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Thursday, Aug. 22
http://biz.yahoo.com/mu/update.html
4:25 pm : Stocks finished the week on a strong note, but the lack of volume suggested there was little conviction behind the buying. Moreover, despite the strong finish, the major indices concluded the week with a loss.

The session's tone was upbeat from the start, following a report from Reuters that Korea Development Bank may be interested in acquiring Lehman Brothers (LEH 14.41, +0.69). That encouraged traders to enter the investment banking industry (+3.4%), which has been hit during recent sessions as various analysts have cut their earnings estimates.

Interest in the financial sector waned, though, when Moody's Investors Service downgraded the ratings on preferred shares of Fannie Mae (FNM 5.00, +0.15) and Freddie Mac (FRE 2.81, -0.35) to Baa3 from A1. Since those shares are held by many other financial institutions there is concern that a government-led bailout of the pair would result in major write-downs elsewhere.

Famed investor Warren Buffett stated in a CNBC interview that Fannie and Freddie are looking for private investment. Buffett also offered positive comments on the attractive values currently offered by stocks and said that he doesn't have any bets against the dollar, which climbed 0.8% after slipping in the previous session. Fed Chairman Bernanke stated in a separate speech that the trends in the dollar are likely to slow inflation.

Those comments helped participants look past the troubles of Fannie and Freddie, as well as word from Reuters that hedge fund Ore Hill is limiting redemptions. Financials posted the largest gain of any economic sector, climbing 3.1%.

Traders were also encouraged oil prices rolled over in the face of a strengthening dollar, profit-taking, and news shipments are flowing again through a previously closed Turkish pipeline. Crude climbed more than 5% yesterday, but reversed the advance to finish below $115 per barrel. Crude remains nearly 20% higher year-to-date.

The drop in oil prices fueled buying in airline stocks and oil sensitive areas like consumer discretionary stocks. The Amex Airline Index finished 8.2% higher and the consumer discretionary sector finished up 2.2%.

Gap (GPS 19.88, +0.87) also played a supporting role in the consumer discretionary sector. It announced better-than-expected earnings per share results and offered in-line guidance.

Although the session's gains were pleasing, there is actually less to them than meets the eye when taking into account the light volume that has accompanied the move. Total volume didn't even break 900,000 on the NYSE.

Each of the major indices closed the session with a gain in excess of 1%. For the week, though, the Dow closed 0.3% lower, the Nasdaq shed 1.5%, and the S&P 500 lost 0.5%.DJ30 +197.85 NASDAQ +34.33 NQ100 +1.3% R2K +1.7% SP400 +0.9% SP500 +14.48 NASDAQ Adv/Vol/Dec 1983/1.38 bln/797 NYSE Adv/Vol/Dec 2237/889 mln/874

3:30 pm : Stocks are holding strong gains while heading into the final leg of trading. However, at their current level stocks are facing a 0.7% decline for the week, as measured by the S&P 500.

The financial sector (+2.4%) and the tech sector (+1.4%) are combining to provide leadership. Their combined weight in the S&P 500 is more than double that of energy (-2.0%). Energy remains the primary laggard, as each of its industries components are showing losses.DJ30 +173.92 NASDAQ +30.51 SP500 +11.23 NASDAQ Adv/Vol/Dec 1868/1.11 bln/897 NYSE Adv/Vol/Dec 2134/645 mln/960

3:00 pm : The indices continue to sport solid gains, underpinned by strength in most sectors.

The energy sector (-2.1%) is the most notable laggard. It is off today as oil prices have rolled over in the face of a strengthening dollar and amid news shipments are flowing again through a previously closed Turkish pipeline.

Having touched $122.04 in Thursday's trade, crude futures have fallen $6.72, or 5.5%, to $114.43 today. According to CNBC, this marks the biggest, single day down move in dollar terms since 1991.

Not surprisingly, consumer discretionary and transportation sectors are near the top of today's leadership list.DJ30 +175.22 NASDAQ +32.26 SP500 +11.10 NASDAQ Adv/Vol/Dec 1888/991 mln/880 NYSE Adv/Vol/Dec 2115/560 mln/935

2:30 pm : The major indices continue to trade in a bullish manner as they hold near their best levels of the session.

Although the big gains will help anyone looking to take a profit today, there is actually less to them than meets the eye when taking into account the light volume that has accompanied the move.

With roughly 90 minutes left to go in the trading session, volume at the NYSE is still below 550 million shares. On a day where there is heavier-than-average volume, it is not unusual to see volume near, or in excess of, 1.0 billion shares by midday.

Within the Dow, all but two components -- Chevron (CVX 87.53, -0.99) and ExxonMobil (XOM 79.67, -0.68) -- are sporting a gain.DJ30 +187.35 NASDAQ +33.77 SP500 +12.48 NASDAQ Adv/Vol/Dec 1806/910 mln/952 NYSE Adv/Vol/Dec 2061/520 mln/983

2:00 pm : Stocks have stalled during their recent ascent and are now trading sideways. The session's overall tone, nonetheless, remains upbeat.

Optimism has given small-cap stocks a lift. The Russell 2000 is up 1.2% with more than 75% of its components trading higher. However, one of its primary laggards remains Pacific Sunwear (PSUN 5.77, -2.01), which issued a disappointing outlook.

Though healthy, gains are less impressive among mid-cap stocks. 75% of the stocks listed in the S&P 400 are also trading higher, but it is up 0.5%. Component Nordson Corp. (NDSN 54.38, -17.39) has been hit hard after the company reported earnings per share results for its latest quarter that failed to meet the consensus estimate. It is also lagging its index.DJ30 +182.22 NASDAQ +29.85 SP500 +11.79 NASDAQ Adv/Vol/Dec 1812/848 mln/885 NYSE Adv/Vol/Dec 2106/502 mln/950

1:30 pm : The stock market extends its upward trend, finding its best level since earlier this morning. However, it remains off its session high.

Week-to-date the S&P 500 is down 0.6%, but up 1.8% month-to-date.

Friday's strength is broad based with eight of the ten sectors trading higher. Six of the sectors are trading with gains in excess of 1%.DJ30 +184.26 NASDAQ +28.13 SP500 +11.83 NASDAQ Adv/Vol/Dec 1785/782 mln/877 NYSE Adv/Vol/Dec 2087/462 mln/941

1:00 pm : The major indices have carved out a trough by moving higher from their midday dip. Stocks remain off their session high, though.

In the latest merger and acquisition news, insurance outfit Aon Corp. (AOC 47.84, +1.14) will acquire Benfield Group for approximately $1.75 billion in cash and stock. Aon expects the addition to be accretive to earnings in the first year after the deal closes.

Shares of AOC have held up relatively well when compared with peers. Its stock is down just 2% year-to-date. Insurance giant AIG (AIG 19.83, +0.05) has shed 66% year-to-date, while Aflac (AFL +54.96, +0.47) has fallen 13% this year.DJ30 +151.36 NASDAQ +21.81 SP500 +8.75 NASDAQ Adv/Vol/Dec 1702/713 mln/941 NYSE Adv/Vol/Dec 1997/422 mln/1013

12:35 pm : The major indices have trended lower, though they remain well into positive ground. The Dow Jones Industrial Average continues to sport a gain in excess of 1%, outperforming its two counterparts.

Only one Dow component is trading lower: American International Group, otherwise AIG (AIG 19.59, -0.19). Strength is apparent in other large-cap financial names like JPMorgan Chase (JPM 37.52, +1.26) and American Express (AXP 37.96, +0.95).

Industrial names like United Technologies (UTX 65.48, +1.27) and Boeing (BA 64.97, +1.42) are also lending support. Boeing is considering withdrawing itself from the bidding process for the U.S. Air Force aerial refueling tankers, according to The Wall Street Journal. The article notes that Boeing may be trying to exercise some bargaining power in the deal.DJ30 +129.62 NASDAQ +16.93 SP500 +6.61 NASDAQ Adv/Vol/Dec 1614/652 mln/993 NYSE Adv/Vol/Dec 1897/386 mln/1085

12:05 pm : The major indices are faring well, but have pared some of their gains. At their highs, each index was up at least 1.2%. The financial sector helped fuel buying interest throughout morning trade, but it has more than halved its advance to trade with a 1.4% gain.

Interest in financials stemmed from a Reuters report that Korea Development Bank may have Lehman Brothers (LEH 15.10, +1.38) in its sight as a potential acquisition. Consideration that Lehman may become a buyout candidate has helped the investment banking group, which is up 2.5%.

However, the sentiment in the financial sector isn't entirely rosy. Moody's Investors Service downgraded the ratings on preferred shares of Fannie Mae (FNM 4.42, -0.43) and Freddie Mac (FRE 2.53, -0.63) to Baa3 from A1. Their Aa2 subordinated debt ratings were affirmed, but the outlook was changed to negative from stable.

Famed investor Warren Buffett stated in a CNBC interview the two enterprises are looking for private investment, but the scale needed is unlikely to come from the private sector. Troubles surrounding the financial health of Fannie and Freddie have caused widespread concern for their shares, as well as other financial stocks.

Gap (GPS 20.00, +0.99) is helping give retailers some positive attention after announcing better-than-expected quarterly earnings per share results and offering in-line guidance. Pacific Sunwear (PSUN 5.60, -2.18) and Aeropostale (ARO 33.30, -0.70) reported in-line earnings results. ARO issued an in-line outlook, but traders question whether expectations are getting too high after the company has benefited from consumers trading down. PSUN issued downside guidance and was downgraded by several firms.

Retailers, in general, are being helped by lower oil prices this session, since cheaper fuel frees up spending cash. Oil is indicated 2.4% lower following the previous session's 5% jump.

Crude is being hit by profit-taking and a stronger dollar. The U.S. dollar is helping depress prices of oil and other imported commodities, which are essential to the materials sector. The greenback is up 0.6% when compared with a basket of major foreign currencies.

Fed Chairman Bernanke stated the declines in commodity prices and the stability of the dollar are encouraging as their trends are likely to slow inflation. Inflation will be further helped as the U.S. economy falls short of its growth potential for a time. Still, the inflation outlook is highly uncertain. DJ30 +155.03 NASDAQ +22.00 SP500 +9.47 NASDAQ Adv/Vol/Dec 1705/583 mln/894 NYSE Adv/Vol/Dec 1972/347 mln/979

11:30 am : Stocks continue to trade with solid gains, but have come off their session highs. Still, the advance remains broad based.

Moody's Investors Service downgraded the ratings on preferred shares of Fannie Mae (FNM 4.52, -0.33) and Freddie Mac (FRE 2.70, -0.46) to Baa3 from A1. Their Bank Financial Strength ratings were lowered to D+ from B-. The two had their senior long-term debt and Prime-1 short-term debt ratings were affirmed with stable outlooks. Their Aa2 subordinated debt ratings were affirmed, but the outlook was changed to negative from stable.

The uncertainty of government sponsored enterprises' future has cast a shadow over market sentiment in recent weeks, given the implications of a possible government-led bailout. Taking the companies private would effectively wipe-out investments in the GSEs.DJ30 +169.19 NASDAQ +22.69 SP500 +10.79 NASDAQ Adv/Vol/Dec 1767/502 mln/802 NYSE Adv/Vol/Dec 2054/294 mln/848

11:00 am : Retailers are performing well. As a group they are up 1.8%. Gap (GPS 20.00, +0.99) is a standout among its peers. The company issued better-than-expected earnings per share results for its most recent quarter and offered in-line guidance. Given the challenges of the retail environment the outlook gave investors encouragement.

On the other hand, the much smaller Pacific Sunwear (PSUN 5.36, -2.42) reported in-line earnings results, but issued downside guidance. The stock was downgraded by several firms.

Fed Chairman Bernanke stated the declines in commodity prices and the stability of the dollar are encouraging as their trends are likely to slow inflation. Inflation will be further helped as the U.S. economy falls short of its growth potential for a time. Still, the inflation outlook is highly uncertain. Bernanke's comments came at the Fed's annual retreat in Jackson Hole, Wyo.

The dollar is up 0.6% this session, after slipping roughly 1.1% in the previous session. The CRB Commodity Index is down 1% this session, but remains up 12% year-to-date.DJ30 +184.09 NASDAQ +25.46 SP500 +12.05 NASDAQ Adv/Vol/Dec 1799/418 mln/726 NYSE Adv/Vol/Dec 2113/246 mln/780

10:30 am : All three of the major indices are trading more than 1% higher. Still, at their current levels each index is facing a week-to-date decline.

This week the Dow and the S&P 500 are down 0.5%, but the Nasdaq is down 1.8%.

Among the major economic sectors of the S&P 500, financials have shed the most this week, losing 3.1%. Energy has posted a 6.3% week-to-date gain, the largest among the other sectors. However, energy remains the only economic sector trading lower this session, down 0.6%, while financials are leading with a 3.0% advance.DJ30 +182.30 NASDAQ +28.78 SP500 +14.30 NASDAQ Adv/Vol/Dec 1792/305 mln/620 NYSE Adv/Vol/Dec 2161/187 mln/662

10:00 am : Stocks extend their early gains on broad-based strength. Only energy and materials are out of favor; they are down 1.2% and 0.6%, respectively.

Energy is being hit by a retreat in crude prices. Oil is indicated more than 2% lower as profit-takers cut into the previous session's 5% jump. Crude is currently trading below $119 per barrel.

The U.S. dollar is helping depress prices of oil and other imported commodities, which are essential to the materials sector. The greenback is up 0.6% when compared with a basket of major foreign currencies.DJ30 +122.46 NASDAQ +19.72 SP500 +10.05 NASDAQ Adv/Vol/Dec 1626/174 mln/612 NYSE Adv/Vol/Dec 2017/119 mln/693

09:45 am : Stocks start the session with solid gains. Eight of the ten economic sectors are trading higher.

Early-morning sentiment got a boost when Reuters reported that Korea Development Bank may be targeting Lehman Brothers (LEH 15.19, +1.47) as an acquisition target. Company executives are not commenting on the matter. Shares of LEH are up more than 10%, but continue to trade at less than half their book value.

Financials are the best performing sector in the early going. It is up 2.2%DJ30 +96.49 NASDAQ +17.35 SP500 +8.74 NASDAQ Adv/Vol/Dec 1465/103 mln/638 NYSE Adv/Vol/Dec 1872/77 mln/718

09:16 am : S&P futures vs fair value: +7.0. Nasdaq futures vs fair value: +7.5. Stocks are looking for an upward start just ahead of the session's opening bell. Lehman Brothers (LEH) continues to attract attention after word surfaced that it may be the target of an acquisition, but sources indicate the parties have not directly responded to the story.

09:00 am : S&P futures vs fair value: +7.5. Nasdaq futures vs fair value: +8.8. Early morning sentiment remains upbeat. Famed investor Warren Buffett stated in a CNBC interview that government supported mortgage lenders Fannie Mae (FNM) and Freddie Mac (FRE) are looking for private investment, but the scale needed is unlikely to come from the private sector. Shares of both outfits are trading higher in premarket activity. Oil has retreated in early action. Crude climbed more than 5% during the previous session, but is currently indicated roughly 1.5% lower.

08:30 am : S&P futures vs fair value: +6.6. Nasdaq futures vs fair value: +7.8. Futures continue to indicate a strong start to Friday's session. The Wall Street Journal reported Boeing (BA) is considering withdrawing from the U.S. Air Force aerial refueling tanker contract bidding unless given six months to submit a new bid.

08:00 am : S&P futures vs fair value: +7.7. Nasdaq futures vs fair value: +13.0. Stock futures are indicating an upward start for the week's final trading session. Sentiment was relatively neutral earlier, but spirits lifted when Korea Development Bank stated that Lehman Brothers (LEH) is an option for acquisition, according to Reuters. In earnings news, Gap (GPS) surpassed the consensus earnings per share estimate for its latest quarter, and issued an in-line outlook. Pacific Sunwear (PSUN) saw in-line earnings per share results, but issued downside guidance for the third and fourth quarter.

06:19 am : S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: +0.5.

06:19 am : FTSE...5423.60...+53.40...+1.0%. DAX...6272.77...+35.81...+0.6%.

06:19 am : Nikkei...12666.04...-86.17...-0.7%. Hang Seng...20392.06...-539.20...-2.6%.