Nasdaq Holds Out As Other Indexes Slide
BY ALAN R. ELLIOTT
Posted 6/4/2008
Encouraging economic data helped stocks rise early, but the market gave way to new concerns over the finance sector.
The Nasdaq backed off its highs, but ended up 0.9% — in the upper half of its trading range — helped by transportation and telecom stocks, and by a 3% jump by Qualcomm (QCOM).
The composite continued its outperformance of the major indexes, although it again failed to assert itself above the 200-day moving average.
Oil prices slumped for a second day, despite (another) surprise drop in inventories. Energy stocks dragged the NYSE down 0.5% as the NYSE Energy index slumped 1.9%.
The S&P 500 slipped from early gains to a fractional loss. The Dow notched a 0.1% drop.
Financials ended only slightly lower, as solid gains by American Express (AXP), Moody's (MCO) and Lehman Bros. (LEH) helped balance stiff losses by State Street (STT), MBIA (MBI) and CME Group (CME). Moody's warned it may downgrade bond insurers Ambac (ABK) and MBIA.
Preliminary figures showed volume higher on both exchanges, marking a second straight distribution day for the NYSE composite, Dow and S&P 500.
Still, most leading stocks avoided any real damage.
Among the day's bigger winners, Koppers Holdings (KOP) gapped up and rallied 4.99 to 48.12 in heavy trading. UBS raised the chemical maker to buy from neutral. The stock rebounded off its 40-week moving average and above their 10-week line. Shares remained 7% below their May 7 high.
NetLogic (NETL) hopped up 3.34 to 39.75. The jump put the maker of microprocessors for wireless devices 10% above a 36.17 buy point on a cup with handle. It also pushed shares above resistance near 38 and into a 52-week high.
3:15 p.m. Update: Gains Fade In Late Trade
By VINCENT MAO
Stocks took a turn for the worse in late trade Wednesday, with the Dow and NYSE composite falling back into negative territory. News that Moody's may downgrade bond insurers Ambac (ABK) and MBIA (MBI) soured the mood. Shares of the troubled financials slumped 17% and 15% respectively.
At 2:45 p.m. EDT, the Nasdaq had trimmed an earlier 1.5% gain to 1%. The S&P 500 was up 0.2%. The NYSE fell 0.2% and the Dow lost a fraction of a point.
Volume continued to track higher across the board, but the pace has slowed considerably.
NetLogic Microsystems (NETL) gained 2.93, or 8%, to a two-year high of 39.34. It's now 9% past a 36.17 buy point. The stock has nabbed several weekly price gains on strong volume and hasn't seen a week of heavy-volume selling for nearly four months. NetLogic is featured in today's edition of "Nasdaq Stocks In The News."
The Philadelphia Semiconductor Index rallied 1.4% and regained its 200-day moving average.
Praxair (PX) tacked on 2.24 to a new high of 97.29 in brisk trading. The industrial gas provider emerged from last week's pullback to its 10-week line.
On the downside, Alpha Natural Resources (ANR) dropped 2.06 to 82.30 in heavy trading. The coal producer continued to slump following Tuesday's reversal from all-time highs.
Solera Holdings (SLH) gapped down and shed 1.64, or 6% to 26.37 on huge trade. But the stock rebounded from session lows of 25. The software provider for the auto insurance industry came under pressure on news that shareholders agreed to sell 5 million shares.
1:15 p.m. Update: Techs Outshine As Stocks Build Momentum
By VINCENT MAO
Stocks ramped higher midday Wednesday, thanks to better-than-expected economic data and lower oil prices.
At 12:40 p.m. EDT, the Nasdaq charged up 1.3%, thanks to gains in Google (GOOG), Intuitive Surgical (ISRG) and Research In Motion (RIMM). But the tech-laden index eased after briefly poking above its 200-day moving average. The S&P 500 and NYSE composite climbed 0.5% and 0.1% respectively. Both regained their 50-day lines. And the Dow gained 0.3%.
Volume was tracking sharply higher on both exchanges.
Crude oil dropped $1.62 to $122.69 a barrel. Earlier, the Energy Information Administration said that oil inventories unexpectedly tumbled 4.8 million barrels. But gas stockpiles jumped 2.9 million barrels, more than tripling estimates.
Xilinx (XLNX) rallied 1 point to a near 52-week high of 27.92. The chipmaker said it will cut 7% of its work force as part of a reorganization plan. As a result, the firm expects to take charges of $18 million to $22 million, which would hurt quarterly earnings.
Rival Altera (ALTR) rose 0.81 to a seven-month peak of 23.70. Late Tuesday, the company guided Q2 sales toward the upper-end of its prior 1%-to-4% guidance. This implies revenue between $339.5 million and $349.5 million. Current views are for $344.8 million.
Copart (CPRT) gained 1.11 to 45.49 on strong quarterly results. But it slipped from a new all-time high of 46.35. Before the open, the provider of salvage vehicle auction services posted fiscal Q3 earnings of 52 cents a share, up 27% and 4 cents above views. Sales jumped 52%, the best in many quarters, thanks to acquisitions last year.
On the downside, oil stocks took heat.
GMX Resources (GMXR) gave up 2.21 to 52.09. The oil and gas producer is pulling back from three sessions of strong gains.
Group mate W&T Offshore (WTI) gapped down and shed 1.59 to 54.22 in fast trade. It hit a record high of 58.24 Monday, but has quickly pulled back.
11:15 a.m. Update: Stocks Edge Higher On Solid Volume
By ALAN R. ELLIOTT
Indexes improved as oil prices slipped slightly -- despite a sharp drop in inventories -- and the dollar continued to firm.
The Nasdaq climbed 1%, pulled higher by computer issues, telecoms and transports. The NYSE moved up to the break-even line, erasing earlier losses. Its technology and financial sectors showed the strongest gains. The Dow and the S&P 500 added 0.4%, with big caps running ahead of smaller issues.
Volume rose sharply higher on both exchanges.
Brazil's Bovespa index in Sao Paulo dove 1.4%, its second-straight loss. The real fell and home builders and retailers took the brunt of the drop. The culprit: The central bank seems sure to raise interest rates in the face of rising inflation.
Markets in China fell sharply. The Shanghai composite dropped 1.9% to a six-week low as the China Iron and Steel Association ordered a freeze on steel prices to pre-May 12 earthquake levels. Hong Kong's Hang Seng index slipped 1%.
In Japan, the Nikkei 225 added 1.6% as exporters rose on a strong dollar.
Stocks also traded sharply lower in Europe and the U.K. The sinkers included banking stocks and commodities issues. The CAC-40 in Paris slipped 1.6%. Frankfurt's DAX was down 1.2% and the FTSE 100 in London shed 1.6%.
Oil production engineering outfit Smith International (SII) leapt 2.54 to 79.38. The company said Tuesday it would buy W-H Energy (WHQ) for $3.2 billion. Smith's shares are testing support at the 10-week moving average after a breakout from a double-bottom base in April. W-H Energy added 0.96 to 98.14.
Green Mountain Coffee Roasters (GMCR) perked up 0.90 to 41.50 in fast trade. It's rebounding from a two-session pullback. Longbow started coverage of the stock with a buy rating.
On the downslope, EnerSys (ENS) dropped 1.34 to 31.38 in heavy trading. That erased the Tuesday's gains and then some. The industrial battery maker reports fiscal Q4 earnings on June 12. Profit is slated to climb 73% to 38 cents a share.
MasterCard (MA) edged down 2.59 to 304.81.
10:15 a.m. Update: Stocks Mixed In Early Trading
By VINCENT MAO
The major stock indexes were narrowly mixed early Wednesday, as equities struggled for direction after the recent sell-off.
At 10:06 a.m. EDT, the Nasdaq was up 0.2%, the Dow 0.1% and the S&P was mostly flat. The NYSE composite fell 0.3% due to weakness in oil issues.
Volume was tracking higher across the board.
The ISM services index fell to 51.7 in May from 52 in April, beating forecasts for a dip to 51.
Koppers Holdings (KOP) gapped up and rallied 4.98, or 12%, to 48.11 in heavy trading. UBS raised the chemical maker to buy from neutral.
Fluor (FLR) gained 1.69 to 185.90 as it tried to rally out of a recent pullback. Sales growth from the provider of engineering and construction services has accelerated in recent quarters.
On the downside, financials were again under fire, but were off session lows.
Lehman Bros. (LEH) slipped 0.36 to 30.25 in active trading. It fell as low as 27.83 just after the open. According to media reports, the investment bank looks to raise capital overseas, possibly in South Korea. Lehman has lost nearly 20% this week
Bank of America (BAC) fell 0.30 to 33.01 in fast trade. Merril Lynch cut its profit estimate on the belief that BofA's exposure to consumer and mortgages would hurt earnings until 2010. The broker now expects the bank to earn $2.25 a share this year and $3.05 a share in 2009.
Meanwhile, First Solar (FSLR) dropped 7.02 to 250.30 in brisk trade. That puts the maker of solar modules further south of its 50-day moving average.
Mosaic (MOS) reversed early gains and shed 2.20 to 128.50 in fast trade. The fertilizer maker turned tail after hitting an intraday high of 132.25.
Potash Corp. of Saskatchewan (POT) gave up 2.60 to 207.52, pulling back from Tuesday's 4% gain.
9:15 a.m. Update: Stocks Poised For Weaker Start
By VINCENT MAO
Stock futures signaled a lower open Wednesday despite better-than-expected economic data.
Nasdaq futures dropped 11 points vs. fair value, S&P 500 futures gave up 6 points and Dow futures lost 40 points.
In economic news, the ADP Employment Survey said private payrolls grew by 40,000 in May. That's much better than forecasts for a loss of 30,000 jobs. The ADP number is a harbinger to Friday's nonfarm payroll data, which is expected to show a loss of 60,000 jobs, both public and private.
First-quarter productivity rose 2.6%, up from a prior estimate of 2.2% and above forecasts for 2.5%.
The ISM services index for May will be out at 10 a.m. EDT. It's expected to slip to a reading of 51 from 52 in April. Still, readings above 50 signal expansion.
Crude oil inventories for the week ended May 31 will be out at 10:30 a.m. EDT. July crude rose 13 cents to $124.44 a barrel ahead of the report.
Hovnanian Enterprises (HOV) tumbled 8% in the pre-market on disappointing results. Late Tuesday, the home builder reported a fiscal Q2 loss of $3.42 a share vs. a loss of 49 cents a share in the year-ago quarter. That missed analysts' estimates and was the firm's seventh straight quarterly loss.
Trimble Navigation (TRMB) dropped 3% in the pre-market following a downgrade. JPMorgan cut the GPS device maker to neutral from overweight on valuation.
J.M. Smucker (SJM) said it would buy the Folger's coffee business from Procter & Gamble (PG) for about $3 billion. Smucker slipped 1% in the pre-market, while Procter and Gamble rose a fraction.
SAIC (SAI) rose 5% in the pre-open on a couple of contract announcements. The provider of scientific, engineering and technical services won a $454 million contract from the U.S. Army and a $17 million order from the General Services Administration.
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