Tuesday, October 14, 2008 8:06:12 PM
Market Update 081014
http://biz.yahoo.com/mu/update.html
4:15 pm : The stock market saw some swings on Tuesday, eventually settling with a modest loss, after the government's latest financial relief efforts were offset over fears that the broader economy will still face challenges. Some investors decided to take some money off the table following the previous session's massive gains, which added to the selling pressure.
The S&P 500 opened at its highs with a 4.1% gain, fell to a loss of 3.1% in the final hour of trade and then recovered to finish with a modest loss of 0.5%.
Eight of the ten economic sectors posted a gain. A strong 6.4% advance in financials, aided by the government's relief plan, helped offset weakness in tech (-3.9%), materials (-3.0%) and small-cap stocks (-2.9%). The weakness in tech caused the Nasdaq to underperform with a loss of 3.5%.
With regard to the governments efforts, the Treasury will buy up to $250 billion in preferred stock from qualifying U.S. financial institutions, with the funds and authority coming from the $700 billion plan authorized by Congress earlier this month. To participate in the program, financial institutions will have to agree to executive compensation limits, including the elimination of golden parachutes. Participation in the program is voluntary, although it appears that firms will be taking the Treasury up on its offer.
Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America (BAC 26.42, +3.63), Citigroup (C 18.70, +2.95), JPMorgan Chase (JPM 40.80, -1.19), Morgan Stanley (MS 21.96, +3.86) and Wells Fargo (WFC 33.25, +2.85).
In addition, the FDIC will guarantee the newly issued unsecured debt from banks through June 30, 2012. Meaning that if a bank fails, holders of newly issued debt will be paid by the FDIC. This includes interbank lending, which had seized up as banks hoarded cash. Separately, noninterest bearing deposit accounts will now be fully guaranteed, up from the current limit of $250,000, until the end of 2009.
The U.S. government's plans are similar to action taken in Europe yesterday.
Credit markets showed some signs of improvement, although they remain tight. Dollar Libor -- the rate that banks charge each for short-term loans -- fell across all terms. The Ted Spread fell 21 basis points to 4.36%. The TED spread measures the difference between what banks charge each other for three month loans (three month Libor) and what the Treasury pays (3-month T-bill).
Earnings were mixed. Johnson & Johnson (JNJ 64.97, +2.29) posted third quarter earnings growth that topped estimates and raised its full year outlook. Conversely, PepsiCo (PEP 53.90, -7.87) reported smaller-than-expected earnings per share growth, excluding nonrecurring items, gave a downside full-year earnings outlook and announced job cuts.
In commodity trading, oil prices came under selling pressure in conjunction with the pullback stocks, settling with a 2.3% loss at $79.35 per barrel after being up as much as 4.5%. Commodities as a whole fell 0.8%.
Treasury prices declined as the government's plan helped calm financial markets. The 10 year note fell 24 ticks, sending its yield above 4% for the first time since August.DJ30 -76.62 NASDAQ -65.24 NQ100 -4.5% R2K -2.8% SP400 -2.3% SP500 -5.34 NASDAQ Adv/Vol/Dec 908/2.74 bln/1751 NYSE Adv/Vol/Dec 1715/1.64 bln/1475
3:30 pm : The major indices recover from their recently reached session lows, but continue to post substantial declines. Strength in financials (+4.9%) is helping to limit the negative impact of tech (-4.2%) and materials (-3.8%).
Earnings will be in focus tomorrow, with Intel (INTC 15.87, -1.12) and Genentech (DNA 80.22, -0.96) reporting after the close today and Abbott Labs (ABT 53.96, -0.25), Coca-Cola (KO 43.76, -3.51), JPMorgan Chase (JPM 41.34, -0.65) and Wells Fargo (WFC 32.88, +2.48) reporting before the open. On the economic front, the producer price index, retail sales and business inventory reports are set for release. In addition, the Fed will release its collection of anecdotal economic information, the Beige Book.DJ30 -144.96 NASDAQ -71.19 SP500 -14.26 NASDAQ Adv/Vol/Dec 797/2.45 bln/1851 NYSE Adv/Vol/Dec 1554/1.46 bln/1638
2:55 pm : The major indices extend their declines in broad-based fashion as only the financial sector is holding a gain (+3.3%). The S&P 500 is now more than 2.5%.
Tech (-4.9%), utilities (-5.2%), materials (-4.9%), consumer staples (-5.1%) and consumer discretionary (-4.6%) are all under selling pressure.
Meanwhile, crude oil prices ( -3.5% to $78.31) drop further in conjunction with the stock market.DJ30 -246.07 NASDAQ -83.06 SP500 -25.85 NASDAQ Adv/Vol/Dec 776/2.17 bln/1868 NYSE Adv/Vol/Dec 1449/1.31 bln/1737
2:30 pm : Stocks momentarily fell to new session lows, but have since pared their losses. Still, the Dow is off by more than 140 points, which is a stark comparison to when it sported a gain of more than 400 points early in the session.
Despite the downturn, Dow components Bank of America (BAC 25.95, +3.16) and Citigroup (C 18.30, +2.55) continue to be a couple of the session's strongest performers. Both companies are expected to participate in the Treasury's plan to make up to $250 billion directly available to banks in the form of equity investments.DJ30 -144.40 NASDAQ -59.54 SP500 -14.16 NASDAQ Adv/Vol/Dec 945/1.99 bln/1683 NYSE Adv/Vol/Dec 1689/1.22 bln/1487
2:05 pm : The S&P 500 and Dow join the Nasdaq in negative territory. The S&P 500 has been up as much 4.1% and down as much as 1.1% this session.
Treasuries have seen some selling interest, with the 10-year note down 10 ticks, sending its yield just over 4%.
The monthly budget statement was delayed until 4:00 PM ET instead of its normal release time of 2:00 PM ET.DJ30 -49.46 NASDAQ -42.06 SP500 -2.38 NASDAQ Adv/Vol/Dec 1095/1.80 bln/1532 NYSE Adv/Vol/Dec 1846/1.11 bln/1320
1:25 pm : Stocks headed back toward the unchanged mark.
Within the S&P 500, 268 stocks are posting a loss. PepsiCo (PEP 55.63, -6.16) and Microsoft (MSFT 24.52, -0.98) are the main laggards. Bank of America (BAC 26.03, +3.24) and Citigroup (C 18.40, +2.65) are providing leadership.DJ30 +10.12 NASDAQ -32.58 SP500 +2.66 NASDAQ Adv/Vol/Dec 1183/1.65 bln/1429 NYSE Adv/Vol/Dec 1952/1.03 bln/1202
1:00 pm : The S&P 500 posts a gain of 0.7%.
Discover Financial Services (DFS 12.20, -1.60) settled an antitrust lawsuit with MasterCard (MA 179.70, +6.10) and Visa (V 58.75, -0.12), according to Reuters. The judge did not give the settlement details, although in 2004 Discover filed lawsuit seeking roughly $6 billion, according to the report.DJ30 +53.92 NASDAQ -23.91 SP500 +7.29 NASDAQ Adv/Vol/Dec 1263/1.54 bln/1323 NYSE Adv/Vol/Dec 2041/970 mln/1105
12:30 pm : The stock market posts a modest gain thanks to strength in financials (+5.9%) and telecom (+2.4%).
Market breadth on the NYSE is positive, with advancers outpacing decliners by 7-to-4. The Nasdaq has slightly negative breadth, with decliners outpacing advancers by 7-to-6.
Volume is on the heavy side, with 896 million shares already exchanging hands on the NYSE.DJ30 +55.52 NASDAQ -24.81 SP500 +6.38 NASDAQ Adv/Vol/Dec 1169/1.41 bln/1382 NYSE Adv/Vol/Dec 1994/896 mln/1152
12:00 pm : Stocks gave up an early rally as investors welcomed the U.S. government's move to shore up the financial system, but worried that the broader economy may still face headwinds.
At midday, the stock market is up 0.2% after retreating from a 4.1% opening surge. Stocks gave up gains due to weakness in retail (-2.1%) and tech (-1.5%) as some traders look to lock in gains after the S&P 500 surged 11.6% on Monday, marking its largest one-day percent gain since the 1930s.
The buying interest at the open came as credit markets showed signs of some improvement and the U.S. government followed European efforts to improve the financial system.
The Treasury will buy up to $250 billion in preferred stock from qualifying U.S. financial institutions. Participation in the plan is voluntary, although it appears that there will be plenty of firms taking the Treasury up on its offer. Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America (BAC 26.02, +3.23), Citigroup (C 18.44, +2.68), JPMorgan Chase (JPM 41.26, -0.69), Morgan Stanley (MS 21.85,. +3.75) and Wells Fargo (WFC 33.33, +2.93). To participate in the program, firms will have to agree to executive compensation limits, including the elimination of golden parachutes.
In addition, the FDIC will guarantee the newly issued unsecured debt from banks through June 30, 2012. Meaning that if a bank fails, holders of newly issued debt will be paid by the FDIC. This includes interbank lending, which has seized up as banks hoarded cash. Separately, noninterest bearing deposit accounts will now be fully guaranteed, up from the current limit of $250,000, until the end of 2009.
The financial sector is providing leadership with a 5.3% gain.
Earnings were mixed this morning. Johnson & Johnson (JNJ 64.85, +2.2) posted third quarter earnings growth that topped estimates and raised its full year outlook. Conversely, PepsiCo (PEP 55.73, -6.10) reported smaller-than-expected earnings per share growth, excluding nonrecurring items, gave a downside full-year earnings outlook and announced job cuts.
In commodity trading, oil prices were up as much as 4.4% as stocks rallied but has since retreated in conjunction with stocks to a loss of 0.5% at $80.77 per barrel.DJ30 +16.25 NASDAQ -33.15 SP500 +1.70 NASDAQ Adv/Vol/Dec 1229/1.31 bln/1306 NYSE Adv/Vol/Dec 1996/834 mln/1141
11:30 am : The S&P 500 and Dow post slight losses and then recover to modest gains in mostly broad-based buying interest.
European stocks saw some selling interest as the U.S. market fell from opening highs The bourses are up around 1.5% after being up more than 5% in earlier trade.DJ30 +52.89 NASDAQ -28.91 SP500 +5.05 NASDAQ Adv/Vol/Dec 1261/1.14 bln/1255 NYSE Adv/Vol/Dec 2084/744 mln/1033
11:00 am : The S&P 500 and Dow briefly join the Nasdaq in the red before recovering to the unchanged mark. The Nasdaq posts a substantial decline of roughly 2%.
The FDIC is not considering helping nonbanks, such as GMAC, as it is not the agency's role, according to FDIC Chairman Bair, Reuters reports.
Only thee sectors continue to post a gain -- financials (+3.8%), telecom (+1.3%), and healthcare (+1.0%).
Oil prices retreat in conjunction with stocks. Crude oil futures are down 0.7% to $80.64 per barrel after posting a gain of as much as 4.5%.DJ30 +32.90 NASDAQ -35.24 SP500 +0.91 NASDAQ Adv/Vol/Dec 1034/946 mln/1456 NYSE Adv/Vol/Dec 1909/628 mln/1203
10:30 am : The S&P 500 is up around 1% It was up 4.1% at its high. Seven of the ten sectors post a gain, led by financials (+6.1%).
Earnings news was mixed this morning. Johnson & Johnson (JNJ 65.00, +2.32) posted solid third quarter results, which reaffirms the healthcare giant's defensive investment qualities. The company posted a 10% year-over-year increase in earnings per share to $1.17 , topping the average analyst estimate by $0.06. The company, which has benefited from strong international sales, also raised its full year earnings outlook, expecting to earn at least $0.04 more than the average analyst estimate.
PepsiCo (PEP 56.88, -4.89) posted a 7% year-over-year increase in earnings per share to $1.06, excluding nonrecurring items, which missed estimates by $0.02. Profit margins were pressured due to increases in commodity and administrative costs. The company gave downside guidance for the full year that fell below the average estimate and will cut 3,300 jobs, or 1.8% of its workforce. Pepsi cited the economic situation and a strengthening dollar.DJ30 +164.79 NASDAQ -7.09 SP500 +16.53 NASDAQ Adv/Vol/Dec 1328/716 mln/1088 NYSE Adv/Vol/Dec 2234/503 mln/830
10:00 am : The S&P 500 and Dow give up half of their opening advance, but continue to post strong gains. The tech sector (-1.2%) is a playing a major role in the pullback.
Qualcomm (QCOM 41.32, -0.98), Google (GOOG 369.99, -11.03), Microsoft (MSFT 24.31, -1.19), Amazon.com (AMZN 57.18, -4.78 ) and eBay (EBAY 17.99, -0.11) have all slipped into the red after opening with solid gains. Other notable tech names are still in positive territory, but are well off their best levels.
There is not a clear catalyst for the weakness in large-cap tech.
As a result, the tech-heavy Nasdaq 100 is down 1.8% compared to the broader market's advance of 1.1%.
Similar to yesterday, but to a lesser extent, commodities (+1.6%) are on the rise as the dollar (-1.0%) comes under selling pressure. Crude oil futures are up 1.0% to $82.01 per barrel.DJ30 +123.79 NASDAQ -19.58 SP500 +11.88 NASDAQ Adv/Vol/Dec 1392/356 mln/892 NYSE Adv/Vol/Dec 2292/313 mln/683
09:35 am : The S&P 500 opens with strong gains just one day after surging 11.6% -- its largest percent advance since the 1930s. Buying interest is fueled by the government's plan to shore up the financial system.
The Treasury will buy up to $250 billion in preferred stock from U.S. financial institutions. Participation in the plan is voluntary, although it appears that there will be plenty of firms taking the Treasury up on its offer. Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America (BAC 26.62, +3.83), Citigroup (C 18.42, +2.68), JPMorgan Chase (JPM 43.25, +1.26), Morgan Stanley (MS 21.27, +3.17) and Wells Fargo (WFC 33.09, +2.68). To participate in the program, firms will have to agree to executive compensation limits, including the elimination of golden parachutes.
In addition, the FDIC will provide insurance for interbank lending and remove the $250,000 insurance limit on noninterest-bearing accounts.
European governments took similar actions yesterday.
The S&P 500 is now 24% above its multi-year intraday low reached last Friday.DJ30 +367.03 NASDAQ +40.40 SP500 +35.23
09:17 am : S&P futures vs fair value: +42.80. Nasdaq futures vs fair value: +38.80. Futures give up a portion of their gains, but a sharply higher start is still indicated. Nasdaq 100 futures were 58 points above fair value at session high, but are now up about 39 points.
09:00 am : S&P futures vs fair value: +46.00. Nasdaq futures vs fair value: +43.50. Stocks futures extend their gains and then dip from session highs as financial officials make their statements on the financial relief efforts. The Treasury confirmed that it plans to make up to $250 billion available in capital to U.S. financial institutions in the form of preferred stock in a voluntary program. A maximum of $25 billion will be available to each institution. Firms that participate must restrict executive compensations, including golden parachutes. In a joint statement from Treasury Secretary Paulson, Fed Chairman Bernanke and FDIC Chairman Bair said the "overwhelming majority of banks in the U.S. are strong and well-capitalized." The actions are being taking to increase confidence in the financial system and improve liquidity, the statement said.
08:30 am : S&P futures vs fair value: +47.60. Nasdaq futures vs fair value: +51.50. S&P 500 futures spike to session highs. Dollar Libor, which is the rate that banks charge to lend each other short term loans, declined across all terms, indicating an improved liquidity situation. Despite the decline, Libor remains at elevated levels. In overseas trading, Japan's Nikkei, which was closed Monday, surged 14.2% and Hong Kong's Hang Seng rose 3.2%. In Europe, London's FTSE is up 5.8%, Germany's Dax is up 5.5% and France's CAC is up 5.5%. In earnings news, grocery store operator Supervalu (SVU) reported fiscal second quarter earnings of $0.61 per share, which was $0.08 worse than Wall Street had forecast.
08:15 am :
08:05 am : S&P futures vs fair value: +37.00. Nasdaq futures vs fair value: +47.80. Stock futures rally as the U.S. lays out some details of the plan to restore confidence in the financial markets. President Bush currently speaking on the government's financial relief plan. More details will be given by Treasury Secretary Paulson, Fed Chairman Bernankne and FDIC Chairman Bair at 8:30 ET, the Wall Street Journal reports. According to reports, the U.S. will spend up to $250 billion of the $700 billion authorized by Congress to take equity stakes in banks. A total of $125 billion is expected to go to nine major companies, including Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), Morgan Stanley (MS) and Wells Fargo (WFC). In addition, the FDIC will provide insurance for interbank lending and remove the $250,000 insurance limit on noninterest-bearing account. In corporate news, Johnson & Johnson (JNJ) reported better-than-expected earnings, but PepsiCo (PEP) posted lower-than-expected earnings growth and gave downside earnings guidance. Banco Santander (STD), a Spanish bank, will acquire Sovereign Bancorp (SOV) for $1.9 billion, or $3.81 per share, in a stock-for-stock transaction. Santander already owned roughly 25% of Sovereign.
06:14 am : S&P futures vs fair value: +26.20. Nasdaq futures vs fair value: +36.50.
06:14 am : Nikkei...9447.57...+1171.10...+14.20%. Hang Seng...16832.88...+520.70...+3.20%.
06:14 am : FTSE...4475.45...+215.60...+5.10%. DAX...5307.49...+244.50...+4.80%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
http://biz.yahoo.com/mu/update.html
4:15 pm : The stock market saw some swings on Tuesday, eventually settling with a modest loss, after the government's latest financial relief efforts were offset over fears that the broader economy will still face challenges. Some investors decided to take some money off the table following the previous session's massive gains, which added to the selling pressure.
The S&P 500 opened at its highs with a 4.1% gain, fell to a loss of 3.1% in the final hour of trade and then recovered to finish with a modest loss of 0.5%.
Eight of the ten economic sectors posted a gain. A strong 6.4% advance in financials, aided by the government's relief plan, helped offset weakness in tech (-3.9%), materials (-3.0%) and small-cap stocks (-2.9%). The weakness in tech caused the Nasdaq to underperform with a loss of 3.5%.
With regard to the governments efforts, the Treasury will buy up to $250 billion in preferred stock from qualifying U.S. financial institutions, with the funds and authority coming from the $700 billion plan authorized by Congress earlier this month. To participate in the program, financial institutions will have to agree to executive compensation limits, including the elimination of golden parachutes. Participation in the program is voluntary, although it appears that firms will be taking the Treasury up on its offer.
Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America (BAC 26.42, +3.63), Citigroup (C 18.70, +2.95), JPMorgan Chase (JPM 40.80, -1.19), Morgan Stanley (MS 21.96, +3.86) and Wells Fargo (WFC 33.25, +2.85).
In addition, the FDIC will guarantee the newly issued unsecured debt from banks through June 30, 2012. Meaning that if a bank fails, holders of newly issued debt will be paid by the FDIC. This includes interbank lending, which had seized up as banks hoarded cash. Separately, noninterest bearing deposit accounts will now be fully guaranteed, up from the current limit of $250,000, until the end of 2009.
The U.S. government's plans are similar to action taken in Europe yesterday.
Credit markets showed some signs of improvement, although they remain tight. Dollar Libor -- the rate that banks charge each for short-term loans -- fell across all terms. The Ted Spread fell 21 basis points to 4.36%. The TED spread measures the difference between what banks charge each other for three month loans (three month Libor) and what the Treasury pays (3-month T-bill).
Earnings were mixed. Johnson & Johnson (JNJ 64.97, +2.29) posted third quarter earnings growth that topped estimates and raised its full year outlook. Conversely, PepsiCo (PEP 53.90, -7.87) reported smaller-than-expected earnings per share growth, excluding nonrecurring items, gave a downside full-year earnings outlook and announced job cuts.
In commodity trading, oil prices came under selling pressure in conjunction with the pullback stocks, settling with a 2.3% loss at $79.35 per barrel after being up as much as 4.5%. Commodities as a whole fell 0.8%.
Treasury prices declined as the government's plan helped calm financial markets. The 10 year note fell 24 ticks, sending its yield above 4% for the first time since August.DJ30 -76.62 NASDAQ -65.24 NQ100 -4.5% R2K -2.8% SP400 -2.3% SP500 -5.34 NASDAQ Adv/Vol/Dec 908/2.74 bln/1751 NYSE Adv/Vol/Dec 1715/1.64 bln/1475
3:30 pm : The major indices recover from their recently reached session lows, but continue to post substantial declines. Strength in financials (+4.9%) is helping to limit the negative impact of tech (-4.2%) and materials (-3.8%).
Earnings will be in focus tomorrow, with Intel (INTC 15.87, -1.12) and Genentech (DNA 80.22, -0.96) reporting after the close today and Abbott Labs (ABT 53.96, -0.25), Coca-Cola (KO 43.76, -3.51), JPMorgan Chase (JPM 41.34, -0.65) and Wells Fargo (WFC 32.88, +2.48) reporting before the open. On the economic front, the producer price index, retail sales and business inventory reports are set for release. In addition, the Fed will release its collection of anecdotal economic information, the Beige Book.DJ30 -144.96 NASDAQ -71.19 SP500 -14.26 NASDAQ Adv/Vol/Dec 797/2.45 bln/1851 NYSE Adv/Vol/Dec 1554/1.46 bln/1638
2:55 pm : The major indices extend their declines in broad-based fashion as only the financial sector is holding a gain (+3.3%). The S&P 500 is now more than 2.5%.
Tech (-4.9%), utilities (-5.2%), materials (-4.9%), consumer staples (-5.1%) and consumer discretionary (-4.6%) are all under selling pressure.
Meanwhile, crude oil prices ( -3.5% to $78.31) drop further in conjunction with the stock market.DJ30 -246.07 NASDAQ -83.06 SP500 -25.85 NASDAQ Adv/Vol/Dec 776/2.17 bln/1868 NYSE Adv/Vol/Dec 1449/1.31 bln/1737
2:30 pm : Stocks momentarily fell to new session lows, but have since pared their losses. Still, the Dow is off by more than 140 points, which is a stark comparison to when it sported a gain of more than 400 points early in the session.
Despite the downturn, Dow components Bank of America (BAC 25.95, +3.16) and Citigroup (C 18.30, +2.55) continue to be a couple of the session's strongest performers. Both companies are expected to participate in the Treasury's plan to make up to $250 billion directly available to banks in the form of equity investments.DJ30 -144.40 NASDAQ -59.54 SP500 -14.16 NASDAQ Adv/Vol/Dec 945/1.99 bln/1683 NYSE Adv/Vol/Dec 1689/1.22 bln/1487
2:05 pm : The S&P 500 and Dow join the Nasdaq in negative territory. The S&P 500 has been up as much 4.1% and down as much as 1.1% this session.
Treasuries have seen some selling interest, with the 10-year note down 10 ticks, sending its yield just over 4%.
The monthly budget statement was delayed until 4:00 PM ET instead of its normal release time of 2:00 PM ET.DJ30 -49.46 NASDAQ -42.06 SP500 -2.38 NASDAQ Adv/Vol/Dec 1095/1.80 bln/1532 NYSE Adv/Vol/Dec 1846/1.11 bln/1320
1:25 pm : Stocks headed back toward the unchanged mark.
Within the S&P 500, 268 stocks are posting a loss. PepsiCo (PEP 55.63, -6.16) and Microsoft (MSFT 24.52, -0.98) are the main laggards. Bank of America (BAC 26.03, +3.24) and Citigroup (C 18.40, +2.65) are providing leadership.DJ30 +10.12 NASDAQ -32.58 SP500 +2.66 NASDAQ Adv/Vol/Dec 1183/1.65 bln/1429 NYSE Adv/Vol/Dec 1952/1.03 bln/1202
1:00 pm : The S&P 500 posts a gain of 0.7%.
Discover Financial Services (DFS 12.20, -1.60) settled an antitrust lawsuit with MasterCard (MA 179.70, +6.10) and Visa (V 58.75, -0.12), according to Reuters. The judge did not give the settlement details, although in 2004 Discover filed lawsuit seeking roughly $6 billion, according to the report.DJ30 +53.92 NASDAQ -23.91 SP500 +7.29 NASDAQ Adv/Vol/Dec 1263/1.54 bln/1323 NYSE Adv/Vol/Dec 2041/970 mln/1105
12:30 pm : The stock market posts a modest gain thanks to strength in financials (+5.9%) and telecom (+2.4%).
Market breadth on the NYSE is positive, with advancers outpacing decliners by 7-to-4. The Nasdaq has slightly negative breadth, with decliners outpacing advancers by 7-to-6.
Volume is on the heavy side, with 896 million shares already exchanging hands on the NYSE.DJ30 +55.52 NASDAQ -24.81 SP500 +6.38 NASDAQ Adv/Vol/Dec 1169/1.41 bln/1382 NYSE Adv/Vol/Dec 1994/896 mln/1152
12:00 pm : Stocks gave up an early rally as investors welcomed the U.S. government's move to shore up the financial system, but worried that the broader economy may still face headwinds.
At midday, the stock market is up 0.2% after retreating from a 4.1% opening surge. Stocks gave up gains due to weakness in retail (-2.1%) and tech (-1.5%) as some traders look to lock in gains after the S&P 500 surged 11.6% on Monday, marking its largest one-day percent gain since the 1930s.
The buying interest at the open came as credit markets showed signs of some improvement and the U.S. government followed European efforts to improve the financial system.
The Treasury will buy up to $250 billion in preferred stock from qualifying U.S. financial institutions. Participation in the plan is voluntary, although it appears that there will be plenty of firms taking the Treasury up on its offer. Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America (BAC 26.02, +3.23), Citigroup (C 18.44, +2.68), JPMorgan Chase (JPM 41.26, -0.69), Morgan Stanley (MS 21.85,. +3.75) and Wells Fargo (WFC 33.33, +2.93). To participate in the program, firms will have to agree to executive compensation limits, including the elimination of golden parachutes.
In addition, the FDIC will guarantee the newly issued unsecured debt from banks through June 30, 2012. Meaning that if a bank fails, holders of newly issued debt will be paid by the FDIC. This includes interbank lending, which has seized up as banks hoarded cash. Separately, noninterest bearing deposit accounts will now be fully guaranteed, up from the current limit of $250,000, until the end of 2009.
The financial sector is providing leadership with a 5.3% gain.
Earnings were mixed this morning. Johnson & Johnson (JNJ 64.85, +2.2) posted third quarter earnings growth that topped estimates and raised its full year outlook. Conversely, PepsiCo (PEP 55.73, -6.10) reported smaller-than-expected earnings per share growth, excluding nonrecurring items, gave a downside full-year earnings outlook and announced job cuts.
In commodity trading, oil prices were up as much as 4.4% as stocks rallied but has since retreated in conjunction with stocks to a loss of 0.5% at $80.77 per barrel.DJ30 +16.25 NASDAQ -33.15 SP500 +1.70 NASDAQ Adv/Vol/Dec 1229/1.31 bln/1306 NYSE Adv/Vol/Dec 1996/834 mln/1141
11:30 am : The S&P 500 and Dow post slight losses and then recover to modest gains in mostly broad-based buying interest.
European stocks saw some selling interest as the U.S. market fell from opening highs The bourses are up around 1.5% after being up more than 5% in earlier trade.DJ30 +52.89 NASDAQ -28.91 SP500 +5.05 NASDAQ Adv/Vol/Dec 1261/1.14 bln/1255 NYSE Adv/Vol/Dec 2084/744 mln/1033
11:00 am : The S&P 500 and Dow briefly join the Nasdaq in the red before recovering to the unchanged mark. The Nasdaq posts a substantial decline of roughly 2%.
The FDIC is not considering helping nonbanks, such as GMAC, as it is not the agency's role, according to FDIC Chairman Bair, Reuters reports.
Only thee sectors continue to post a gain -- financials (+3.8%), telecom (+1.3%), and healthcare (+1.0%).
Oil prices retreat in conjunction with stocks. Crude oil futures are down 0.7% to $80.64 per barrel after posting a gain of as much as 4.5%.DJ30 +32.90 NASDAQ -35.24 SP500 +0.91 NASDAQ Adv/Vol/Dec 1034/946 mln/1456 NYSE Adv/Vol/Dec 1909/628 mln/1203
10:30 am : The S&P 500 is up around 1% It was up 4.1% at its high. Seven of the ten sectors post a gain, led by financials (+6.1%).
Earnings news was mixed this morning. Johnson & Johnson (JNJ 65.00, +2.32) posted solid third quarter results, which reaffirms the healthcare giant's defensive investment qualities. The company posted a 10% year-over-year increase in earnings per share to $1.17 , topping the average analyst estimate by $0.06. The company, which has benefited from strong international sales, also raised its full year earnings outlook, expecting to earn at least $0.04 more than the average analyst estimate.
PepsiCo (PEP 56.88, -4.89) posted a 7% year-over-year increase in earnings per share to $1.06, excluding nonrecurring items, which missed estimates by $0.02. Profit margins were pressured due to increases in commodity and administrative costs. The company gave downside guidance for the full year that fell below the average estimate and will cut 3,300 jobs, or 1.8% of its workforce. Pepsi cited the economic situation and a strengthening dollar.DJ30 +164.79 NASDAQ -7.09 SP500 +16.53 NASDAQ Adv/Vol/Dec 1328/716 mln/1088 NYSE Adv/Vol/Dec 2234/503 mln/830
10:00 am : The S&P 500 and Dow give up half of their opening advance, but continue to post strong gains. The tech sector (-1.2%) is a playing a major role in the pullback.
Qualcomm (QCOM 41.32, -0.98), Google (GOOG 369.99, -11.03), Microsoft (MSFT 24.31, -1.19), Amazon.com (AMZN 57.18, -4.78 ) and eBay (EBAY 17.99, -0.11) have all slipped into the red after opening with solid gains. Other notable tech names are still in positive territory, but are well off their best levels.
There is not a clear catalyst for the weakness in large-cap tech.
As a result, the tech-heavy Nasdaq 100 is down 1.8% compared to the broader market's advance of 1.1%.
Similar to yesterday, but to a lesser extent, commodities (+1.6%) are on the rise as the dollar (-1.0%) comes under selling pressure. Crude oil futures are up 1.0% to $82.01 per barrel.DJ30 +123.79 NASDAQ -19.58 SP500 +11.88 NASDAQ Adv/Vol/Dec 1392/356 mln/892 NYSE Adv/Vol/Dec 2292/313 mln/683
09:35 am : The S&P 500 opens with strong gains just one day after surging 11.6% -- its largest percent advance since the 1930s. Buying interest is fueled by the government's plan to shore up the financial system.
The Treasury will buy up to $250 billion in preferred stock from U.S. financial institutions. Participation in the plan is voluntary, although it appears that there will be plenty of firms taking the Treasury up on its offer. Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America (BAC 26.62, +3.83), Citigroup (C 18.42, +2.68), JPMorgan Chase (JPM 43.25, +1.26), Morgan Stanley (MS 21.27, +3.17) and Wells Fargo (WFC 33.09, +2.68). To participate in the program, firms will have to agree to executive compensation limits, including the elimination of golden parachutes.
In addition, the FDIC will provide insurance for interbank lending and remove the $250,000 insurance limit on noninterest-bearing accounts.
European governments took similar actions yesterday.
The S&P 500 is now 24% above its multi-year intraday low reached last Friday.DJ30 +367.03 NASDAQ +40.40 SP500 +35.23
09:17 am : S&P futures vs fair value: +42.80. Nasdaq futures vs fair value: +38.80. Futures give up a portion of their gains, but a sharply higher start is still indicated. Nasdaq 100 futures were 58 points above fair value at session high, but are now up about 39 points.
09:00 am : S&P futures vs fair value: +46.00. Nasdaq futures vs fair value: +43.50. Stocks futures extend their gains and then dip from session highs as financial officials make their statements on the financial relief efforts. The Treasury confirmed that it plans to make up to $250 billion available in capital to U.S. financial institutions in the form of preferred stock in a voluntary program. A maximum of $25 billion will be available to each institution. Firms that participate must restrict executive compensations, including golden parachutes. In a joint statement from Treasury Secretary Paulson, Fed Chairman Bernanke and FDIC Chairman Bair said the "overwhelming majority of banks in the U.S. are strong and well-capitalized." The actions are being taking to increase confidence in the financial system and improve liquidity, the statement said.
08:30 am : S&P futures vs fair value: +47.60. Nasdaq futures vs fair value: +51.50. S&P 500 futures spike to session highs. Dollar Libor, which is the rate that banks charge to lend each other short term loans, declined across all terms, indicating an improved liquidity situation. Despite the decline, Libor remains at elevated levels. In overseas trading, Japan's Nikkei, which was closed Monday, surged 14.2% and Hong Kong's Hang Seng rose 3.2%. In Europe, London's FTSE is up 5.8%, Germany's Dax is up 5.5% and France's CAC is up 5.5%. In earnings news, grocery store operator Supervalu (SVU) reported fiscal second quarter earnings of $0.61 per share, which was $0.08 worse than Wall Street had forecast.
08:15 am :
08:05 am : S&P futures vs fair value: +37.00. Nasdaq futures vs fair value: +47.80. Stock futures rally as the U.S. lays out some details of the plan to restore confidence in the financial markets. President Bush currently speaking on the government's financial relief plan. More details will be given by Treasury Secretary Paulson, Fed Chairman Bernankne and FDIC Chairman Bair at 8:30 ET, the Wall Street Journal reports. According to reports, the U.S. will spend up to $250 billion of the $700 billion authorized by Congress to take equity stakes in banks. A total of $125 billion is expected to go to nine major companies, including Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), Morgan Stanley (MS) and Wells Fargo (WFC). In addition, the FDIC will provide insurance for interbank lending and remove the $250,000 insurance limit on noninterest-bearing account. In corporate news, Johnson & Johnson (JNJ) reported better-than-expected earnings, but PepsiCo (PEP) posted lower-than-expected earnings growth and gave downside earnings guidance. Banco Santander (STD), a Spanish bank, will acquire Sovereign Bancorp (SOV) for $1.9 billion, or $3.81 per share, in a stock-for-stock transaction. Santander already owned roughly 25% of Sovereign.
06:14 am : S&P futures vs fair value: +26.20. Nasdaq futures vs fair value: +36.50.
06:14 am : Nikkei...9447.57...+1171.10...+14.20%. Hang Seng...16832.88...+520.70...+3.20%.
06:14 am : FTSE...4475.45...+215.60...+5.10%. DAX...5307.49...+244.50...+4.80%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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