AI
Thursday, March 27, 2008 11:34:09 PM
Market Update 080327
http://biz.yahoo.com/mu/update.html
4:30 pm : The major indices finished Thursday with steep losses in volatile trade. A disappointing report from a tech bellwether and continued concerns over financial companies drove the market lower. The stock market ended the day near its lows, sending it into negative territory for the month.
Oracle (ORCL 19.43, -1.51) reported third quarter non-GAAP earnings rose 23%, which met analysts' expectations. However, its stock got clipped 7.2% after the company reported revenue that was just short of estimates, and said on its conference call that customers were a little more cautious at the end of its quarter.
Disappointment over Oracle's view on customer behavior weighed on the tech sector (-2.4%), which finished the day as the main laggard. Google (GOOG 444.08, -14.11) also got hit on reports that its most recent "pay per click" number was weak. Also fueling selling interests was news Lehman Brothers cut its price target to $580 on shares of Google.
Following the completion of the Fed's first Term Securities Lending Facility auction, the Fed said it will be lending $75 billion for 28 days. The bid-to-cover ratio came in at 1.15--which is the volume of bids divided by the total of funds available at auction. The stop-out rate--the lowest rate the Fed accepted--was 0.33%. The auctions stand to improve liquidity by lending financial firms highly liquid Treasury securities in return for less liquid assets as collateral.
The stock market’s initial response was positive to the TSLF auction results, as the low stop-out rate might indicate that financial firms are not desperate for capital. Sentiment soon soured as the market fell to its session lows.
Financials had a volatile day of trading, trading up as much as 0.9%, and ending the day at its lows with a loss of 2.0%. The sector was a laggard for most of the session due to negative rumors regarding Lehman Brothers (LEH 38.71, -3.78) and a number of earnings estimate cuts.
Oppenheimer shaved its earnings estimates on Merrill Lynch (MER 41.90, -2.52) and UBS (UBS 29.13, -0.03). Lehman Brothers cut its estimates on several banks. Some of the bigger names on the estmate chopping block included Citigroup (C 21.79, -0.26), Bank of America (BAC 38.64, -1.20) and Wells Fargo (WFC 30.26, -0.55).
Interestingly, there was not a Treasury market flight-to-quality as stocks fell. However, defensive oriented sectors utilities (+0.6%), health care (-0.1%) and consumer staples (-0.2%) outperformed on a relative basis.
Economic data were better than expected, but it was not enough to stave off selling pressure. New unemployment claims for the week ended March 22 fell to 366,000 from 375,000. This was slightly better than the 371,000 claims economists expected.
Separately, final fourth quarter GDP was left unchanged at 0.6%. However, consumption was revised higher to 2.3% from 1.9%, and the price deflator was revised downward to 2.4% from 2.7% In other words, the numbers showed better than expected spending, and lower than expected inflation.
In commodity trading, crude oil extended Wednesday’s steep gains. The commodity ending the day up 1.2% to $107.21 per barrel on news an attack in Iraq caused a pipeline explosion. As a whole, the CRB Commodity Index advanced 0.7%.
DJ30 -120.40 NASDAQ -43.53 NQ100 -2.2% R2K -1.4% SP400 -1.2% SP500 -15.37 NASDAQ Dec/Adv/Vol 1804/1086/2.03 bln NYSE Dec/Adv/Vol 1965/1172/1.43 bln
3:30 pm : The major indices are falling back toward their pre-Fed auction levels. Financials made it all the way back to positive territory, but are now down 1%.
At current levels, the S&P 500 is up 0.2% this month. If it holds onto a gain, it will mark the first positive monthly finish since October. If the market ends the month in the red, the market will have posted a loss for five consecutive months--the first time since 1990.DJ30 -58.45 NASDAQ -28.73 SP500 -7.22 NASDAQ Dec/Adv/Vol 1582/1265/1.64 bln NYSE Dec/Adv/Vol 1637/1459/1.11 bln
3:05 pm : Action has been choppy following the results of the Fed's new auction. The stock market climbed to the unchanged mark, but is now going back on the retreat.
The Fed will be lending $75 billion for 28 days due to the completion of itsfirst Term Securities Lending Facility auction. The bid-to-cover ratio came in at 1.15--which is the amount of bids divided by what was lent out. The stop-out rate--the lowest rate the Fed accepted--was 0.33%.
The TSLF auction results were akin to a seller listing a house for $300K in a weak housing market only to see multiple bids come in at $200K. It can be said that demand for the asset is technically high, but only at a discounted price, implying the buyers don't really need to buy the asset but they will if they get it at an extremely discounted rate. The bid-to-cover ratio at 1.15 shows that there is demand, but the stop-out rate at 0.33% indicates it isn't really needed.DJ30 -41.78 NASDAQ -25.01 SP500 -4.52 NASDAQ Dec/Adv/Vol 1534/1303/1.50 bln NYSE Dec/Adv/Vol 1505/1590/995 mln
2:35 pm : Selling pressure eases as the major indices trade modestly above their worst levels of the session. Trade has been choppy, although the S&P 500's range has been somewhat tight.
National City (NCC 11.73, +0.28) is outperforming financials (-0.6%) and the market. The Financial Times reported National City has two serious bidders, according to a source. The company's stock has fallen 69% from its 52-week high, compared with the financial sector's 33% drop.
Southwest Airlines (LUV 12.37, +0.57) is posting a strong 4.8% gain in the face of rising crude prices. The airline is up 2.0% this year, compared to the Amex Airline Index drop of 22.6%. Meanwhile, AMR Corp (AMR 8.40, -0.25) and Delta (DAL 8.41, -0.33) are facing steep declines. According to reports, the companies have cancelled additional flights in order to provide inspections.DJ30 -47.05 NASDAQ -26.86 SP500 -5.18 NASDAQ Dec/Adv/Vol 1540/1273/1.37 bln NYSE Dec/Adv/Vol 1533/1550/907 mln
2:00 pm : The major indices go on the retreat in quick fashion. The S&P 500's loss of 0.4% is modest, although the Nasdaq is posting a more substantial loss of 1.1%. There is no specific news item to account for the selling interest. Financials (-1.1%) are seeing the sharpest decline.
Crude has rallied to session highs. Crude prices are currently up 2.0% to $107.95 per barrel. Prices are down 3.6% from their all-time high of $111.80 reached on March 17.DJ30 -54.54 NASDAQ -24.88 SP500 -5.36 NASDAQ Dec/Adv/Vol 1573/1227/1.23 bln NYSE Dec/Adv/Vol 1522/1541/814 mln
1:30 pm : The stock market is fluctuating near the unchanged mark. On the NYSE advancers outpace decliners by 5-to-4, while on the Nasdaq decliners hold a slight edge over advancers.
European markets fared better than U.S. stocks. Germany's Dax rose 1.4%, and London's FTSE gained 1.0%.DJ30 -10.58 NASDAQ -17.91 SP500 -0.92 NASDAQ Dec/Adv/Vol 1440/1332/1.13 bln NYSE Dec/Adv/Vol 1362/1688/742 mln
1:00 pm : The stock market climbs to a fresh high and then retreats a bit. The Dow and S&P 500 are now trading in positive territory.
Within the S&P 500, 322 stocks are trading higher. Exxon Mobil (XOM 87.34, +1.07) and AT&T (T 38.03, +0.27) are leading the way. Tech companies take up eight of the top ten laggard spots. Oracle (ORCL 19.43, -1.51) and Google (GOOG 445.9, -12.50) are the main laggards.DJ30 +5.78 NASDAQ +1.05 SP500 -15.11 NASDAQ Dec/Adv/Vol 1391/1358/1.03 bln NYSE Dec/Adv/Vol 1295/1739/682 mln
12:30 pm : The Dow and S&P 500 are trading near the unchanged mark due to a broad-based recovery. Seven of the ten sectors are now posting a gain, including financials (+0.1%). Advances are slight with the exception of utilities (+1.5%).
Cleveland Fed President Pianalto said the Fed has a responsibility to fund banks in stress. Meanwhile, Minneapolis Fed President Stern said market conditions are mixed, and that a credit crunch cannot be ruled out. Pianalto and Stern are currently FOMC voting members.
The Nasdaq continues to trail the broader market, although it is well off its low when it was down 1.5%.DJ30 -3.82 NASDAQ -16.73 SP500 +0.34 NASDAQ Dec/Adv/Vol 1404/1293/914 mln NYSE Dec/Adv/Vol 1379/1634/601 mln
12:05 pm : The market opened slightly higher due to better than expected economic reports, but turned south as financials reversed in the red and due to weakness in tech. At midday, stocks are have pared some of their losses, as the S&P 500 trades with a slight loss.
The Nasdaq Composite has been underperforming the S&P 500 due to a disappointing response to Oracle's (ORCL 19.48, -1.46) earnings report. The company reported third quarter earnings that met analysts' expectations. However, its stock is getting hammered after the company reported revenue that was just short of estimates, and said on its conference call that customers were a little more cautious at the end of its quarter.
Disappointment over Oracle's view on consumer behavior has spread to the tech sector (-1.4%), which is the main laggard. Google (GOOG 446.36, -11.83) is showing weakness on reports that its "pay per click" number will be weak and due to having its price target cut at Lehman Brothers.
Financials (-0.6%) have had a volatile day of trading. The sector was a leader in the early-going with a gain of 0.9%, and then fell to a laggard position when it was down as much 1.9%. The sector fell to its worst levels on rumors that a large number of puts on financial stocks had been bought--which indicates traders expect a price drop. Financial stocks pared some of their losses after Lehman Brothers (LEH 40.01, -2.48) said rumors about the company are "unfounded," according to Reuters.
Several financial companies had their earnings estimates cut this morning. Oppenheimer shaved its earnings estimates on Merrill Lynch (MER 43.86, -0.56) and UBS (UBS 29.73, +0.57). Lehman Brothers cut its estimates on several banks. Some of the bigger names include Citigroup (C 22.00, -0.05), Bank of America (BAC 39.42, -0.42) and Wells Fargo (WFC 30.80, -0.01).
A pair of better than expected economic releases is helping to mitigate some selling pressure. Initial jobless claims fell to 366,000 from 375,000, which was slightly better than the expected.
Separately, final fourth quarter GDP was left unchanged at 0.6%. However, consumption was revised higher to 2.3% from 1.9%, and the price deflator was revised downward to 2.4% from 2.7% In other words, the numbers indicate better than expected spending, and lower than expected inflation.
In commodity trading, crude oil is up 1.3% to $107.23 per barrel on news an attack in Iraq caused a pipeline explosion. As a whole, the CRB Commodity Index is down 0.2%. DJ30 -33.20 NASDAQ -2.93 SP500 -20.46 NASDAQ Dec/Adv/Vol 1513/1179/826 mln NYSE Dec/Adv/Vol 1488/1523/536 mln
11:30 am : The stock market is in the red, but off its worst level. Energy is lending some support, as it is posting a gain of 0.6%. Crude has rebounded a bit, and is up 0.9%. Over the last two days energy is up 2.8%, compared to the market's 1.2% decline. Crude is up 5.4% over the last two days. DJ30 -44.37 NASDAQ -28.15 SP500 -5.06 NASDAQ Dec/Adv/Vol 1579/1070/696 mln NYSE Dec/Adv/Vol 1598/1372/446 mln
11:00 am : The major indices come off their worst levels but remain in the red. The two most heavily-weighted sectors--financials with a weighting of 17.7% and tech with a weighting 15.7%--are the main laggards.
As previously noted, financials (-1.1%) have had a sharp decline from their session highs, with notable weakness within the investment banks & brokerages group (-2.4%). Briefing.com notes that there has been a notable amount of put buying in big financial names such as Citigroup (C 21.58, -0.47), Lehman Brothers (LEH 40.30, -2.19) and Merrill Lynch (MER 43.61, -0.81). A put is an option contract that gives the buyer a right to sell a stock at a particular price. A trader that buys a put on a stock is betting that the stock's price will decline.DJ30 -58.13 NASDAQ -29.67 SP500 -7.44 NASDAQ Dec/Adv/Vol 1564/995/561 mln NYSE Dec/Adv/Vol 1676/1246/359 mln
10:35 am : The S&P and Dow join the Nasdaq in the red as they fall to their worst levels of the session. With the exception of utilities (+1.3%), all ten of the economic sectors have come off their highs. Financials are taking the brunt of the selling pressure.
The sector was up 0.9% at its highs, and is now down 1.6%. Shares of Lehman Brothers (LEH 39.26, -3.23) are getting hammered. There is no specific news item that accounts for the selling interest at this time.
Several financial companies had their earnings estimates cut this morning. Oppenheimer shaved its earnings estimates on Merrill Lynch (MER 42.94, -1.48) and UBS (UBS 29.32, +0.16). Lehman Brothers dropped its estimates on several banks, including Citigroup (C 21.88, -0.17), Bank of America (BAC 39.16, -0.68) and Wells Fargo (WFC 30.23, -0.58).
Crude oil is currently trading up 0.6% to $106.52. It was up as much as 1.7% in overnight trade on word of an attack that caused an Iraqi pipeline explosion. DJ30 -71.15 NASDAQ -32.80 SP500 -9.35 NASDAQ Dec/Adv/Vol 1578/923/425 mln NYSE Dec/Adv/Vol 1693/1190/272 mln
10:00 am : The major indices continue to trade in mixed fashion. Seven of the ten economic sectors are trending higher, however gains within those sectors are modest. The market's advance is being limited due to weakness in the heavily-weighted tech sector (-1.2%).
Oracle (ORCL 19.63, -1.31) is leading the way lower due to the negative response to its earnings report. Google (GOOG 443.71, -14.48) is also a laggard. It is under pressure on reports the company did not get as many paid clicks as expected. Also, Google had its price target cut at Lehman Brothers.
The real estate management & development (+2.4%) and homebuilding (+1.8%) groups are showing strength. Homebuilder Lennar (LEN 17.94, +0.35) posted a loss of $0.56 per share, which was better than the consensus estimate that called for a loss of $1.07.DJ30 +24.67 NASDAQ -14.96 SP500 +1.32 NASDAQ Dec/Adv/Vol 1375/968/224 mln NYSE Dec/Adv/Vol 1321/1445/147 mln
09:40 am : The major indices open in mixed fashion. The Nasdaq is trailing due to a negative response to Oracle's (ORCL) earnings report. The company said on its call that customers got a little more cautious at the end of its quarter.
Better than expected economic data helped offset some disappointment over Oracle. Initial jobless claims fell to 366,000 from 375,000, which was slightly better than the expected. Separately, final fourth quarter GDP was left unchanged at 0.6%. However, consumption was revised higher to 2.3% from 1.9%, and the price deflator was revised downward to 2.4% from 2.7% In other words, the numbers indicate better than expected spending, and lower than expected inflation.DJ30 +23.29 NASDAQ -17.71 SP500 -0.58
09:14 am : S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: -13.8.
08:59 am : S&P futures vs fair value: +4.1. Nasdaq futures vs fair value: -9.2. S&P 500 futures climb to their best levels on the better than expected economic data. Boeing had its price target cut to $68 from $78 at Citigroup.
08:35 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: -12.0. S&P 500 futures now point to a higher start following the release of a pair of better than expected economic reports. New unemployment claims for the week ended March 22 fell to 366,000, from the prior reading of 375,000. This was slightly better than the 370,000 claims economists expected. The final reading of fourth quarter GDP was unchanged at +0.6%, while personal consumption was revised higher to 2.3% from 1.9%. The GDP Price Index was revised lower to 2.4% from 2.7%. In other news, Google (GOOG) had its price target cut to $580 at Lehman Brothers. American Express (AXP) is acquiring General Electric’s (GE) Corporate Payment Services for $1.1 billion in cash.
08:01 am : S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -18.0. Futures point to a lower open with the Nasdaq set to underperform. Traders have been disappointed with Oracle’s (ORCL) fiscal third quarter revenue, which is fueling selling pressure in the Nasdaq. Oppenheimer cut its first quarter earnings estimates on UBS (UBS) and Merrill Lynch (MER). ConAgra (CAG) reported earnings of $0.63, which topped estimates by $0.22. The company also issued upside guidance for full year 2008. The final fourth quarter GDP reading and the weekly initial jobless claims are set for release at 8:30 ET.
06:21 am : S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -8.3.
06:20 am : FTSE...5716.60...+56.20...+1.0%. DAX...6569.46...+80.20...+1.2%.
06:20 am : Nikkei...12604.58...-102.05...-0.8%. Hang Seng...22664.22...+47.21...+0.2%.
http://biz.yahoo.com/mu/update.html
4:30 pm : The major indices finished Thursday with steep losses in volatile trade. A disappointing report from a tech bellwether and continued concerns over financial companies drove the market lower. The stock market ended the day near its lows, sending it into negative territory for the month.
Oracle (ORCL 19.43, -1.51) reported third quarter non-GAAP earnings rose 23%, which met analysts' expectations. However, its stock got clipped 7.2% after the company reported revenue that was just short of estimates, and said on its conference call that customers were a little more cautious at the end of its quarter.
Disappointment over Oracle's view on customer behavior weighed on the tech sector (-2.4%), which finished the day as the main laggard. Google (GOOG 444.08, -14.11) also got hit on reports that its most recent "pay per click" number was weak. Also fueling selling interests was news Lehman Brothers cut its price target to $580 on shares of Google.
Following the completion of the Fed's first Term Securities Lending Facility auction, the Fed said it will be lending $75 billion for 28 days. The bid-to-cover ratio came in at 1.15--which is the volume of bids divided by the total of funds available at auction. The stop-out rate--the lowest rate the Fed accepted--was 0.33%. The auctions stand to improve liquidity by lending financial firms highly liquid Treasury securities in return for less liquid assets as collateral.
The stock market’s initial response was positive to the TSLF auction results, as the low stop-out rate might indicate that financial firms are not desperate for capital. Sentiment soon soured as the market fell to its session lows.
Financials had a volatile day of trading, trading up as much as 0.9%, and ending the day at its lows with a loss of 2.0%. The sector was a laggard for most of the session due to negative rumors regarding Lehman Brothers (LEH 38.71, -3.78) and a number of earnings estimate cuts.
Oppenheimer shaved its earnings estimates on Merrill Lynch (MER 41.90, -2.52) and UBS (UBS 29.13, -0.03). Lehman Brothers cut its estimates on several banks. Some of the bigger names on the estmate chopping block included Citigroup (C 21.79, -0.26), Bank of America (BAC 38.64, -1.20) and Wells Fargo (WFC 30.26, -0.55).
Interestingly, there was not a Treasury market flight-to-quality as stocks fell. However, defensive oriented sectors utilities (+0.6%), health care (-0.1%) and consumer staples (-0.2%) outperformed on a relative basis.
Economic data were better than expected, but it was not enough to stave off selling pressure. New unemployment claims for the week ended March 22 fell to 366,000 from 375,000. This was slightly better than the 371,000 claims economists expected.
Separately, final fourth quarter GDP was left unchanged at 0.6%. However, consumption was revised higher to 2.3% from 1.9%, and the price deflator was revised downward to 2.4% from 2.7% In other words, the numbers showed better than expected spending, and lower than expected inflation.
In commodity trading, crude oil extended Wednesday’s steep gains. The commodity ending the day up 1.2% to $107.21 per barrel on news an attack in Iraq caused a pipeline explosion. As a whole, the CRB Commodity Index advanced 0.7%.
DJ30 -120.40 NASDAQ -43.53 NQ100 -2.2% R2K -1.4% SP400 -1.2% SP500 -15.37 NASDAQ Dec/Adv/Vol 1804/1086/2.03 bln NYSE Dec/Adv/Vol 1965/1172/1.43 bln
3:30 pm : The major indices are falling back toward their pre-Fed auction levels. Financials made it all the way back to positive territory, but are now down 1%.
At current levels, the S&P 500 is up 0.2% this month. If it holds onto a gain, it will mark the first positive monthly finish since October. If the market ends the month in the red, the market will have posted a loss for five consecutive months--the first time since 1990.DJ30 -58.45 NASDAQ -28.73 SP500 -7.22 NASDAQ Dec/Adv/Vol 1582/1265/1.64 bln NYSE Dec/Adv/Vol 1637/1459/1.11 bln
3:05 pm : Action has been choppy following the results of the Fed's new auction. The stock market climbed to the unchanged mark, but is now going back on the retreat.
The Fed will be lending $75 billion for 28 days due to the completion of itsfirst Term Securities Lending Facility auction. The bid-to-cover ratio came in at 1.15--which is the amount of bids divided by what was lent out. The stop-out rate--the lowest rate the Fed accepted--was 0.33%.
The TSLF auction results were akin to a seller listing a house for $300K in a weak housing market only to see multiple bids come in at $200K. It can be said that demand for the asset is technically high, but only at a discounted price, implying the buyers don't really need to buy the asset but they will if they get it at an extremely discounted rate. The bid-to-cover ratio at 1.15 shows that there is demand, but the stop-out rate at 0.33% indicates it isn't really needed.DJ30 -41.78 NASDAQ -25.01 SP500 -4.52 NASDAQ Dec/Adv/Vol 1534/1303/1.50 bln NYSE Dec/Adv/Vol 1505/1590/995 mln
2:35 pm : Selling pressure eases as the major indices trade modestly above their worst levels of the session. Trade has been choppy, although the S&P 500's range has been somewhat tight.
National City (NCC 11.73, +0.28) is outperforming financials (-0.6%) and the market. The Financial Times reported National City has two serious bidders, according to a source. The company's stock has fallen 69% from its 52-week high, compared with the financial sector's 33% drop.
Southwest Airlines (LUV 12.37, +0.57) is posting a strong 4.8% gain in the face of rising crude prices. The airline is up 2.0% this year, compared to the Amex Airline Index drop of 22.6%. Meanwhile, AMR Corp (AMR 8.40, -0.25) and Delta (DAL 8.41, -0.33) are facing steep declines. According to reports, the companies have cancelled additional flights in order to provide inspections.DJ30 -47.05 NASDAQ -26.86 SP500 -5.18 NASDAQ Dec/Adv/Vol 1540/1273/1.37 bln NYSE Dec/Adv/Vol 1533/1550/907 mln
2:00 pm : The major indices go on the retreat in quick fashion. The S&P 500's loss of 0.4% is modest, although the Nasdaq is posting a more substantial loss of 1.1%. There is no specific news item to account for the selling interest. Financials (-1.1%) are seeing the sharpest decline.
Crude has rallied to session highs. Crude prices are currently up 2.0% to $107.95 per barrel. Prices are down 3.6% from their all-time high of $111.80 reached on March 17.DJ30 -54.54 NASDAQ -24.88 SP500 -5.36 NASDAQ Dec/Adv/Vol 1573/1227/1.23 bln NYSE Dec/Adv/Vol 1522/1541/814 mln
1:30 pm : The stock market is fluctuating near the unchanged mark. On the NYSE advancers outpace decliners by 5-to-4, while on the Nasdaq decliners hold a slight edge over advancers.
European markets fared better than U.S. stocks. Germany's Dax rose 1.4%, and London's FTSE gained 1.0%.DJ30 -10.58 NASDAQ -17.91 SP500 -0.92 NASDAQ Dec/Adv/Vol 1440/1332/1.13 bln NYSE Dec/Adv/Vol 1362/1688/742 mln
1:00 pm : The stock market climbs to a fresh high and then retreats a bit. The Dow and S&P 500 are now trading in positive territory.
Within the S&P 500, 322 stocks are trading higher. Exxon Mobil (XOM 87.34, +1.07) and AT&T (T 38.03, +0.27) are leading the way. Tech companies take up eight of the top ten laggard spots. Oracle (ORCL 19.43, -1.51) and Google (GOOG 445.9, -12.50) are the main laggards.DJ30 +5.78 NASDAQ +1.05 SP500 -15.11 NASDAQ Dec/Adv/Vol 1391/1358/1.03 bln NYSE Dec/Adv/Vol 1295/1739/682 mln
12:30 pm : The Dow and S&P 500 are trading near the unchanged mark due to a broad-based recovery. Seven of the ten sectors are now posting a gain, including financials (+0.1%). Advances are slight with the exception of utilities (+1.5%).
Cleveland Fed President Pianalto said the Fed has a responsibility to fund banks in stress. Meanwhile, Minneapolis Fed President Stern said market conditions are mixed, and that a credit crunch cannot be ruled out. Pianalto and Stern are currently FOMC voting members.
The Nasdaq continues to trail the broader market, although it is well off its low when it was down 1.5%.DJ30 -3.82 NASDAQ -16.73 SP500 +0.34 NASDAQ Dec/Adv/Vol 1404/1293/914 mln NYSE Dec/Adv/Vol 1379/1634/601 mln
12:05 pm : The market opened slightly higher due to better than expected economic reports, but turned south as financials reversed in the red and due to weakness in tech. At midday, stocks are have pared some of their losses, as the S&P 500 trades with a slight loss.
The Nasdaq Composite has been underperforming the S&P 500 due to a disappointing response to Oracle's (ORCL 19.48, -1.46) earnings report. The company reported third quarter earnings that met analysts' expectations. However, its stock is getting hammered after the company reported revenue that was just short of estimates, and said on its conference call that customers were a little more cautious at the end of its quarter.
Disappointment over Oracle's view on consumer behavior has spread to the tech sector (-1.4%), which is the main laggard. Google (GOOG 446.36, -11.83) is showing weakness on reports that its "pay per click" number will be weak and due to having its price target cut at Lehman Brothers.
Financials (-0.6%) have had a volatile day of trading. The sector was a leader in the early-going with a gain of 0.9%, and then fell to a laggard position when it was down as much 1.9%. The sector fell to its worst levels on rumors that a large number of puts on financial stocks had been bought--which indicates traders expect a price drop. Financial stocks pared some of their losses after Lehman Brothers (LEH 40.01, -2.48) said rumors about the company are "unfounded," according to Reuters.
Several financial companies had their earnings estimates cut this morning. Oppenheimer shaved its earnings estimates on Merrill Lynch (MER 43.86, -0.56) and UBS (UBS 29.73, +0.57). Lehman Brothers cut its estimates on several banks. Some of the bigger names include Citigroup (C 22.00, -0.05), Bank of America (BAC 39.42, -0.42) and Wells Fargo (WFC 30.80, -0.01).
A pair of better than expected economic releases is helping to mitigate some selling pressure. Initial jobless claims fell to 366,000 from 375,000, which was slightly better than the expected.
Separately, final fourth quarter GDP was left unchanged at 0.6%. However, consumption was revised higher to 2.3% from 1.9%, and the price deflator was revised downward to 2.4% from 2.7% In other words, the numbers indicate better than expected spending, and lower than expected inflation.
In commodity trading, crude oil is up 1.3% to $107.23 per barrel on news an attack in Iraq caused a pipeline explosion. As a whole, the CRB Commodity Index is down 0.2%. DJ30 -33.20 NASDAQ -2.93 SP500 -20.46 NASDAQ Dec/Adv/Vol 1513/1179/826 mln NYSE Dec/Adv/Vol 1488/1523/536 mln
11:30 am : The stock market is in the red, but off its worst level. Energy is lending some support, as it is posting a gain of 0.6%. Crude has rebounded a bit, and is up 0.9%. Over the last two days energy is up 2.8%, compared to the market's 1.2% decline. Crude is up 5.4% over the last two days. DJ30 -44.37 NASDAQ -28.15 SP500 -5.06 NASDAQ Dec/Adv/Vol 1579/1070/696 mln NYSE Dec/Adv/Vol 1598/1372/446 mln
11:00 am : The major indices come off their worst levels but remain in the red. The two most heavily-weighted sectors--financials with a weighting of 17.7% and tech with a weighting 15.7%--are the main laggards.
As previously noted, financials (-1.1%) have had a sharp decline from their session highs, with notable weakness within the investment banks & brokerages group (-2.4%). Briefing.com notes that there has been a notable amount of put buying in big financial names such as Citigroup (C 21.58, -0.47), Lehman Brothers (LEH 40.30, -2.19) and Merrill Lynch (MER 43.61, -0.81). A put is an option contract that gives the buyer a right to sell a stock at a particular price. A trader that buys a put on a stock is betting that the stock's price will decline.DJ30 -58.13 NASDAQ -29.67 SP500 -7.44 NASDAQ Dec/Adv/Vol 1564/995/561 mln NYSE Dec/Adv/Vol 1676/1246/359 mln
10:35 am : The S&P and Dow join the Nasdaq in the red as they fall to their worst levels of the session. With the exception of utilities (+1.3%), all ten of the economic sectors have come off their highs. Financials are taking the brunt of the selling pressure.
The sector was up 0.9% at its highs, and is now down 1.6%. Shares of Lehman Brothers (LEH 39.26, -3.23) are getting hammered. There is no specific news item that accounts for the selling interest at this time.
Several financial companies had their earnings estimates cut this morning. Oppenheimer shaved its earnings estimates on Merrill Lynch (MER 42.94, -1.48) and UBS (UBS 29.32, +0.16). Lehman Brothers dropped its estimates on several banks, including Citigroup (C 21.88, -0.17), Bank of America (BAC 39.16, -0.68) and Wells Fargo (WFC 30.23, -0.58).
Crude oil is currently trading up 0.6% to $106.52. It was up as much as 1.7% in overnight trade on word of an attack that caused an Iraqi pipeline explosion. DJ30 -71.15 NASDAQ -32.80 SP500 -9.35 NASDAQ Dec/Adv/Vol 1578/923/425 mln NYSE Dec/Adv/Vol 1693/1190/272 mln
10:00 am : The major indices continue to trade in mixed fashion. Seven of the ten economic sectors are trending higher, however gains within those sectors are modest. The market's advance is being limited due to weakness in the heavily-weighted tech sector (-1.2%).
Oracle (ORCL 19.63, -1.31) is leading the way lower due to the negative response to its earnings report. Google (GOOG 443.71, -14.48) is also a laggard. It is under pressure on reports the company did not get as many paid clicks as expected. Also, Google had its price target cut at Lehman Brothers.
The real estate management & development (+2.4%) and homebuilding (+1.8%) groups are showing strength. Homebuilder Lennar (LEN 17.94, +0.35) posted a loss of $0.56 per share, which was better than the consensus estimate that called for a loss of $1.07.DJ30 +24.67 NASDAQ -14.96 SP500 +1.32 NASDAQ Dec/Adv/Vol 1375/968/224 mln NYSE Dec/Adv/Vol 1321/1445/147 mln
09:40 am : The major indices open in mixed fashion. The Nasdaq is trailing due to a negative response to Oracle's (ORCL) earnings report. The company said on its call that customers got a little more cautious at the end of its quarter.
Better than expected economic data helped offset some disappointment over Oracle. Initial jobless claims fell to 366,000 from 375,000, which was slightly better than the expected. Separately, final fourth quarter GDP was left unchanged at 0.6%. However, consumption was revised higher to 2.3% from 1.9%, and the price deflator was revised downward to 2.4% from 2.7% In other words, the numbers indicate better than expected spending, and lower than expected inflation.DJ30 +23.29 NASDAQ -17.71 SP500 -0.58
09:14 am : S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: -13.8.
08:59 am : S&P futures vs fair value: +4.1. Nasdaq futures vs fair value: -9.2. S&P 500 futures climb to their best levels on the better than expected economic data. Boeing had its price target cut to $68 from $78 at Citigroup.
08:35 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: -12.0. S&P 500 futures now point to a higher start following the release of a pair of better than expected economic reports. New unemployment claims for the week ended March 22 fell to 366,000, from the prior reading of 375,000. This was slightly better than the 370,000 claims economists expected. The final reading of fourth quarter GDP was unchanged at +0.6%, while personal consumption was revised higher to 2.3% from 1.9%. The GDP Price Index was revised lower to 2.4% from 2.7%. In other news, Google (GOOG) had its price target cut to $580 at Lehman Brothers. American Express (AXP) is acquiring General Electric’s (GE) Corporate Payment Services for $1.1 billion in cash.
08:01 am : S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -18.0. Futures point to a lower open with the Nasdaq set to underperform. Traders have been disappointed with Oracle’s (ORCL) fiscal third quarter revenue, which is fueling selling pressure in the Nasdaq. Oppenheimer cut its first quarter earnings estimates on UBS (UBS) and Merrill Lynch (MER). ConAgra (CAG) reported earnings of $0.63, which topped estimates by $0.22. The company also issued upside guidance for full year 2008. The final fourth quarter GDP reading and the weekly initial jobless claims are set for release at 8:30 ET.
06:21 am : S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -8.3.
06:20 am : FTSE...5716.60...+56.20...+1.0%. DAX...6569.46...+80.20...+1.2%.
06:20 am : Nikkei...12604.58...-102.05...-0.8%. Hang Seng...22664.22...+47.21...+0.2%.
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