AI
Tuesday, July 15, 2008 9:00:48 PM
Market Update 080715
http://biz.yahoo.com/mu/update.html
4:25 pm : Tuesday was an extremely busy and volatile session as market participants digested testimony from Fed Chairman Bernanke, several economic and earnings reports, and a plunge in crude oil prices.
In heavy trading, the stock market fell 2.2% shortly after the open, rallied to a 0.5% gain in an afternoon surge and then settled with a loss of 1.1% following a late-session sell off.
Financials were at the forefront of this session's decline and volatile action. The sector slumped to a 5.7% loss shortly after the opening bell on continued concerns regarding Fannie Mae (FNM 7.03, -2.70) and Freddie Mac (FRE 5.29, -1.82), a tepid response to US Bancorp's (USB 22.70, -0.63) earnings and an Oppenheimer downgrade of Wachovia (WB 9.11, -0.73).
A plunge in crude prices and Washington Mutual (WM 3.48, +0.25) defending its capital position sparked a midday turnaround in the financial sector -- and the broader stock market. The sector climbed to a gain of as much as 2.3%. However, late-day selling interest sent the sector back in the red, to settle the day with a loss of 3.0%.
There did not appear to be a specific cause for the tumble in crude prices, which occurred during Bernanke's testimony. Oil prices settled the day down 4.5% at $138.62 (prices fell as much as 6.4% after being up 1.1% early in the session). The stock market responded positively to the drop in crude prices, although some enthusiasm faded late in the session.
Four sectors ended the session with a gain. Health care led the way with a 1.3% advance, aided by positive earnings and outlook from Johnson & Johnson (JNJ 67.67, +1.26). The energy sector posted the largest decline of 4.2%, coming under selling pressure as crude prices sank.
With regard to Bernanke's testimony before the Senate Banking Committee, the Fed chairman mostly reiterated previous views that he or other Fed officials have already expressed. Bernanke noted significant risks to downside growth, and "intensified" inflation risks.
In turn, the Fed raised its 2008 inflation forecast. The Fed also raised its 2008 GDP growth outlook, noting better-than-expected economic data on consumer and business spending between the April and June FOMC meetings.
On the economic front, the June Producer Price Index (PPI) -- an inflation reading -- came in mixed. Total June PPI rose above expectations as higher energy and food prices drove up costs, while core PPI, which excludes food and energy prices, increased by a lower than expected amount.
On a monthly basis, total PPI rose 1.8% (consensus +1.4%) and core PPI increased 0.2% (consensus +0.3%). On a yearly basis total PPI is up 9.2%, while core PPI is up a tamer 3.0%. The CPI reading will be released Wednesday morning, and market participants will closely watch to see if increased prices are being passed on to consumers.
June retail sales were disappointing, falling short of expectations. However, the results do not alter our view that real GDP should increase by at least 2.5% in the second quarter. Specifically, retail sales rose 0.1% (consensus +0.4%), retail sales ex-autos rose 0.8% (consensus +0.9%). A larger portion of the ex-autos number is due to the 4.6% increase in gasoline sales on an adjusted basis. Excluding gas, retail sales were down 0.5% from the prior month. DJ30 -92.65 NASDAQ +2.84 NQ100 +0.02% R2K -0.3% SP400 -0.9% SP500 -13.39 NASDAQ Adv/Vol/Dec 1167/2.79 bln/1733 NYSE Adv/Vol/Dec 811/1.86 bln/2402
3:30 pm : A modest increase in broad-based selling interest sends the S&P 500 back in negative territory. The Nasdaq is still sporting a solid gain thanks to strength in Microsoft (MSFT 26.30, +1.16), Intel (INTC 20.99, +0.51) and Gilead Sciences (GILD 55.33, +1.78).
Tuesday has marked an extremely busy session, and market participants won't get much of a breather on Wednesday. The market will be digesting earnings from Intel, Abbott Laboratories (ABT 57.59, +1.37), Wells Fargo (WFC 21.69, +0.12). Other events include the release of CPI, net foreign purchases, capacity utilization, weekly crude inventories and FOMC meeting minutes.DJ30 -7.38 NASDAQ +17.23 SP500 -3.18 NASDAQ Adv/Vol/Dec 1453/2.33 bln/1430 NYSE Adv/Vol/Dec 1134/1.48 bln/2062
3:00 pm : The S&P 500 joins the Dow and Nasdaq in positive territory. Six of the ten economic sectors are now posting a gain.
Shares of wireless provider Sprint Nextel (S 9.55, +1.29) rebounded to a 16% gain from a 2% loss on speculation that the company is a takeover target. CNBC reported that its sources say SK Telecom (SKM 20.85, -0.24) is in talks to acquire Sprint. The deal is not imminent and would be joined by private equity, according to the report.
The telecom sector spiked to a 1.8% gain on the news.DJ30 +36.40 NASDAQ +29.08 SP500 +1.98 NASDAQ Adv/Vol/Dec 1406/2.04 bln/1458 NYSE Adv/Vol/Dec 1054/1.30 bln/2128
2:30 pm : The major indices are trading in a range-bound manner as the Nasdaq sports a solid gain, while the S&P and Dow trade near the unchanged mark. Financials (-0.1%) have slipped into the red, although the sector's decline is modest.
Despite the recent recovery, market breadth continues to lean negative. On the NYSE decliners outpace advancers by 15-to-7 and by 7-to-6 on the Nasdaq. Volume is on the heavy side.DJ30 +7.00 NASDAQ +19.50 SP500 -2.15 NASDAQ Adv/Vol/Dec 1331/1.88 bln/1561 NYSE Adv/Vol/Dec 997/1.19 bln/2142
2:00 pm : The Nasdaq continues to outperform, lifted by small-cap tech names. Meanwhile, the S&P 500 trades with a modest loss.
Kimberly-Clark (KMB 55.81, -2.99) is undeprforming with a 5.1% loss, although it has recovered from its session low when it was down 14.3%. The company reported preliminary second quaerter earnings that fell short of previous guidance and the company lowered its fiscal year 2008 outlook, citing higher input costs.DJ30 +11.97 NASDAQ +17.66 SP500 -2.01 NASDAQ Adv/Vol/Dec 1335/1.79 bln/1549 NYSE Adv/Vol/Dec 895/1.14 bln/2237
1:30 pm : The S&P 500 has fallen back into negative territory after making its way into positive ground. The increased selling pressure is also undermining the advance of the Dow Jones and the Nasdaq.
Microsoft (MSFT 26.09, +0.94) is lending support to the Dow and Nasdaq, acting as the primary leader. Yesterday the stock encountered stiff selling pressure as large-cap tech names fell out of favor.
Technology (+0.2%) has been one of the better performing sectors this session. Currently, it is only one of three still sporting a gain.DJ30 -13.11 NASDAQ +9.05 SP500 -5.06 NASDAQ Adv/Vol/Dec 1421/1.66 bln/1455 NYSE Adv/Vol/Dec 1122/1.06 bln/2008
1:00 pm : The stock market trades near its session high, just under yesterday's closing level. Five of the ten economic sectors are now in positive territory.
Treasury Secretary Paulson and SEC Chairman Cox are currently in a question-and-answer session with the Senate Banking Committee.
Struggling U.S. auto manufacturer General Motors (GM 9.92, +0.54) outlined its latest restructuring plan, giving its stock a nearly 6% boost. GM is taking several measures to bolster its liquidity by $15 billion through 2009. Some of the provision include further reduction of salaried employees and a suspension of dividends on GM's common stock, effective immediately.DJ30 +12.67 NASDAQ +17.00 SP500 -0.34 NASDAQ Adv/Vol/Dec 1164/1.33 bln/1656 NYSE Adv/Vol/Dec 776/851 mln/2345
12:35 pm : The major indices are trading at their best levels of the session. The Nasdaq is posting a decent-sized gain, the Dow is at the unchanged mark and the S&P 500 is posting only a slight loss.
Financials are leading the way with a gain of 1.7% after staging an impressive afternoon turnaround from a loss of 5.7%. Within the sector, 55 of the 89 components are posting a gain, led by State Street (STT 62.09, +6.39), Wells Fargo (WFC 22.52, +0.96) and Washington Mutual (WM 4.41, +0.91). Of note, the two companies at the center of the recent turmoil -- Fannie Mae (FNM 8.04, -1.69) and Freddie Mac (FRE 5.91, -1.14) -- are still posting substantial declines.DJ30 +3.50 NASDAQ +13.53 SP500 -2.27 NASDAQ Adv/Vol/Dec 1164/1.33 bln/1656 NYSE Adv/Vol/Dec 776/851 mln/2345
12:05 pm : Tuesday is shaping up to be an extremely busy -- and volatile -- session for Wall Street. The market is digesting several economic and earnings reports, testimony from Fed Chairman Bernanke, speculation regarding financials and a plummet in oil prices.
At midday, the S&P 500 is down 0.5%, well off its low when it was down 2.3%. Stocks pared their losses as crude prices fell and the financial sector recovered from a steep loss.
Fed Chairman Bernanke is currently testifying before Congress. He noted the significant downside risks to growth, while also expressing increased inflation risks. However, the Fed expects growth to pickup as the housing market bottoms and for inflation to tame as global growth slows.
Addressing spiking commodity prices, Bernanke said that the Fed believes the increases in crude oil prices (roughly 100% over the last year) are due to tight supply and increases in demand, not from speculation. Bernanke said that if it was speculation, one would expect to see an increase in inventory levels -- which is the opposite of what is actually occurring.
On that note, crude prices plummeted as much as 6.4% on no specific news item. Oil has since pared a portion its losses, but is still posting a substantial decline of 4.6% at $138.58 per barrel.
Financials are once again in focus. The sector traded down as much as 5.7% due to concerns regarding Fannie Mae (FNM 7.50, -2.23) and Freddie Mac (FRE 5.34, -1.77), disappointment over US Bancorp's (USB 23.38, +0.02) earnings and an Oppenheimer downgrade of Wachovia (WB 10.18, +0.34).
However, the sector has rebounded into postive territory at midday, sporting a 1.2% gain, aided by the drop in crude prices.
Seven of the ten economic sectors are posting a loss, and four are down more than 1%. The energy sector (-2.8%) is the main laggard, tumbling as crude prices fell.
The healthcare sector (+0.8%) has outperformed throughout the session, lifted by a better-than-expected earnings report from Johnson & Johnson (JNJ 67.55, +1.14).
On the economic front, the June Producer Price Index (PPI) -- an inflation reading -- came in mixed. Total June PPI rose above expectations as higher energy and food prices drove up costs, while core PPI, which excludes food and energy prices, increased by a lower than expected amount. On monthly basis, total PPI rose 1.8% (consensus +1.4%) and core PPI increased 0.2% (consensus +0.3%). On a yearly basis total PPI is up 9.2%, while core PPI is up a more tame 3.0%. The CPI reading will be released Wednesday morning, and market participants will look to see how much producers have passed on prices to consumers.
June retail sales were disappointing, falling short of expectations, although it does not alter our view that real GDP should increase by at least 2.5% in the second quarter. Specifically, retail sales rose 0.1% (consensus +0.4%), retail sales ex-autos rose 0.8% (consensus +0.9%). A larger portion of the ex-autos number is due to the 4.6% increase in gasoline sales on an adjusted basis. Excluding gas, retail sales were down 0.5% from the prior month. DJ30 -41.68 NASDAQ +1.20 SP500 -6.57 NASDAQ Adv/Vol/Dec 856/1.15 bln/1954 NYSE Adv/Vol/Dec 620/731 mln/2491
11:30 am : The major indices spike higher, but remain in the red, as crude prices fall 6.0% to $136.50 per barrel. There does not appear to be a specific news item for the quick and steep drop in oil.
The recent buying interest is broad-based, with the exception of energy (-3.6%), which is tumbling as crude prices fall. Tech (+0.1%), healthcare (+0.9%), consumer staples (+0.3%) and consumer discretionary (+0.1%) are now in positive territory. Financials are down 1.2%, a large improvement from previous levels.DJ30 -48.44 NASDAQ -3.23 SP500 -9.89 NASDAQ Adv/Vol/Dec 968/915 mln/1794 NYSE Adv/Vol/Dec 604/551 mln/2477
11:00 am : The S&P 500 trades with a steep loss of 1.5%, although this is a siginficant recovery from its worst level of the morning when it was down 2.3%. Still, sentiment is overwhelmingly bearish with decliners outpacing advancers by more than 12-to-1 on the NYSE.
Financials are down 3.0%, which is a substantial rebound from its session low of -5.7%. State Street (STT 58.71, +3.00) is the best-performing financial name this session, after reporting earnings that topped expectations and giving a solid outlook for the entire year.
Bernanke said the weakening dollar has contributed to the rise in crude prices. He said it is too difficult to assess how much of an impact it has, since the more imported oil we buy sends money overseas, which weakens the dollar. Bernanke feels the trade deficit is largely to blame for the dollar's decline.
This session, the dollar is down 0.7% against a basket of currencies. Crude oil is trading 2.4% lower to $142.65 per barrel.DJ30 -142.65 NASDAQ -24.84 SP500 -17.87 NASDAQ Adv/Vol/Dec 2125/515/528 NYSE Adv/Vol/Dec 232/400 mln/2870
10:35 am : The S&P 500 pares some losses after falling to a session low 2.3%. The decline is substantial. Unlike yesterday's drop, this session's weakness is not limited to financials (-4.2%). Retailers (-3.4%), industrials (-3.0%) and consumer discretionary (-2.3%) are all posting large declines.
Fed Chairman Bernanke is currently testifying before the Senate Banking Committee. He noted the significant downside risks to growth, while also expressing increased inflation risks. However, the Fed expects growth to pickup as the housing market bottoms and for inflation to tame as global growth slows.
Bernanke commented on the plan to prop up Freddie Mac (FRE 4.72, -2.37) and Fannie Mae (FNM 6.96, -2.80), saying that the size and importance of the GSEs justifies the actions.
Addressing spiking commodity prices, the Fed believes that the increases in crude oil prices (roughly 100% over the last year) are due to tight supply and increases in demand, not from speculation. Bernanke said that if it was speculation, one would expect to see an increase in inventory levels -- which is the opposite of what is actually occurring.
Expect Senate members to drill Bernanke on Freddie and Fannie as well as oil prices during the question and answer session.DJ30 -197.02 NASDAQ -36.15 SP500 -23.49 NASDAQ Adv/Vol/Dec 471/456 mln/2109 NYSE Adv/Vol/Dec 230/312 mln/2823
10:05 am : Stocks extend their losses in broad-based weakness that is led by financial stocks. Nine of the ten economic sectors are posting a loss, and seven of them are down more than 1%.
Financials are getting trampled, falling 5.2%, making the sector's two-day decline more than 10%. Fannie Mae (FNM 7.76, -1.97) and Freddie Mac (FRE 5.36, -1.75) just had their financial strength ratings cut at Moody's.
US Bancorp (USB 21.91, -1.42) reported a 12% drop in earnings that displeased investors. Meanwhile, Oppenheimer analyst Meredith Whitney downgraded Wachovia (WB 8.38, -1.45) to Underperform from Perform, fearing that Wachovia cannot cut costs fast enough to mitigate capital erosion.
Whitney's analysis is widely watched after she correctly predicted Citigroup's (C 14.42, -0.80) woes, including its dividend cut last fall.
The defensive oriented health care sector (+0.6%) is outperforming. Johnson & Johnson (JNJ 67.99, +1.28) is helping to lift health care stocks. The company reported a 12% increase in earnings per share and raised its full year outlook.
Fed Chairman Bernanke is preparing to testify before the Senate. His prepared speech has been released, noting the significant risks to growth.DJ30 -181.46 NASDAQ -37.28 SP500 -22.13 NASDAQ Adv/Vol/Dec 602/231 mln/1863 NYSE Adv/Vol/Dec 305/185 mln/2587
09:40 am : The major indices get off to a decidedly lower start to the trading day.
Once again the financial sector is in the limelight as market participants question the future prospects and current capital positions of financial institutions. The sector is down 3.1% after dropping 6.1% yesterday -- the largest one-day percent loss in eight years.
On the economic front, June PPI -- an inflation reading -- came in mixed. Total PPI rose above expectations as higher energy and food prices drove up costs, while core PPI, which excludes food and energy prices, increased by a lower than expected amount.
Separately, June retail sales rose 0.1%, but was short of the expected 0.4% increase.DJ30 -110.48 NASDAQ -20.33 SP500 -12.75
09:16 am : S&P futures vs fair value: -10.4. Nasdaq futures vs fair value: -14.0. Stock futures pare a good portion of their losses going into the open.
09:00 am : S&P futures vs fair value: -11.5. Nasdaq futures vs fair value: -12.5. Futures suggest a decidedly lower start, but have recovered from their worst levels.
As expected, General Motors (GM) announced steps it is taking to to bolster its liquidity and adapt its business to changing market conditions. GM expects that its plan will have a cumulative cash impact of $15 billion through 2009 by taking steps such as cutting its salaried workforce by 20% and suspending future dividends on common stock effective immediately. The struggling U.S. automaker will also raise cash through asset sales and financing activities.
Reported earlier this morning, US Bancorp (USB) earned $0.64 per share in the second quarter, excluding a $0.11 loss from "significant items". The results may not be comparable to the First Call consensus of $0.60 per share.
08:35 am : S&P futures vs fair value: -17.5. Nasdaq futures vs fair value: -22.8. Futures dip a few points on the release of a higher than expected total PPI reading and lower than expected retail sales.
June retail sales rose 0.1%, compared to the consensus estimate of a 0.4% gain. Excluding autos, retail sales rose 0.8%, which is also short of the consensus of 1.0%.
June PPI, an inflation measure, rose 1.8% month-over-month, which is hotter than the expected 1.4% increase. Core PPI -- which excludes food and energy -- increased 0.2% month-over-month, which is lower than the expected 0.3% advance.
Finally, the NY Empire manufacturing survey came in at -4.9 (conensus -8.0).
Fannie Mae (FNM) and Freddie Mac (FRE) are once again under selling pressure as both stocks fall more than 15% in premarket activity. European markets are sharply lower, with financial stocks taking a beating. The FTSE is down 2.5%, the CAC is down 2.0% and the DAX is down 2.6%.
08:00 am : S&P futures vs fair value: -13.9. Nasdaq futures vs fair value: -21.2. Futures indicate a sharply lower open as negative sentiment carries over from yesterday's session. It set to be a busy trading day, with several economic reports, testimony from Fed Chairman Ben Bernanke and a handful of earnings announcements.
Johnson & Johnson (JNJ) reported earnings of $1.18 per share, excluding items, which is $0.08 better than the consensus estimate. Genentech (DNA) reported second quarter earnings that fell short of estimates, but raised its fiscal year 2008 guidance.
Separately, General Motors (GM) is set to announce another restructuring plan later this morning, which is expected to include white collar job cuts.
The dollar is under pressure, falling 0.65% against a basket of world currencies. Meanwhile, crude oil prices are up 0.8% to $146.38 per barrel.
06:18 am : S&P futures vs fair value: -12.2. Nasdaq futures vs fair value: -20.5.
06:18 am : FTSE...5219.20...-81.20...-1.5%. DAX...6071.59...-128.66...-2.1%.
06:18 am : Nikkei...12754.56...-255.60...-2.0%. Hang Seng...21174.77...-839.69...-3.8%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
http://biz.yahoo.com/mu/update.html
4:25 pm : Tuesday was an extremely busy and volatile session as market participants digested testimony from Fed Chairman Bernanke, several economic and earnings reports, and a plunge in crude oil prices.
In heavy trading, the stock market fell 2.2% shortly after the open, rallied to a 0.5% gain in an afternoon surge and then settled with a loss of 1.1% following a late-session sell off.
Financials were at the forefront of this session's decline and volatile action. The sector slumped to a 5.7% loss shortly after the opening bell on continued concerns regarding Fannie Mae (FNM 7.03, -2.70) and Freddie Mac (FRE 5.29, -1.82), a tepid response to US Bancorp's (USB 22.70, -0.63) earnings and an Oppenheimer downgrade of Wachovia (WB 9.11, -0.73).
A plunge in crude prices and Washington Mutual (WM 3.48, +0.25) defending its capital position sparked a midday turnaround in the financial sector -- and the broader stock market. The sector climbed to a gain of as much as 2.3%. However, late-day selling interest sent the sector back in the red, to settle the day with a loss of 3.0%.
There did not appear to be a specific cause for the tumble in crude prices, which occurred during Bernanke's testimony. Oil prices settled the day down 4.5% at $138.62 (prices fell as much as 6.4% after being up 1.1% early in the session). The stock market responded positively to the drop in crude prices, although some enthusiasm faded late in the session.
Four sectors ended the session with a gain. Health care led the way with a 1.3% advance, aided by positive earnings and outlook from Johnson & Johnson (JNJ 67.67, +1.26). The energy sector posted the largest decline of 4.2%, coming under selling pressure as crude prices sank.
With regard to Bernanke's testimony before the Senate Banking Committee, the Fed chairman mostly reiterated previous views that he or other Fed officials have already expressed. Bernanke noted significant risks to downside growth, and "intensified" inflation risks.
In turn, the Fed raised its 2008 inflation forecast. The Fed also raised its 2008 GDP growth outlook, noting better-than-expected economic data on consumer and business spending between the April and June FOMC meetings.
On the economic front, the June Producer Price Index (PPI) -- an inflation reading -- came in mixed. Total June PPI rose above expectations as higher energy and food prices drove up costs, while core PPI, which excludes food and energy prices, increased by a lower than expected amount.
On a monthly basis, total PPI rose 1.8% (consensus +1.4%) and core PPI increased 0.2% (consensus +0.3%). On a yearly basis total PPI is up 9.2%, while core PPI is up a tamer 3.0%. The CPI reading will be released Wednesday morning, and market participants will closely watch to see if increased prices are being passed on to consumers.
June retail sales were disappointing, falling short of expectations. However, the results do not alter our view that real GDP should increase by at least 2.5% in the second quarter. Specifically, retail sales rose 0.1% (consensus +0.4%), retail sales ex-autos rose 0.8% (consensus +0.9%). A larger portion of the ex-autos number is due to the 4.6% increase in gasoline sales on an adjusted basis. Excluding gas, retail sales were down 0.5% from the prior month. DJ30 -92.65 NASDAQ +2.84 NQ100 +0.02% R2K -0.3% SP400 -0.9% SP500 -13.39 NASDAQ Adv/Vol/Dec 1167/2.79 bln/1733 NYSE Adv/Vol/Dec 811/1.86 bln/2402
3:30 pm : A modest increase in broad-based selling interest sends the S&P 500 back in negative territory. The Nasdaq is still sporting a solid gain thanks to strength in Microsoft (MSFT 26.30, +1.16), Intel (INTC 20.99, +0.51) and Gilead Sciences (GILD 55.33, +1.78).
Tuesday has marked an extremely busy session, and market participants won't get much of a breather on Wednesday. The market will be digesting earnings from Intel, Abbott Laboratories (ABT 57.59, +1.37), Wells Fargo (WFC 21.69, +0.12). Other events include the release of CPI, net foreign purchases, capacity utilization, weekly crude inventories and FOMC meeting minutes.DJ30 -7.38 NASDAQ +17.23 SP500 -3.18 NASDAQ Adv/Vol/Dec 1453/2.33 bln/1430 NYSE Adv/Vol/Dec 1134/1.48 bln/2062
3:00 pm : The S&P 500 joins the Dow and Nasdaq in positive territory. Six of the ten economic sectors are now posting a gain.
Shares of wireless provider Sprint Nextel (S 9.55, +1.29) rebounded to a 16% gain from a 2% loss on speculation that the company is a takeover target. CNBC reported that its sources say SK Telecom (SKM 20.85, -0.24) is in talks to acquire Sprint. The deal is not imminent and would be joined by private equity, according to the report.
The telecom sector spiked to a 1.8% gain on the news.DJ30 +36.40 NASDAQ +29.08 SP500 +1.98 NASDAQ Adv/Vol/Dec 1406/2.04 bln/1458 NYSE Adv/Vol/Dec 1054/1.30 bln/2128
2:30 pm : The major indices are trading in a range-bound manner as the Nasdaq sports a solid gain, while the S&P and Dow trade near the unchanged mark. Financials (-0.1%) have slipped into the red, although the sector's decline is modest.
Despite the recent recovery, market breadth continues to lean negative. On the NYSE decliners outpace advancers by 15-to-7 and by 7-to-6 on the Nasdaq. Volume is on the heavy side.DJ30 +7.00 NASDAQ +19.50 SP500 -2.15 NASDAQ Adv/Vol/Dec 1331/1.88 bln/1561 NYSE Adv/Vol/Dec 997/1.19 bln/2142
2:00 pm : The Nasdaq continues to outperform, lifted by small-cap tech names. Meanwhile, the S&P 500 trades with a modest loss.
Kimberly-Clark (KMB 55.81, -2.99) is undeprforming with a 5.1% loss, although it has recovered from its session low when it was down 14.3%. The company reported preliminary second quaerter earnings that fell short of previous guidance and the company lowered its fiscal year 2008 outlook, citing higher input costs.DJ30 +11.97 NASDAQ +17.66 SP500 -2.01 NASDAQ Adv/Vol/Dec 1335/1.79 bln/1549 NYSE Adv/Vol/Dec 895/1.14 bln/2237
1:30 pm : The S&P 500 has fallen back into negative territory after making its way into positive ground. The increased selling pressure is also undermining the advance of the Dow Jones and the Nasdaq.
Microsoft (MSFT 26.09, +0.94) is lending support to the Dow and Nasdaq, acting as the primary leader. Yesterday the stock encountered stiff selling pressure as large-cap tech names fell out of favor.
Technology (+0.2%) has been one of the better performing sectors this session. Currently, it is only one of three still sporting a gain.DJ30 -13.11 NASDAQ +9.05 SP500 -5.06 NASDAQ Adv/Vol/Dec 1421/1.66 bln/1455 NYSE Adv/Vol/Dec 1122/1.06 bln/2008
1:00 pm : The stock market trades near its session high, just under yesterday's closing level. Five of the ten economic sectors are now in positive territory.
Treasury Secretary Paulson and SEC Chairman Cox are currently in a question-and-answer session with the Senate Banking Committee.
Struggling U.S. auto manufacturer General Motors (GM 9.92, +0.54) outlined its latest restructuring plan, giving its stock a nearly 6% boost. GM is taking several measures to bolster its liquidity by $15 billion through 2009. Some of the provision include further reduction of salaried employees and a suspension of dividends on GM's common stock, effective immediately.DJ30 +12.67 NASDAQ +17.00 SP500 -0.34 NASDAQ Adv/Vol/Dec 1164/1.33 bln/1656 NYSE Adv/Vol/Dec 776/851 mln/2345
12:35 pm : The major indices are trading at their best levels of the session. The Nasdaq is posting a decent-sized gain, the Dow is at the unchanged mark and the S&P 500 is posting only a slight loss.
Financials are leading the way with a gain of 1.7% after staging an impressive afternoon turnaround from a loss of 5.7%. Within the sector, 55 of the 89 components are posting a gain, led by State Street (STT 62.09, +6.39), Wells Fargo (WFC 22.52, +0.96) and Washington Mutual (WM 4.41, +0.91). Of note, the two companies at the center of the recent turmoil -- Fannie Mae (FNM 8.04, -1.69) and Freddie Mac (FRE 5.91, -1.14) -- are still posting substantial declines.DJ30 +3.50 NASDAQ +13.53 SP500 -2.27 NASDAQ Adv/Vol/Dec 1164/1.33 bln/1656 NYSE Adv/Vol/Dec 776/851 mln/2345
12:05 pm : Tuesday is shaping up to be an extremely busy -- and volatile -- session for Wall Street. The market is digesting several economic and earnings reports, testimony from Fed Chairman Bernanke, speculation regarding financials and a plummet in oil prices.
At midday, the S&P 500 is down 0.5%, well off its low when it was down 2.3%. Stocks pared their losses as crude prices fell and the financial sector recovered from a steep loss.
Fed Chairman Bernanke is currently testifying before Congress. He noted the significant downside risks to growth, while also expressing increased inflation risks. However, the Fed expects growth to pickup as the housing market bottoms and for inflation to tame as global growth slows.
Addressing spiking commodity prices, Bernanke said that the Fed believes the increases in crude oil prices (roughly 100% over the last year) are due to tight supply and increases in demand, not from speculation. Bernanke said that if it was speculation, one would expect to see an increase in inventory levels -- which is the opposite of what is actually occurring.
On that note, crude prices plummeted as much as 6.4% on no specific news item. Oil has since pared a portion its losses, but is still posting a substantial decline of 4.6% at $138.58 per barrel.
Financials are once again in focus. The sector traded down as much as 5.7% due to concerns regarding Fannie Mae (FNM 7.50, -2.23) and Freddie Mac (FRE 5.34, -1.77), disappointment over US Bancorp's (USB 23.38, +0.02) earnings and an Oppenheimer downgrade of Wachovia (WB 10.18, +0.34).
However, the sector has rebounded into postive territory at midday, sporting a 1.2% gain, aided by the drop in crude prices.
Seven of the ten economic sectors are posting a loss, and four are down more than 1%. The energy sector (-2.8%) is the main laggard, tumbling as crude prices fell.
The healthcare sector (+0.8%) has outperformed throughout the session, lifted by a better-than-expected earnings report from Johnson & Johnson (JNJ 67.55, +1.14).
On the economic front, the June Producer Price Index (PPI) -- an inflation reading -- came in mixed. Total June PPI rose above expectations as higher energy and food prices drove up costs, while core PPI, which excludes food and energy prices, increased by a lower than expected amount. On monthly basis, total PPI rose 1.8% (consensus +1.4%) and core PPI increased 0.2% (consensus +0.3%). On a yearly basis total PPI is up 9.2%, while core PPI is up a more tame 3.0%. The CPI reading will be released Wednesday morning, and market participants will look to see how much producers have passed on prices to consumers.
June retail sales were disappointing, falling short of expectations, although it does not alter our view that real GDP should increase by at least 2.5% in the second quarter. Specifically, retail sales rose 0.1% (consensus +0.4%), retail sales ex-autos rose 0.8% (consensus +0.9%). A larger portion of the ex-autos number is due to the 4.6% increase in gasoline sales on an adjusted basis. Excluding gas, retail sales were down 0.5% from the prior month. DJ30 -41.68 NASDAQ +1.20 SP500 -6.57 NASDAQ Adv/Vol/Dec 856/1.15 bln/1954 NYSE Adv/Vol/Dec 620/731 mln/2491
11:30 am : The major indices spike higher, but remain in the red, as crude prices fall 6.0% to $136.50 per barrel. There does not appear to be a specific news item for the quick and steep drop in oil.
The recent buying interest is broad-based, with the exception of energy (-3.6%), which is tumbling as crude prices fall. Tech (+0.1%), healthcare (+0.9%), consumer staples (+0.3%) and consumer discretionary (+0.1%) are now in positive territory. Financials are down 1.2%, a large improvement from previous levels.DJ30 -48.44 NASDAQ -3.23 SP500 -9.89 NASDAQ Adv/Vol/Dec 968/915 mln/1794 NYSE Adv/Vol/Dec 604/551 mln/2477
11:00 am : The S&P 500 trades with a steep loss of 1.5%, although this is a siginficant recovery from its worst level of the morning when it was down 2.3%. Still, sentiment is overwhelmingly bearish with decliners outpacing advancers by more than 12-to-1 on the NYSE.
Financials are down 3.0%, which is a substantial rebound from its session low of -5.7%. State Street (STT 58.71, +3.00) is the best-performing financial name this session, after reporting earnings that topped expectations and giving a solid outlook for the entire year.
Bernanke said the weakening dollar has contributed to the rise in crude prices. He said it is too difficult to assess how much of an impact it has, since the more imported oil we buy sends money overseas, which weakens the dollar. Bernanke feels the trade deficit is largely to blame for the dollar's decline.
This session, the dollar is down 0.7% against a basket of currencies. Crude oil is trading 2.4% lower to $142.65 per barrel.DJ30 -142.65 NASDAQ -24.84 SP500 -17.87 NASDAQ Adv/Vol/Dec 2125/515/528 NYSE Adv/Vol/Dec 232/400 mln/2870
10:35 am : The S&P 500 pares some losses after falling to a session low 2.3%. The decline is substantial. Unlike yesterday's drop, this session's weakness is not limited to financials (-4.2%). Retailers (-3.4%), industrials (-3.0%) and consumer discretionary (-2.3%) are all posting large declines.
Fed Chairman Bernanke is currently testifying before the Senate Banking Committee. He noted the significant downside risks to growth, while also expressing increased inflation risks. However, the Fed expects growth to pickup as the housing market bottoms and for inflation to tame as global growth slows.
Bernanke commented on the plan to prop up Freddie Mac (FRE 4.72, -2.37) and Fannie Mae (FNM 6.96, -2.80), saying that the size and importance of the GSEs justifies the actions.
Addressing spiking commodity prices, the Fed believes that the increases in crude oil prices (roughly 100% over the last year) are due to tight supply and increases in demand, not from speculation. Bernanke said that if it was speculation, one would expect to see an increase in inventory levels -- which is the opposite of what is actually occurring.
Expect Senate members to drill Bernanke on Freddie and Fannie as well as oil prices during the question and answer session.DJ30 -197.02 NASDAQ -36.15 SP500 -23.49 NASDAQ Adv/Vol/Dec 471/456 mln/2109 NYSE Adv/Vol/Dec 230/312 mln/2823
10:05 am : Stocks extend their losses in broad-based weakness that is led by financial stocks. Nine of the ten economic sectors are posting a loss, and seven of them are down more than 1%.
Financials are getting trampled, falling 5.2%, making the sector's two-day decline more than 10%. Fannie Mae (FNM 7.76, -1.97) and Freddie Mac (FRE 5.36, -1.75) just had their financial strength ratings cut at Moody's.
US Bancorp (USB 21.91, -1.42) reported a 12% drop in earnings that displeased investors. Meanwhile, Oppenheimer analyst Meredith Whitney downgraded Wachovia (WB 8.38, -1.45) to Underperform from Perform, fearing that Wachovia cannot cut costs fast enough to mitigate capital erosion.
Whitney's analysis is widely watched after she correctly predicted Citigroup's (C 14.42, -0.80) woes, including its dividend cut last fall.
The defensive oriented health care sector (+0.6%) is outperforming. Johnson & Johnson (JNJ 67.99, +1.28) is helping to lift health care stocks. The company reported a 12% increase in earnings per share and raised its full year outlook.
Fed Chairman Bernanke is preparing to testify before the Senate. His prepared speech has been released, noting the significant risks to growth.DJ30 -181.46 NASDAQ -37.28 SP500 -22.13 NASDAQ Adv/Vol/Dec 602/231 mln/1863 NYSE Adv/Vol/Dec 305/185 mln/2587
09:40 am : The major indices get off to a decidedly lower start to the trading day.
Once again the financial sector is in the limelight as market participants question the future prospects and current capital positions of financial institutions. The sector is down 3.1% after dropping 6.1% yesterday -- the largest one-day percent loss in eight years.
On the economic front, June PPI -- an inflation reading -- came in mixed. Total PPI rose above expectations as higher energy and food prices drove up costs, while core PPI, which excludes food and energy prices, increased by a lower than expected amount.
Separately, June retail sales rose 0.1%, but was short of the expected 0.4% increase.DJ30 -110.48 NASDAQ -20.33 SP500 -12.75
09:16 am : S&P futures vs fair value: -10.4. Nasdaq futures vs fair value: -14.0. Stock futures pare a good portion of their losses going into the open.
09:00 am : S&P futures vs fair value: -11.5. Nasdaq futures vs fair value: -12.5. Futures suggest a decidedly lower start, but have recovered from their worst levels.
As expected, General Motors (GM) announced steps it is taking to to bolster its liquidity and adapt its business to changing market conditions. GM expects that its plan will have a cumulative cash impact of $15 billion through 2009 by taking steps such as cutting its salaried workforce by 20% and suspending future dividends on common stock effective immediately. The struggling U.S. automaker will also raise cash through asset sales and financing activities.
Reported earlier this morning, US Bancorp (USB) earned $0.64 per share in the second quarter, excluding a $0.11 loss from "significant items". The results may not be comparable to the First Call consensus of $0.60 per share.
08:35 am : S&P futures vs fair value: -17.5. Nasdaq futures vs fair value: -22.8. Futures dip a few points on the release of a higher than expected total PPI reading and lower than expected retail sales.
June retail sales rose 0.1%, compared to the consensus estimate of a 0.4% gain. Excluding autos, retail sales rose 0.8%, which is also short of the consensus of 1.0%.
June PPI, an inflation measure, rose 1.8% month-over-month, which is hotter than the expected 1.4% increase. Core PPI -- which excludes food and energy -- increased 0.2% month-over-month, which is lower than the expected 0.3% advance.
Finally, the NY Empire manufacturing survey came in at -4.9 (conensus -8.0).
Fannie Mae (FNM) and Freddie Mac (FRE) are once again under selling pressure as both stocks fall more than 15% in premarket activity. European markets are sharply lower, with financial stocks taking a beating. The FTSE is down 2.5%, the CAC is down 2.0% and the DAX is down 2.6%.
08:00 am : S&P futures vs fair value: -13.9. Nasdaq futures vs fair value: -21.2. Futures indicate a sharply lower open as negative sentiment carries over from yesterday's session. It set to be a busy trading day, with several economic reports, testimony from Fed Chairman Ben Bernanke and a handful of earnings announcements.
Johnson & Johnson (JNJ) reported earnings of $1.18 per share, excluding items, which is $0.08 better than the consensus estimate. Genentech (DNA) reported second quarter earnings that fell short of estimates, but raised its fiscal year 2008 guidance.
Separately, General Motors (GM) is set to announce another restructuring plan later this morning, which is expected to include white collar job cuts.
The dollar is under pressure, falling 0.65% against a basket of world currencies. Meanwhile, crude oil prices are up 0.8% to $146.38 per barrel.
06:18 am : S&P futures vs fair value: -12.2. Nasdaq futures vs fair value: -20.5.
06:18 am : FTSE...5219.20...-81.20...-1.5%. DAX...6071.59...-128.66...-2.1%.
06:18 am : Nikkei...12754.56...-255.60...-2.0%. Hang Seng...21174.77...-839.69...-3.8%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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