financials. The stock market was posting steep losses after disappointing earnings from a technology bellwether weighed on sentiment in earlier trade.
Six of the ten sectors are trading higher, led by telecom (+2.0%) and financials (+1.6%). The weakness in the tech sector (-1.8%) is causing the Nasdaq Composite to trail the S&P.
Dow Component Intel (INTC 20.09, -2.60) last night reported earnings of $0.38 per share, which came in short of the First Call consensus estimate of $0.40. Intel guided first quarter revenue below the consensus estimate. Intel stock is down 11.5%, as traders held high expectations after IBM (IBM 101.63, -0.20) reported positve earnings in a pre-announcement on Monday.
Not all news out of tech sector was negative. Oracle (ORCL 21.58, +0.27) is acquiring BEA Systems (BEAS 18.56, +2.98) for $8.5 billion, or $19.275 per share, in cash. The deal has been approved by BEA's board, but is subject to stockholder and regulatory approval. Both stocks are up on the news.
The outperformance of the financial sector (+1.1%) is helping to offset some of the disappointment in Intel's earnings. JPMorgan Chase (JPM 41.75, +2.58) reported fourth quarter earnings of $0.86 per share, which was six cents short of the consensus estimate. The stock has gotten a boost, as investors have been encouraged by the firm's relatively small write-down of $1.3 billion.
Wells Fargo (WFC 27.52, +1.03) reported earnings that were in-line with expectations, and noted it is finding more opportunities for acquisitions.
The financial sector was upgraded to Market Weight from Underweight at Bear Stearns, which is also fueling some buying interest.
Crude oil is down a steep 2.0% to $90.03 after the government's weekly energy reported showed that inventories grew by a larger than expected amount. The decline in oil prices has weighed on the energy sector (-3.0%).
On the economic front, December CPI rose a slightly higher than expected 0.3%. The consensus estimate predicted CPI to rise 0.2%, although many economists expected a 0.3% rise. Core CPI, which excludes volatile energy and food prices, rose an expected 0.2%.
December Industrial production was flat, which was slightly better than the expected 0.2% decline. The outlook for industrial production is sluggish, but is not yet declining. DJ30 +41.46 NASDAQ +0.75 SP500 -15.61 NASDAQ Dec/Adv/Vol 1502/1359/1.47 bln NYSE Dec/Adv/Vol 1616/1436/723 mln
11:30 am : The major indices bounce off their session lows. The recovery effort has been broad-based, but the tech sector (-2.1%) is seeing some relative strength.
Within the tech sector, 12 of its 14 industry groups are trending lower. The semiconductor group (-7.0%) is posting the largest loss, as Intel (INTC 20.00, -2.69) continues to face selling pressure. The data processing group (+1.5%) is posting the largest gain thanks to Oracle's (ORCL 21.48, +0.17) acquisition of BEA Systems (BEAS 18.57, +2.99).DJ30 -23.25 NASDAQ -6.16 SP500 -28.62 NASDAQ Dec/Adv/Vol 1579/1244/1.26 bln NYSE Dec/Adv/Vol 1658/1351/604 mln
11:00 am : Buyers are sitting out as the major indices fall to fresh session lows as the S&P breaches its August 2007 lows. Unlike yesterday, today's decline is not broad-based as six of the ten economic sectors are posting a gain. The steep drop in the heavily-weighted tech (-3.2%) and energy (-3.9%) sectors are bringing down the broader market. The sectors combined make up 29.6% of the S&P 500.
Crude oil is trading down 2.5% to $89.66 per barrel in response to the bearish inventory reading. The decline in crude prices is weighing on the energy sector.DJ30 -87.63 NASDAQ -52.10 SP500 -14.51 NASDAQ Dec/Adv/Vol 1559/1203/934 mln NYSE Dec/Adv/Vol 1587/1349/389 mln
10:30 am : The major indices extend their losses with the Nasdaq seeing a sharp decline. The heavily-weighted tech sector (-2.5%) is acting as the main drag. It is the worst performing sector in 2008, posting a 11.5% decline.
Just reported, the Dept. of Energy said crude inventories rose by 4.3 million barrels. Analysts expected inventories to rise by 1.3 million barrels. Crude was trading down 1.3% to $90.70 just prior to the announcement.
Reported before the open, December CPI rose a slightly higher than expected 0.3%. The consensus estimate predicted CPI to rise 0.2%, although many economists expected a 0.3% rise. Core CPI, which excludes volatile energy and food prices, rose an expected 0.2%.DJ30 -43.89 NASDAQ -37.72 SP500 -7.55 NASDAQ Dec/Adv/Vol 1487/1173/690 mln NYSE Dec/Adv/Vol 1429/1451/265 mln
10:00 am : The major indices slip into the red, with the Nasdaq underperforming due to the sharp decline in shares of Intel (INTC 20.18, -2.50). Seven of the ten sectors are in the green. Telecom is the leader, while tech is the main laggard.
Financials (+0.3%) are outperforming after being clipped 3.7% yesterday. Notably, JPMorgan Chase (JPM 40.41, +1.24) is up 3.2%. JPMorgan reported fourth quarter earnings of $0.86 per share, which was six cents short of the consensus estimate. The stock has gotten a boost, as investors have been encouraged by the firm's relatively small write-down of $1.3 billion.
The government's weekly energy inventory report is slated for release at 10:30 ET. Crude is trading down 0.7% to $91.23 per barrel.DJ30 -33.65 NASDAQ -25.42 SP500 -5.47 NASDAQ Dec/Adv/Vol 1035/1417/376 mln NYSE Dec/Adv/Vol 1280/1344/97 mln
09:45 am : Stocks open much better than the dreary outlook early this morning. After opening slightly lower, the Dow and S&P are trading with modest gains, while the Nasdaq trades with a modest loss.
Stocks were poised for a sharply lower open after Intel (INTC) last night reported earnings that missed expectations, and issued first quarter guidance that was below the consensus estimate.
A relatively small write-down from JPMorgan Chase (JPM) and news that Oracle (ORCL) is acquiring BEA Systems (BEAS) for $8.5 billion in cash helped mitigate some the disappointment on Intel's outlook. Financial stocks were upgraded to Market Perform from Underperform at Bear Stearns, which also helped give the market a modest boost.DJ30 +34.47 NASDAQ -8.42 SP500 +2.93
09:18 am : S&P futures vs fair value: -4.4. Nasdaq futures vs fair value: -14.3. A lower start is expected, but futures continue to pare some of their losses. December industrial production was flat, compared to the expected 0.2% decline. Capacity utilization was 81.4% compared to the expected utilization of 81.2%.
09:00 am : S&P futures vs fair value: -7.9. Nasdaq futures vs fair value: -21.0. A significantly lower start is expected for the stock market. Boeing (BA) has confirmed that its 787 Dreamliner will face further delays, as reported yesterday by the Wall Street Journal. The company said the delay will have no impact on 2007 financials and no material impact on 2008 earnings guidance.
08:32 am : S&P futures vs fair value: -8.8. Nasdaq futures vs fair value: -22.0. Futures gain a few points and then dip a bit on a modestly higher than expected CPI reading. December CPI rose 0.3% month-over-month, while core CPI rose 0.2%. Economists expected both CPI and core CPI to rise 0.2%. Year-over-year CPI was up 4.1%, and core CPI was up 2.4%. Wells Fargo (WFC) reported earnings that were in-line with expectations, and noted it is finding more opportunities for acquisitions. Ambac (ABK) announced a plan to strengthen its capital base by issuing at least $ 1 bln in equity and equity-linked securities and by cutting its dividend 66%.
08:00 am : S&P futures vs fair value: -9.0. Nasdaq futures vs fair value: -23.0. Futures point to a negative start, but are off their worst levels. A disappointing earnings report from Intel (INTC) is weighing on the market. Intel issued first quarter earnings guidance that was below the consensus estimate, which is helping fuel concerns of a broader economic slowdown. JPMorgan’s (JPM) earnings report helped give futures a slight boost. JPMorgan missed its earnings expectations, but its write-down was relatively modest, which helped send its shares higher in pre-market trading. The futures market pared some more of its losses on news that BEA Systems (BEAS) is going to be acquired by Oracle (ORCL) for $19.375 per share.
06:20 am : S&P futures vs fair value: -12.2. Nasdaq futures vs fair value: -29.5.
06:16 am : FTSE...5945.10...-80.50...-1.3%. DAX...7471.85...-94.53...-1.3%.
06:16 am : Nikkei...13504.51...-468.12...-3.4%. Hang Seng...24450.85...-1386.93...-5.4%.
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