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Market Update 080326
http://biz.yahoo.com/mu/update.html
4:25 pm : The stock market has been on a bull run recently, but it got tripped up Wednesday by a number of familiar concerns.

In particular, the health of the financial sector was brought back into question by the analyst at Oppenheimer & Co. who slashed first quarter earnings estimates for Bank of America (BAC 39.84, -1.13), Citigroup (C 22.05, -1.37), JPMorgan Chase (JPM 44.11, -1.95) and Wachovia (WB 28.02, -2.02) to reflect expected mortgage and CDO related write-downs.

The estimate revision, combined with press reports the private equity deal for Clear Channel Communications (CCU 26.92, -5.64) was on the verge of collapse and a warning from Deutsche Bank (DB 114.31, -1.29) that it might not hit its 2008 profit target, set the tone for a weak start for the financial sector and the broader market.

In turn, a weaker than expected Durable Orders report for February didn't do anything to improve the morning mood.

Prior to the start of trading, the Census Bureau indicated durable orders fell 1.7% against the market's expectation for a 0.7% increase and a 4.7% decline in January. Excluding transportation, orders dropped 2.6%. Similarly, nondefense capital goods orders excluding transportation, a measure seen as a proxy for business investment, also declined 2.6%.

Shortly after the market opened, it was reported that February new home sales declined 1.8% from January to an annualized rate of 590K units. The latter was actually ahead of the 578K consensus estimate, yet it failed to inspire much enthusiasm given the accompanying indication that inventory remained unchanged at 9.8 months worth of supply.

Selling pressure then picked up when Treasury Secretary Paulson all but suggested in a speech to the U.S. Chamber of Commerce that Wall Street investment firms should be subjected to increased regulation if they are going to borrow from the Fed. The related stocks faded to their worst levels of the session in the wake of that view, compounding the losses for the financial sector, which dropped 3.6% at its worst level of the day.

The broader market tried to rebound in the afternoon trade after re-testing its morning lows. Bear Stearns (BSC 11.21, +0.27) was an initial standout in that effort after headlines crossed the wires that Senator Dodd said the JPMorgan Chase transaction raised serious questions and that he was going to hold a hearing on the market turmoil.

The recovery try ultimately failed, though, as buyers lacked conviction in today's trade. One notable exception in that respect was seen in oil prices, which jumped $4.94, or 4.9%, after a weekly inventory report from the Dept. of Energy showed a build in stockpiles that was much smaller than expected. Oil led a 2.0% jump in the CRB Index, which also got a boost from a weakening dollar.

Other headlines of note Wednesday included an announcement from Motorola (MOT 10.02, +0.26) that it plans to split into two, independent publicly-traded companies, word from Ford (F 5.87, -0.13) that it sold its Jaguar Land Rover operations to Tata Motors (TTM 16.18, -1.18) for approximately $2.3 billion, and news that AMR Corp. (AMR 8.61, -1.02) canceled 300 flights to reinspect bundled wires on its MD-80 aircraft.DJ30 -109.74 DJTA -1.8% NASDAQ -16.69 NQ100 -0.4% R2K -0.5% SP400 -0.8% SP500 -11.86 NASDAQ Dec/Adv/Vol 1664/1267/1.90 bln NYSE Dec/Adv/Vol 1830/1315/1.43 bln

3:30 pm : After spiking higher, the session's late recovery effort has waned and stocks are dropping in the session's home stretch.

Notably, large-cap tech stocks Apple (AAPL 145.51, +4.53) and Google (GOOG 460.06, +9.28) have helped the Nasdaq (-0.5%) outperform its counterparts.

The Dow Jones World Index, excluding the U.S., has made an impressive 1.7% advance today. The index remains down 8.6% year-to-date.

Crude closed $4.60 higher on the Nymex, settling at $105.85 per barrel. Earlier today the Department of Energy announced crude reserves grew less than expected.DJ30 -110.47 NASDAQ -16.94 SP500 -10.73 NASDAQ Dec/Adv/Vol 1684/1204/1.51 bln NYSE Dec/Adv/Vol 1802/1313/1.06 bln

3:00 pm : After testing session lows, the stock market is trending higher. Each of the major indices are spiking higher, reaching some of their best levels since opening bell.

Still, among the major economic sectors, only energy (+2.3%), utilities (+0.6%), and materials (+0.1%) are in the green.

DJ30 -108.19 NASDAQ -18.87 SP500 -10.87 NASDAQ Dec/Adv/Vol 1739/1137/1.35 bln NYSE Dec/Adv/Vol 1861/1233/931 mln

2:30 pm : Stocks attempted to peel off their recent lows, turning noticeably higher. The recovery effort, however, has been short-lived as the major indices head further into negative territory.

Apple (AAPL 144.30, +3.32) has been a strong performer, despite the session's broad-based pessimism. Its shares have been advancing in recent sessions after falling more than 25% this year. Still, technology stocks remain down 1.5% this session and down almost 14% year-to-date.

The dollar, however, is continuing its slide. The dollar index is down more than 1.0% today, falling to its lowest level this week.

Separately, Dallas Fed President Fisher stated that the market troubles will take time to abate and the financial system is not at risk of failing.DJ30 -118.45 NASDAQ -23.93 SP500 -12.68 NASDAQ Dec/Adv/Vol 1766/1088/1.23 bln NYSE Dec/Adv/Vol 1924/1171/857 mln

2:00 pm : All three of the major indices are showing losses of 1.0%. Five of the ten major economic sectors have lost at least 1.0%. Financials are the session's worst offender, down 3.4%, near their session low.

Gold closed the session higher. The yellow metal ended at $949.20 per ounce, up $14.20.

Commodities have been a standout this session. The CRB Commodities Index is up 1.7%. DJ30 -130.01 NASDAQ -29.78 SP500 -14.58 NASDAQ Dec/Adv/Vol 1822/996/1.10 bln NYSE Dec/Adv/Vol 2009/1077/772 mln

1:30 pm : Afternoon trading is relatively subdued. Each of the major indices remains largely unchanged from previous levels.

Chicago Fed President Evans stated today that the fiscal stimulus package will begin having an impact in the second and third quarters. Notably, Evans has seen little or no growth in recent months and expects weakness will persist in the first half of the year with improvement in the second half of 2008.

Exxon-Mobil (XOM 86.34, +1.14), Schlumberger (SLB 85.68, +3.04), ConocoPhillips (COP 75.97, +1.44), and Apache (APA 119.15, +6.21) are providing the most influential boost to energy (+2.0%). The energy sector remains the day's leader, but it has pared some of the session's gains.DJ30 -115.19 NASDAQ -26.90 SP500 -12.89 NASDAQ Dec/Adv/Vol 1833/966/1.0 bln NYSE Dec/Adv/Vol 1996/1079/713 mln

1:00 pm : The Dow Jones and S&P 500 are each sporting losses of 1.0%. The Nasdaq is not much better, standing 0.9% lower.

Of the Dow's 30 components, only seven members are trading higher; their advances are minimal. Alcoa (AA 36.12, +0.38) is making the largest percentage gain, while Citigroup (C 22.15, -1.27) is making the largest percentage drop.

Bond insurer FGIC says it has fallen below legally required statutory capital levels, according to Dow Jones reports. FGIC has already stopped writing new insurance policies and has applied for permission to split its municipal and structured finance insurance businesses.DJ30 -138.56 NASDAQ -29.21 SP500 -13.96 NASDAQ Dec/Adv/Vol 1839/951/930 mln NYSE Dec/Adv/Vol 2009/1061/662 mln

12:30 pm : Stocks continue struggling to sustain an upturn. Early afternoon trading remains choppy.

Decliners on the NYSE outpace advancing issues by nearly 2-to-1.

Energy (+2.0%) has eased off its session high. Exxon-Mobil (XOM 86.47, +1.27) is providing the most influential boost to the sector. Meanwhile, financials (-2.8%) have tapered losses, but remain the session's worst performer, dragged lower by Citigroup (C 22.19, -1.23).DJ30 -106.64 NASDAQ -26.02 SP500 -11.23 NASDAQ Dec/Adv/Vol 1814/956/846 mln NYSE Dec/Adv/Vol 1943/1098/599 mln

12:05 pm : Stocks began the day in negative territory. The major indices have been restricted to the red for the entire session.

The major indices were hampered from the start as a pre-market report indicated that durable goods orders for February declined 1.7%, which is worse than the 0.7% advance economists came to expect. January's durable goods orders initially posted a 5.3% retreat, but were revised upward to a 4.7% decrease. Excluding transportation, new orders for February fell 2.6%, which is also below the 0.3% downturn that economists expected. As for January, new orders that exclude transportation were revised higher to a 1.0% decline from the initial reading of a 1.6% decline.

Stocks saw a brief move off their early morning lows as market participants received word that February's new home sales totaled 590,000, which is better than the 578,000 that economists projected. January's reading was revised higher to 601,000 from 590,000.

Financials have been the session's primary laggard. An analyst at Oppenheimer trimmed earnings estimates for a broad range of banks. Bank of America (BAC 39.85, -1.12), JP Morgan Chase (JPM 44.76, -1.30), Citigroup (C 22.25, -1.17), and Wachovia (WB 28.54, -1.50) are all expected to report earnings results below analysts' initial forecasts.

Energy has been the best performer. The sector has made strong advances after the Department of Energy announced that crude oil inventories grew by 88,000 barrels. A build of 1.8 million barrels was expected.

As a result, oil prices have surged more than 4% to $105.37 per barrel.DJ30 -108.44 NASDAQ -25.75 SP500 -10.51 NASDAQ Dec/Adv/Vol 1833/903/774 mln NYSE Dec/Adv/Vol 1932/1079/549 mln

11:30 am : Stocks continue to trade in choppy fashion. The Dow Jones, S&P 500, and Nasdaq all remain well into negative territory, though off their respective lows.

Commodities are back in favor this session. The CRB Commodities Index is up more than 1%. Materials (+0.1%) have broken out of negative territory and are now posting a modest gain for the session.DJ30 -111.04 NASDAQ -26.29 SP500 -11.12 NASDAQ Dec/Adv/Vol 1800/890/656 mln NYSE Dec/Adv/Vol 1976/1003/466 mln

11:10 am : Stocks have come off their lows. Each of the major economic sectors has struggled today, with the exception of energy (+2.1%) and utilities (+0.2%).

Energy continues to benefit after a Department of Energy report indicating weekly crude inventories rose less than expected, while utilities are gaining favor from investors seeking safety.

Such safety-seeking has also given Treasuries a lift. The benchmark 10-year note is up 11 ticks and is yielding 3.47%.

Separately, U.S. Treasury Secretary Paulson stated today that housing remains the biggest risk to the economy. Paulson also noted that he supports more Fed oversight of primary dealers.DJ30 -123.99 NASDAQ -27.13 SP500 -12.78 NASDAQ Dec/Adv/Vol 1830/833/571 mln NYSE Dec/Adv/Vol 2028/914/399 mln

10:35 am : The positive reaction to February's new home sales data has faded and stocks have fallen to their worst levels.

Oil inventories for the week ending March 22 rose 88,000 barrels, according to the Department of Energy. The increase was less than the expected build of 1.8 million barrels. In turn, oil prices have made a sudden run up to more than $104 per barrel, up roughly 3.3%.

The energy sector is the day's leader, up 1.7% this session.DJ30 -104.04 NASDAQ -23.43 SP500 -10.61 NASDAQ Dec/Adv/Vol 1760/811/374 mln NYSE Dec/Adv/Vol 1904/965/269 mln

10:05 am : Stocks have pulled off their lows after positive new home sales data hit the wires.

February new home sales totaled 590,000, which is better than the 578,000 consensus forecast. January's initial reading of 588,000 was revised higher to 601,000.

New home sales slipped 1.8% month-over-month. Economists, on average, estimated sales would fall 1.7% month-over-month after January's downturn. January's new home sales initially reflected a 2.8% dip, but were revised higher to a 1.6% downturn.DJ30 -101.03 NASDAQ -21.15 SP500 -9.80 NASDAQ Dec/Adv/Vol 1700/746/228 mln NYSE Dec/Adv/Vol 1824/954/171 mln

09:40 am : Stocks opened on a lower note Wednesday. The financial sector (-2.1%) is the heaviest laggard in the early going.

Within the financial sector, large-cap bank stocks are being pushed lower. Oppenheimer cut earnings estimates for Bank of America (BAC 40.05, -0.92), Citigroup (C 22.73, -0.69), JP Morgan Chase (JPM 44.87, -1.19), and Wachovia (WB 29.12, -0.92) . The S&P 500 banking index is down 2.5%.

Citigroup has agreed to pay $1.66 billion to settle MegaClaims litigation in the Enron bankruptcy case.DJ30 -87.90 NASDAQ -17.76 SP500 -10.19 NASDAQ Dec/Adv/Vol 1541/682/86 mln NYSE Dec/Adv/Vol 1794/748/67 mln

09:15 am : S&P futures vs fair value: -8.0. Nasdaq futures vs fair value: -11.5. Pessimism in the pre-market has eased during the last hour, but futures still indicate a lower start to today's trading.

09:00 am : S&P futures vs fair value: -7.8. Nasdaq futures vs fair value: -12.8. The stock market remains set to open in negative territory, though to a lesser extent than previously indicated.

08:35 am : S&P futures vs fair value: -10.0. Nasdaq futures vs fair value: -15.0. February's durable goods orders declined 1.7%. Economists expected orders to advance 0.7%. January's durable goods orders initially showed a 5.3% retreat, but were revised up to a less severe 4.7% retreat. Excluding transportation, new orders for February fell 2.6%, worse than the decrease of 0.3% economists expected. Excluding transportation, January's durable goods orders were revised higher from a 1.6% decline to a 1.0% decline. Futures continue to indicate a negative start.

08:00 am : S&P futures vs fair value: -9.4. Nasdaq futures vs fair value: -12.8. Motorola (MOT) has announced its board has began a process to split the company into two independent, publicly traded companies, while an article in The Wall Street Journal noted Sprint Nextel (S) and Clearwire (CLWR) have been named possible operators for a new wireless company created by Comcast (CMCSA) and Time Warner (TWX). Futures currently indicate a down open to today's session.

06:18 am : S&P futures vs fair value: -7.8. Nasdaq futures vs fair value: -10.8.

06:18 am : FTSE...5659.30...-29.80...-0.5%. DAX...6510.72...-13.39...-0.2%.

06:18 am : Nikkei...127016.63...-38.59...-0.3%. Hang Seng...22617.01...+152.49...+0.7%.