AI
Friday, October 24, 2008 5:17:34 PM
Market Update 081024
http://biz.yahoo.com/mu/update.html
4:30 pm : Stocks may have closed with substantial losses Friday, but the extent of the downturn was far better than many initially feared.
Index futures were limit down ahead of the session's opening bell, which occurs when trading is halted in order to pace losses amid frantic selling efforts. That had participants spooked and anticipating a large scale sell-off.
Stocks fell to their session low early on. At that point, the Dow was down 5.8%, the S&P 500 was down 6.1%, and the Nasdaq fell 6.9% to a new five-year low. Choppy trading gave way to a late session rally that helped stocks finish off their lows.
The bleak mood in early trading stemmed from continued fear of a global recession as England's economy contracted by a worse-than-expected 0.5%. That prompted London's FTSE 100 to close with a 5.0% loss. Other major European markets also saw losses, but none matched the 9.6% drop in Japan and the 8.3% fall in China.
The argument that slower global growth will undercut demand for oil has crude prices down 56% from their July high. That prompted OPEC to schedule an emergency meeting in which it decided to cut daily production by 1.5 million barrels, effective immediately. Oil prices fell further, though. Crude futures were down 7.7% at one point, but ended around 4.5% lower at less than $65 per barrel. Oil last traded there in mid-2007.
A dour outlook from global tech company Microsoft (MSFT 21.96, -0.36) only reaffirmed the fear that earnings prospects are clouded by macro concerns. The company posted better-than-expected revenue and earnings per share results for its latest quarter, but guided profits below the consensus estimate for both the fourth quarter and fiscal 2009.
With economic concerns abounding, markets believe the FOMC is certain to cut the fed funds target rate. Currently, there is a 78% probability it will be taken to 1.00%, and a 22% it will be taken to 0.75%, down from the current 1.50%.
The move by the Fed would complement other government efforts to restore financial and credit markets. For instance, sources indicated the U.S. Treasury is looking to further extend the use of funds in its TARP emergency plan to begin helping regional banks and possibly even insurers. PNC Financial Services (PNC 58.88, +2.00) plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP program, which will help in its acquisition of National City (NCC 2.07, -0.68).
Lower interest rates would also aim to help restore the housing market by making loans more affordable. That would help the housing industry, which actually saw existing home sales increase 5.5% in September from the prior month to an annualized rate of 5.18 million units.
Despite the likelihood an interest rate cut and persistent volatility in major stock indices, the dollar continues to appreciate against foreign currencies. The dollar index, which measures the greenback's value against a basket of six major currencies, jumped 1.3% to a two-year high. DJ30 -312.30 NASDAQ -51.88 NQ100 -3.0% R2K -3.8% SP400 -2.9% SP500 -31.34 NASDAQ Adv/Vol/Dec 566/2.65 bln/1713 NYSE Adv/Vol/Dec 561/1.58 bln/2552
3:30 pm : Stocks have pared their losses as they enter the final leg of the session. Still, all ten of the major economic sectors remain in the red; they have traded with losses for the entire session.
Long-term Treasuries have fallen out of favor. The 30-year Bond is now off 32 ticks and the 10-year Note is down 13 ticks. Only the 2-year Bill is trading higher; it is up 2 ticks.
The frenetic action this session resulted in record volatility. The volatility index, often labeled the fear index, hit 89.DJ30 -161.45 NASDAQ -33.57 SP500 -17.26 NASDAQ Adv/Vol/Dec 625/2.20 bln/1628 NYSE Adv/Vol/Dec 572/1.18 bln/2534
3:00 pm : Stocks head into the final hour of trading with sizeable losses, but are currently rallying to their best level of the session.
Fear and uncertainty have influenced traders this session. Many are looking for some concerted efforts to get the major indices moving in the final hour of trading. Whether any such move proves a trustworthy indicator of the stock market's future direction will only be seen in time. Regardless of how the indices finish this session, broader challenges remain as many companies work to restore balance sheets and contend with stiff macro conditions.DJ30 -196.33 NASDAQ -33.38 SP500 -20.95 NASDAQ Adv/Vol/Dec 606/1.94 bln/1637 NYSE Adv/Vol/Dec 526/+1.06 bln/2574
2:30 pm : Action remains choppy late in the session. Losses remain deep and broad.
A headline is running on The Wall Street Journal Web site indicating the Treasury is considering taking stakes in insurance companies. Such a decision would expand the TARP rescue plan so that an even broader range of financial institutions have access to capital.
The performance of insurers has varied this session. Multiline insurers are down 4.4% this session, while life and health insurers are up 0.7%. Property and casualty insurers are down 3.2%.DJ30 -347.50 NASDAQ -59.29 SP500 -38.20 NASDAQ Adv/Vol/Dec 485/1.76 bln/1761 NYSE Adv/Vol/Dec 403/961 mln/2695
2:00 pm : Stocks have fallen to a fresh afternoon low. The Dow is 5.0% off its 52-week low and the S&P 500 is 2.9% off its 52-week low. Both hit their low points exactly two weeks ago.
The Nasdaq, on the other hand, hit a 52-week low earlier today. It is up 3.0% from that point.DJ30 -430.89 NASDAQ -66.35 SP500 -45.93 NASDAQ Adv/Vol/Dec 481/1.61 bln/1754 NYSE Adv/Vol/Dec 404/871 mln/2683
1:30 pm : Stocks recently made an upward spike, but the quick advance has since been erased. A negative bias continues to drive trading.
Washington Post has seemingly confirmed reports indicating that Treasury Secretary Paulson will begin initiating government stakes in regional banks. It stated that the Treasury plans to announce as early as this afternoon that as many as 22 regional banks have accepted capital injections from the government. Washington Post indicated that Capital One (COF 35.12, -0.59) and PNC Financial (PNC 58.55, +1.67) are on the list. So, too, are Regions Financial (RBF 9.48, -0.31) and KeyCorp (KEY 10.22, +0.15), according to the article.
Regional banks are down 2.0% as a group. Financials, as a complete economic sector, are down 4.5%.DJ30 -310.71 NASDAQ -43.86 SP500 -32.10 NASDAQ Adv/Vol/Dec 537/1.46 bln/1674 NYSE Adv/Vol/Dec 482/797 mln/2591
1:05 pm : After making their way higher midday, the major indices are on the backslide. Still, the major indices remain off their session lows.
Losses are relatively consistent across each economic sector. For the week, though, financials are the worst performers. The financial sector has shed 11.5% this week. It is also down nearly 53% year-to-date, more than any other sector.
The worst offenders within the financial sector have been thrift and mortgage players. While the industry group is down 3.7% this session, it is down 89% year-to-date.
Ironically, though, one of its components, Hudson City Bancorp (HCBK 16.41, -0.51) has held up well this year for its ability to avoid toxic subprime exposure. Its shares are up around 10% year-to-date.DJ30 -323.53 NASDAQ -46.66 SP500 -34.78 NASDAQ Adv/Vol/Dec 471/1.35 bln/1718 NYSE Adv/Vol/Dec 430/734 mln/2633
12:30 pm : The stock market continues to trade with a loss, but the extent of the session's downturn has been reduced.
Homebuilders are currently one of the best performing industry groups. The industry is currently up in excess of 5% as companies like Pulte Homes (PHM 8.84, +0.73) and DR Horton (DHI 5.44, +0.31) find favor following an upbeat existing home sales report.
Existing home sales for September increased 5.5% from the prior month to an annualized rate of 5.18 million units. In order for homebuilders to improve their prospects the glut of home inventories must first be cleared. Some investors are taking the increase in existing home sales as a sign that conditions in the housing market may be improving. Many pundits point to housing as the culprit leading to the current financial strain, but also as the source of remedy.DJ30 -346.63 NASDAQ -48.32 SP500 -37.16 NASDAQ Adv/Vol/Dec 472/1.23 bln/1703 NYSE Adv/Vol/Dec 431/669 mln/2621
12:05 pm : Things seemed as if they were about to turn from volatile to chaotic earlier this morning. A limit down was put in place to stop stock futures from making further declines ahead of the opening bell.
The Dow and S&P 500 quickly fell to their session lows, trading with losses of 5.8% and 6.1%, respectively. They resisted falling back to multiyear lows hit two weeks ago, though. The Nasdaq, on the other hand, plunged 6.9% to a new multiyear low.
The morning's heavy losses followed those in foreign markets. Asian markets saw the worst of it, declining 9.6% in Japan and 8.3% in China. Losses in Europe have been pared; France and Germany were down more than 8%, but are now down 3.9% and 5.4%, respectively. England's economy contracted during the third quarter and its primary index fell in excess of 8%, but is now down less than 6%.
Stocks the world over have been struggling as fears of a global recession take hold. That has pundits pricing in a 76% probability the FOMC will cut the fed funds target rate to 1.00% from 1.50% when it meets next week. Further interest rate cuts would complement the Fed's many efforts to stimulate the flow of capital in lending markets.
Despite the presumed cuts to interest rates, the dollar continues to appreciate against foreign currencies. The dollar index is up 0.7% Friday, and up 12% year-to-date. That is its best level in two years.
Despite the government's efforts and the relative attractiveness of the U.S., domestic companies remain cautious.
Microsoft (MSFT 22.45, +0.13) was the latest to issue a disappointing outlook. It guided profits below the consensus estimate for both the fourth quarter and fiscal 2009. Microsoft has resisted the selling pressure seen in the broader market, though, as investors acknowledge the company's better-than-expected revenue and earnings per share results.
Fortune Brands (FO 35.51, +0.66) and Burlington Northern Santa Fe (BNI 80.80, -0.78) also announced better-than-expected earnings per share results. Exelon (EXC 48.38, -1.50), however, missed the consensus forecast.
The latest episode of bank consolidation has PNC Financial Services (PNC 59.17, +2.29) acquiring National City (NCC 2.08, -0.67) for $2.23 per share, or an aggregate fixed amount of $5.2 billion in PNC stock. PNC plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP Capital Purchase Program.
Oil futures are down 4.4% to almost $65 per barrel after OPEC decided to cut daily crude production by 1.5 million barrels, effective immediately. The decision was made at an emergency meeting amid plunging oil prices. Oil has been more than halved from its midsummer high as fear of a slower global economy are leading to demand destruction.
OPEC stated the decision aims to keep supply in-line with demand, but many believe the cartel intends to put a floor under prices. However, the supply cut has failed to stop the selling pressure taking crude futures lower this session. DJ30 -286.49 NASDAQ -37.23 SP500 -30.53 NASDAQ Adv/Vol/Dec 481/1.15 bln/1677 NYSE Adv/Vol/Dec 458/618 mln/2572
11:30 am : Stocks continue to pare their losses, though declines remain broad based. The session's tone has been strikingly negative from the start.
The retreat by equities has won Treasuries some interest. Though off its earlier levels, the 10-year Note is up 6 ticks and yielding 3.65%. Recent volatility among stocks has taken Treasury yields to their lowest point in more than two weeks as investors pursue the relative safety of government debt. Treasury yields move inversely to their price.DJ30 -263.16 NASDAQ -38.97 SP500 -27.87 NASDAQ Adv/Vol/Dec 432/931 mln/1699 NYSE Adv/Vol/Dec 414/524 mln/2585
11:00 am : Losses remain deep and widespread. Every Dow component continues to trade in the red, but relative strength is being exhibited by Microsoft (MSFT 22.13, -0.19).
Microsoft announced after the prior session's close better-than-expected financial results, earning $0.48 per share on $15.1 billion in revenue during the latest quarter. The company did, however, issue downside guidance. Shares are down roughly 38% year-to-date, which is in-line with the Dow Jones Industrial Average. DJ30 -352.36 NASDAQ -57.06 SP500 -36.47 NASDAQ Adv/Vol/Dec 319/757 mln/1758 NYSE Adv/Vol/Dec 290/431 mln/2676
10:30 am : The major indices continue to show considerable losses. Action thus far has been choppy.
All 30 Dow components are trading lower, while 98% of the companies in the S&P 500 trade in the red. Decliners in the Nasdaq outnumber advancing issues by more than 7-to-1.
OPEC is cutting daily crude production by 1.5 million barrels, effective immediately. The decision was made at an emergency meeting amid plunging oil prices. Oil has been more than halved from its midsummer high as fear of a slower global economy are leading to demand destruction.
OPEC stated the decision aims to keep supply in-line with demand, but many believe the cartel intends to put a floor under prices. However, the supply cut has failed to stop the selling pressure taking crude futures lower this session. Crude futures remain roughly 5% lower, trading below $65 per barrel. At its session low, crude futures were down almost 7.7% to trade below $63 per barrel.DJ30 -418.71 NASDAQ -70.94 SP500 -45.86 NASDAQ Adv/Vol/Dec 265/584 mln/1744 NYSE Adv/Vol/Dec 187/337 mln/2735
10:00 am : Stocks are paring losses, but remain substantially lower. All ten of the economic sectors are down; each has lost in excess of 3%.
In a relatively isolated patch of green, airlines are up 2.5%, based on the Amex Airline Index. Airlines are being helped by a hefty 5% drop in oil prices. Oil futures currently trade below $65 per barrel.
Existing home sales for September came in at an annualized 5.18 million, exceeding the 4.95 million consensus estimate. Annualized September sales were up from the 4.91 million units registered in the prior month.DJ30 -313.10 NASDAQ -57.47 SP500 -36.56 NASDAQ Adv/Vol/Dec 299/351 mln/1613 NYSE Adv/Vol/Dec 185/221 mln/2662
09:45 am : The S&P 500 is down sharply, but remains off its 52-week low of 839.8, which was reached on October 10. The Dow is also off its 52-week low of 7882.5 reached the same date. The Nasdaq, however, has reached a new multi-year low.
PNC Financial Services (PNC 56.88) and National City (NCC 2.75) announced they have signed a definitive agreement for PNC to acquire NCC for $2.23 per share, or an aggregate fixed amount of $5.2 billion in PNC stock. PNC plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP Capital Purchase Program. Shares of NCC traded around $22 per share one year ago.
The decision by the two regional banks reflects continued consolidation in the banking industry. Many regional banks have struggled during recent months as their performance is often tied to regional economies and regional housing industries. To help them patch their losses, Treasury Secretary Paulson is preparing to take stakes in a number of regional banks, according to Bloomberg.com.DJ30 -436.15 NASDAQ -86.67 SP500 -52.84 NASDAQ Adv/Dec 174/1637 NYSE Adv/Dec 89/2270
09:15 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -75.50. Futures remain limit down, reflecting the negative bias that has overwhelmed premarket trading.
09:00 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -75.50. Dow and S&P futures are limit down. The FOMC is scheduled to meet next week and fed futures are currently pricing in a 64% probability the fed funds target rate will be cut to 1.00%, and a 36% probability that the target will be taken down to 0.75%. The current target rate is 1.50%.
08:30 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -75.50. Stock futures are limit down. Reuters has reported General Electric (GE) plans to use the Fed's commercial paper lending facility. The Wall Street Journal indicated AIG (AIG) has tapped the Fed for additional funds. According to the article, as of this last Wednesday AIG has borrowed $90.3 billion, which exceeds the original $85 billion rescue plan.
08:00 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -75.50. The tone in premarket action is decidedly negative. Dow and S&P futures are currently limit down, which is a mechanism to prevent stock futures from falling any further until the market opens. London's FTSE has shed more than 7% Friday, while France's CAC and Germany's DAX have dropped in excess of 8%. Hong Kong's Hang Seng is also down more than 8%, and Japan's Nikkei is down more than 9%. The dollar index is currently up nearly 1.4% to a two-year high, reflecting the greenback's appreciation against a basket of major currencies. Oil futures are currently down 7% to roughly $63 per barrel. In corporate news, Microsoft (MSFT) posted upbeat revenue and earnings per share results, but issued downsided guidance. Fortune Brands (FO) announced better-than-expected earnings per share results despite a drop in revenue.
06:28 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -66.30.
06:28 am : Nikkei...7649.08...-811.90...-9.60%. Hang Seng...12618.38...-1142.10...-8.30%.
06:28 am : FTSE...3795.44...-289.50...-7.10%. DAX...4123.36...-395.10...-8.70%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
http://biz.yahoo.com/mu/update.html
4:30 pm : Stocks may have closed with substantial losses Friday, but the extent of the downturn was far better than many initially feared.
Index futures were limit down ahead of the session's opening bell, which occurs when trading is halted in order to pace losses amid frantic selling efforts. That had participants spooked and anticipating a large scale sell-off.
Stocks fell to their session low early on. At that point, the Dow was down 5.8%, the S&P 500 was down 6.1%, and the Nasdaq fell 6.9% to a new five-year low. Choppy trading gave way to a late session rally that helped stocks finish off their lows.
The bleak mood in early trading stemmed from continued fear of a global recession as England's economy contracted by a worse-than-expected 0.5%. That prompted London's FTSE 100 to close with a 5.0% loss. Other major European markets also saw losses, but none matched the 9.6% drop in Japan and the 8.3% fall in China.
The argument that slower global growth will undercut demand for oil has crude prices down 56% from their July high. That prompted OPEC to schedule an emergency meeting in which it decided to cut daily production by 1.5 million barrels, effective immediately. Oil prices fell further, though. Crude futures were down 7.7% at one point, but ended around 4.5% lower at less than $65 per barrel. Oil last traded there in mid-2007.
A dour outlook from global tech company Microsoft (MSFT 21.96, -0.36) only reaffirmed the fear that earnings prospects are clouded by macro concerns. The company posted better-than-expected revenue and earnings per share results for its latest quarter, but guided profits below the consensus estimate for both the fourth quarter and fiscal 2009.
With economic concerns abounding, markets believe the FOMC is certain to cut the fed funds target rate. Currently, there is a 78% probability it will be taken to 1.00%, and a 22% it will be taken to 0.75%, down from the current 1.50%.
The move by the Fed would complement other government efforts to restore financial and credit markets. For instance, sources indicated the U.S. Treasury is looking to further extend the use of funds in its TARP emergency plan to begin helping regional banks and possibly even insurers. PNC Financial Services (PNC 58.88, +2.00) plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP program, which will help in its acquisition of National City (NCC 2.07, -0.68).
Lower interest rates would also aim to help restore the housing market by making loans more affordable. That would help the housing industry, which actually saw existing home sales increase 5.5% in September from the prior month to an annualized rate of 5.18 million units.
Despite the likelihood an interest rate cut and persistent volatility in major stock indices, the dollar continues to appreciate against foreign currencies. The dollar index, which measures the greenback's value against a basket of six major currencies, jumped 1.3% to a two-year high. DJ30 -312.30 NASDAQ -51.88 NQ100 -3.0% R2K -3.8% SP400 -2.9% SP500 -31.34 NASDAQ Adv/Vol/Dec 566/2.65 bln/1713 NYSE Adv/Vol/Dec 561/1.58 bln/2552
3:30 pm : Stocks have pared their losses as they enter the final leg of the session. Still, all ten of the major economic sectors remain in the red; they have traded with losses for the entire session.
Long-term Treasuries have fallen out of favor. The 30-year Bond is now off 32 ticks and the 10-year Note is down 13 ticks. Only the 2-year Bill is trading higher; it is up 2 ticks.
The frenetic action this session resulted in record volatility. The volatility index, often labeled the fear index, hit 89.DJ30 -161.45 NASDAQ -33.57 SP500 -17.26 NASDAQ Adv/Vol/Dec 625/2.20 bln/1628 NYSE Adv/Vol/Dec 572/1.18 bln/2534
3:00 pm : Stocks head into the final hour of trading with sizeable losses, but are currently rallying to their best level of the session.
Fear and uncertainty have influenced traders this session. Many are looking for some concerted efforts to get the major indices moving in the final hour of trading. Whether any such move proves a trustworthy indicator of the stock market's future direction will only be seen in time. Regardless of how the indices finish this session, broader challenges remain as many companies work to restore balance sheets and contend with stiff macro conditions.DJ30 -196.33 NASDAQ -33.38 SP500 -20.95 NASDAQ Adv/Vol/Dec 606/1.94 bln/1637 NYSE Adv/Vol/Dec 526/+1.06 bln/2574
2:30 pm : Action remains choppy late in the session. Losses remain deep and broad.
A headline is running on The Wall Street Journal Web site indicating the Treasury is considering taking stakes in insurance companies. Such a decision would expand the TARP rescue plan so that an even broader range of financial institutions have access to capital.
The performance of insurers has varied this session. Multiline insurers are down 4.4% this session, while life and health insurers are up 0.7%. Property and casualty insurers are down 3.2%.DJ30 -347.50 NASDAQ -59.29 SP500 -38.20 NASDAQ Adv/Vol/Dec 485/1.76 bln/1761 NYSE Adv/Vol/Dec 403/961 mln/2695
2:00 pm : Stocks have fallen to a fresh afternoon low. The Dow is 5.0% off its 52-week low and the S&P 500 is 2.9% off its 52-week low. Both hit their low points exactly two weeks ago.
The Nasdaq, on the other hand, hit a 52-week low earlier today. It is up 3.0% from that point.DJ30 -430.89 NASDAQ -66.35 SP500 -45.93 NASDAQ Adv/Vol/Dec 481/1.61 bln/1754 NYSE Adv/Vol/Dec 404/871 mln/2683
1:30 pm : Stocks recently made an upward spike, but the quick advance has since been erased. A negative bias continues to drive trading.
Washington Post has seemingly confirmed reports indicating that Treasury Secretary Paulson will begin initiating government stakes in regional banks. It stated that the Treasury plans to announce as early as this afternoon that as many as 22 regional banks have accepted capital injections from the government. Washington Post indicated that Capital One (COF 35.12, -0.59) and PNC Financial (PNC 58.55, +1.67) are on the list. So, too, are Regions Financial (RBF 9.48, -0.31) and KeyCorp (KEY 10.22, +0.15), according to the article.
Regional banks are down 2.0% as a group. Financials, as a complete economic sector, are down 4.5%.DJ30 -310.71 NASDAQ -43.86 SP500 -32.10 NASDAQ Adv/Vol/Dec 537/1.46 bln/1674 NYSE Adv/Vol/Dec 482/797 mln/2591
1:05 pm : After making their way higher midday, the major indices are on the backslide. Still, the major indices remain off their session lows.
Losses are relatively consistent across each economic sector. For the week, though, financials are the worst performers. The financial sector has shed 11.5% this week. It is also down nearly 53% year-to-date, more than any other sector.
The worst offenders within the financial sector have been thrift and mortgage players. While the industry group is down 3.7% this session, it is down 89% year-to-date.
Ironically, though, one of its components, Hudson City Bancorp (HCBK 16.41, -0.51) has held up well this year for its ability to avoid toxic subprime exposure. Its shares are up around 10% year-to-date.DJ30 -323.53 NASDAQ -46.66 SP500 -34.78 NASDAQ Adv/Vol/Dec 471/1.35 bln/1718 NYSE Adv/Vol/Dec 430/734 mln/2633
12:30 pm : The stock market continues to trade with a loss, but the extent of the session's downturn has been reduced.
Homebuilders are currently one of the best performing industry groups. The industry is currently up in excess of 5% as companies like Pulte Homes (PHM 8.84, +0.73) and DR Horton (DHI 5.44, +0.31) find favor following an upbeat existing home sales report.
Existing home sales for September increased 5.5% from the prior month to an annualized rate of 5.18 million units. In order for homebuilders to improve their prospects the glut of home inventories must first be cleared. Some investors are taking the increase in existing home sales as a sign that conditions in the housing market may be improving. Many pundits point to housing as the culprit leading to the current financial strain, but also as the source of remedy.DJ30 -346.63 NASDAQ -48.32 SP500 -37.16 NASDAQ Adv/Vol/Dec 472/1.23 bln/1703 NYSE Adv/Vol/Dec 431/669 mln/2621
12:05 pm : Things seemed as if they were about to turn from volatile to chaotic earlier this morning. A limit down was put in place to stop stock futures from making further declines ahead of the opening bell.
The Dow and S&P 500 quickly fell to their session lows, trading with losses of 5.8% and 6.1%, respectively. They resisted falling back to multiyear lows hit two weeks ago, though. The Nasdaq, on the other hand, plunged 6.9% to a new multiyear low.
The morning's heavy losses followed those in foreign markets. Asian markets saw the worst of it, declining 9.6% in Japan and 8.3% in China. Losses in Europe have been pared; France and Germany were down more than 8%, but are now down 3.9% and 5.4%, respectively. England's economy contracted during the third quarter and its primary index fell in excess of 8%, but is now down less than 6%.
Stocks the world over have been struggling as fears of a global recession take hold. That has pundits pricing in a 76% probability the FOMC will cut the fed funds target rate to 1.00% from 1.50% when it meets next week. Further interest rate cuts would complement the Fed's many efforts to stimulate the flow of capital in lending markets.
Despite the presumed cuts to interest rates, the dollar continues to appreciate against foreign currencies. The dollar index is up 0.7% Friday, and up 12% year-to-date. That is its best level in two years.
Despite the government's efforts and the relative attractiveness of the U.S., domestic companies remain cautious.
Microsoft (MSFT 22.45, +0.13) was the latest to issue a disappointing outlook. It guided profits below the consensus estimate for both the fourth quarter and fiscal 2009. Microsoft has resisted the selling pressure seen in the broader market, though, as investors acknowledge the company's better-than-expected revenue and earnings per share results.
Fortune Brands (FO 35.51, +0.66) and Burlington Northern Santa Fe (BNI 80.80, -0.78) also announced better-than-expected earnings per share results. Exelon (EXC 48.38, -1.50), however, missed the consensus forecast.
The latest episode of bank consolidation has PNC Financial Services (PNC 59.17, +2.29) acquiring National City (NCC 2.08, -0.67) for $2.23 per share, or an aggregate fixed amount of $5.2 billion in PNC stock. PNC plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP Capital Purchase Program.
Oil futures are down 4.4% to almost $65 per barrel after OPEC decided to cut daily crude production by 1.5 million barrels, effective immediately. The decision was made at an emergency meeting amid plunging oil prices. Oil has been more than halved from its midsummer high as fear of a slower global economy are leading to demand destruction.
OPEC stated the decision aims to keep supply in-line with demand, but many believe the cartel intends to put a floor under prices. However, the supply cut has failed to stop the selling pressure taking crude futures lower this session. DJ30 -286.49 NASDAQ -37.23 SP500 -30.53 NASDAQ Adv/Vol/Dec 481/1.15 bln/1677 NYSE Adv/Vol/Dec 458/618 mln/2572
11:30 am : Stocks continue to pare their losses, though declines remain broad based. The session's tone has been strikingly negative from the start.
The retreat by equities has won Treasuries some interest. Though off its earlier levels, the 10-year Note is up 6 ticks and yielding 3.65%. Recent volatility among stocks has taken Treasury yields to their lowest point in more than two weeks as investors pursue the relative safety of government debt. Treasury yields move inversely to their price.DJ30 -263.16 NASDAQ -38.97 SP500 -27.87 NASDAQ Adv/Vol/Dec 432/931 mln/1699 NYSE Adv/Vol/Dec 414/524 mln/2585
11:00 am : Losses remain deep and widespread. Every Dow component continues to trade in the red, but relative strength is being exhibited by Microsoft (MSFT 22.13, -0.19).
Microsoft announced after the prior session's close better-than-expected financial results, earning $0.48 per share on $15.1 billion in revenue during the latest quarter. The company did, however, issue downside guidance. Shares are down roughly 38% year-to-date, which is in-line with the Dow Jones Industrial Average. DJ30 -352.36 NASDAQ -57.06 SP500 -36.47 NASDAQ Adv/Vol/Dec 319/757 mln/1758 NYSE Adv/Vol/Dec 290/431 mln/2676
10:30 am : The major indices continue to show considerable losses. Action thus far has been choppy.
All 30 Dow components are trading lower, while 98% of the companies in the S&P 500 trade in the red. Decliners in the Nasdaq outnumber advancing issues by more than 7-to-1.
OPEC is cutting daily crude production by 1.5 million barrels, effective immediately. The decision was made at an emergency meeting amid plunging oil prices. Oil has been more than halved from its midsummer high as fear of a slower global economy are leading to demand destruction.
OPEC stated the decision aims to keep supply in-line with demand, but many believe the cartel intends to put a floor under prices. However, the supply cut has failed to stop the selling pressure taking crude futures lower this session. Crude futures remain roughly 5% lower, trading below $65 per barrel. At its session low, crude futures were down almost 7.7% to trade below $63 per barrel.DJ30 -418.71 NASDAQ -70.94 SP500 -45.86 NASDAQ Adv/Vol/Dec 265/584 mln/1744 NYSE Adv/Vol/Dec 187/337 mln/2735
10:00 am : Stocks are paring losses, but remain substantially lower. All ten of the economic sectors are down; each has lost in excess of 3%.
In a relatively isolated patch of green, airlines are up 2.5%, based on the Amex Airline Index. Airlines are being helped by a hefty 5% drop in oil prices. Oil futures currently trade below $65 per barrel.
Existing home sales for September came in at an annualized 5.18 million, exceeding the 4.95 million consensus estimate. Annualized September sales were up from the 4.91 million units registered in the prior month.DJ30 -313.10 NASDAQ -57.47 SP500 -36.56 NASDAQ Adv/Vol/Dec 299/351 mln/1613 NYSE Adv/Vol/Dec 185/221 mln/2662
09:45 am : The S&P 500 is down sharply, but remains off its 52-week low of 839.8, which was reached on October 10. The Dow is also off its 52-week low of 7882.5 reached the same date. The Nasdaq, however, has reached a new multi-year low.
PNC Financial Services (PNC 56.88) and National City (NCC 2.75) announced they have signed a definitive agreement for PNC to acquire NCC for $2.23 per share, or an aggregate fixed amount of $5.2 billion in PNC stock. PNC plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP Capital Purchase Program. Shares of NCC traded around $22 per share one year ago.
The decision by the two regional banks reflects continued consolidation in the banking industry. Many regional banks have struggled during recent months as their performance is often tied to regional economies and regional housing industries. To help them patch their losses, Treasury Secretary Paulson is preparing to take stakes in a number of regional banks, according to Bloomberg.com.DJ30 -436.15 NASDAQ -86.67 SP500 -52.84 NASDAQ Adv/Dec 174/1637 NYSE Adv/Dec 89/2270
09:15 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -75.50. Futures remain limit down, reflecting the negative bias that has overwhelmed premarket trading.
09:00 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -75.50. Dow and S&P futures are limit down. The FOMC is scheduled to meet next week and fed futures are currently pricing in a 64% probability the fed funds target rate will be cut to 1.00%, and a 36% probability that the target will be taken down to 0.75%. The current target rate is 1.50%.
08:30 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -75.50. Stock futures are limit down. Reuters has reported General Electric (GE) plans to use the Fed's commercial paper lending facility. The Wall Street Journal indicated AIG (AIG) has tapped the Fed for additional funds. According to the article, as of this last Wednesday AIG has borrowed $90.3 billion, which exceeds the original $85 billion rescue plan.
08:00 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -75.50. The tone in premarket action is decidedly negative. Dow and S&P futures are currently limit down, which is a mechanism to prevent stock futures from falling any further until the market opens. London's FTSE has shed more than 7% Friday, while France's CAC and Germany's DAX have dropped in excess of 8%. Hong Kong's Hang Seng is also down more than 8%, and Japan's Nikkei is down more than 9%. The dollar index is currently up nearly 1.4% to a two-year high, reflecting the greenback's appreciation against a basket of major currencies. Oil futures are currently down 7% to roughly $63 per barrel. In corporate news, Microsoft (MSFT) posted upbeat revenue and earnings per share results, but issued downsided guidance. Fortune Brands (FO) announced better-than-expected earnings per share results despite a drop in revenue.
06:28 am : S&P futures vs fair value: -52.80. Nasdaq futures vs fair value: -66.30.
06:28 am : Nikkei...7649.08...-811.90...-9.60%. Hang Seng...12618.38...-1142.10...-8.30%.
06:28 am : FTSE...3795.44...-289.50...-7.10%. DAX...4123.36...-395.10...-8.70%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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