AI
Thursday, October 30, 2008 6:57:48 PM
Market Update 081030
http://biz.yahoo.com/mu/update.html
4:25 pm : The stock market's swings continued Thursday. After jumping out to a strong gain, the major indices drifted to the unchanged mark before chopping back to higher ground. Gains came under pressure late in the session, but a last minute rally helped the major indices finish with strong gains.
Stocks were up more than 3% early on as investors assessed better-than-feared economic data and central bank moves to loosen capital markets.
Central banks in Asia trimmed target interest rates the day after the FOMC made cuts of its own. The Fed has also opened dollar swap lines with the likes of Mexico, South Korea, and Brazil. The moves come as central banks continue to fight systemic weakness in credit and capital markets. Such weakness has undermined economic prospects and led many to fear a global recession.
The advance third quarter GDP reading indicated the U.S. economy declined at an annualized rate of 0.3%, which is not as bad as the 0.5% decline that was widely expected. There is potential the GDP data may be revised upward, considering September net exports data was estimated.
Consumer spending remains a concern for economic growth, though, since it has historically accounts for more than two-thirds of economic activity. Consumer spending declined at a 3.1% annual rate and caused a drop of -2.25% in the latest GDP reading.
Prospects for consumer spending remain dim as jobless claims remain elevated. Initial claims for the week ending Oct. 25 were unchanged week-over-week at 479,000. Though that was slightly worse than the consensus estimate of 475,000, the four-week moving average improved to 475,500 from 480,500. Still, the data point to a 10th consecutive month of nonfarm payroll declines.
The jobless data coincide with continued reports of layoffs from major corporations. American Express (AXP 26.06, +0.85) is the latest to make cuts to its workforce, eliminating 7,000 jobs. The decision comes as part of a plan to cut operating costs.
Elsewhere in corporate news, major oil company and Dow component Exxon Mobil (XOM 75.05, +0.40) posted its fourth straight record quarterly profit. However, with crude prices down 55% from record highs, the outlook for major oil companies looks less lucrative. Crude finished the session roughly $1.40 lower at $66.10 per barrel.
Also joining the earnings parade were Colgate-Palmolive (CL 64.23, +4.23), Waste Management (WMI 31.44, +1.84), and Dominion (D 36.27, +1.06). Each posted better-than-expected earnings per share results.
Though ending the session higher, financial companies (+1.3%) continue to lag. The Treasury confirmed its $125 billion investment in nine major banks, including Goldman Sachs (GS 91.11, -6.55), Morgan Stanley (MS 16.09, +1.33), and JPMorgan (JPM 37.62, +1.91), to name a few. Their shares finished in mixed fashion as investors assessed word that Merrill Lynch (MER 17.78, +0.23) lowered earnings estimates on Goldman and Morgan Stanley, but raised them for JPMorgan.
Stocks came under pressure late in the session when San Francisco Fed President Yellen stated recent the economy is likely to contract significantly in the fourth quarter. The impact of the comments didn't last too long as buying interest quickly resumed to help the major indices finish near afternoon highs.DJ30 +189.73 NASDAQ +41.31 NQ100 +2.4% R2K +4.8% SP400 +4.2% SP500 +24.00 NASDAQ Adv/Vol/Dec 2076/2.54 bln/669 NYSE Adv/Vol/Dec 2510/1.38 bln/574
3:30 pm : Stocks fell precipitously after reaching afternoon highs. The major indices are currently on the rebound, though.
San Francisco Fed President Yellen stated in a speech that recent economic data is deeply worrisome and the economy is likely to contract significantly in the fourth quarter. Yellen also stated the impact of credit conditions has outpaced the Fed's moves to lower rates.
Despite such concerns, stocks continue to show strength. Broad-based gains remain as only the telecom sector (-0.2%) trades in the red.
The interest in equities has kept pressure on Treasuries for the entire session. The 10-year Note is near its worst level of the session, currently down 23 ticks.DJ30 +138.03 NASDAQ +33.10 SP500 +17.46 NASDAQ Adv/Vol/Dec 1940/2.06 bln/767 NYSE Adv/Vol/Dec 2372/987 mln/696
3:00 pm : Trading remains choppy. The major indices have been unable to put together a sustainable afternoon rebound that will take them back to early session highs.
Though trading with a healthy gain, the financial sector continues to lag the broader market. Financials are currently up 1.0%, but were up 3.5% at their best level of the session.
AIG (AIG 1.65, +0.10) disclosed it has applied for participation in the Federal Reserve's commercial paper funding facility. According to sources, the company has already drawn down more than $85 billion in loans from the Fed, more than it initially planned. AIG shares are down more than 95% year-to-date.DJ30 +150.06 NASDAQ +37.18 SP500 +18.52 NASDAQ Adv/Vol/Dec 1961/1.82 bln/727 NYSE Adv/Vol/Dec 2421/883 mln/640
2:30 pm : The stock market has advanced to its best level of the afternoon, though it is still well short of the 3.6% advance it was touting early on. There is no clear catalyst behind the move, but the advance is broad based.
Small-cap stocks are showing some of the best gains. The Russell 2000 is currently up 3.2%. DJ30 +186.30 NASDAQ +40.28 SP500 +22.31 NASDAQ Adv/Vol/Dec 1919/1.65 bln/737 NYSE Adv/Vol/Dec 2390/804 mln/644
2:00 pm : The major indices continue to chop along. Gains remain impressive, but the Dow, Nasdaq, and S&P 500 are off their session highs. Each index traded more than 3% higher in the early going.
Crude prices continue to trade lower. Crude futures are now down 3.7% to $65 per barrel. Their prices are down more than 30% year-to-date.
Despite the downturn in oil prices, energy stocks are trading up 1.7%, which is slightly ahead of the broader market. Oil and gas refiners (+6.5%) are among the energy sector's best performers.DJ30 +120.11 NASDAQ +26.93 SP500 +14.36 NASDAQ Adv/Vol/Dec 1794/1.50 bln/846 NYSE Adv/Vol/Dec 2300/733 mln/722
1:30 pm : Stocks continue to extend their turnaround after briefly falling into the red. The major indices are currently off their afternoon highs, though.
The defensive-orientated utilities sector is outperforming the other sectors. It is currently up 2.5%, helped by an upbeat announcement from utility holding company Dominion (D 36.01, +0.80). Shares of the traditionally defensive holding haven't been entirely resistent to broad market mayhem; they are down 25% year-to-date. However, that is still better than the 35% dive taken by the S&P 500 this year.DJ30 +92.79 NASDAQ +21.65 SP500 +12.05 NASDAQ Adv/Vol/Dec 1752/1.40 bln/867 NYSE Adv/Vol/Dec 2258/678 mln/754
1:00 pm : Telecom (-0.6%) is lagging the other economic sectors this session. It found favor in previous sessions as bellwether Verizon (VZ 30.36, -0.14) posted quarterly results that were in-line with expectations, attracting investors to its steady business. Despite moving lower this session, shares of VZ are up roughly 20% since Monday morning.
Financials (+0.3%) are lagging as well, though they remain in positive ground. Goldman Sachs (GS 92.11, -5.55) has been one of the weaker performers in the sector. Goldman and Morgan Stanley (MS 15.47, +0.71) both had their earnings estimates cut by analysts at Merrill Lynch.
Shares of Morgan Stanley have become so depressed, down roughly 70% year-to-date, they are actually trading well below the value of their cash and equivalents. As of Morgan Stanley's latest quarter, which ended in August, cash and equivalents totaled more than $21 per share.DJ30 +57.59 NASDAQ +13.29 SP500 +8.72 NASDAQ Adv/Vol/Dec 1727/1.26 bln/857 NYSE Adv/Vol/Dec 2207/618 mln/786
12:30 pm : Stocks recently fell into negative ground, but recently pulled upward.
One of the session's weakest performers is Cigna (CI 15.30, -4.55). The company issued downside guidance upon announcing its latest results. The stock is also one of the hardest hit this year. Going into this session, the stock had already posted a total year-to-date return of -63%. Rumors are also circulating that a tier one firm has downgraded the stock to Sell.DJ30 +60.78 NASDAQ +12.82 SP500 +7.24 NASDAQ Adv/Vol/Dec 1707/1.16 bln/860 NYSE Adv/Vol/Dec 2182/566 mln/805
12:05 pm : The major indices opened with strong gains, quickly advancing more than 3% each, but buyers are beginning to move toward the sidelines.
The bullish tone has been helped largely by continued efforts by central banks to restore credit and capital markets. Central banks in Asia followed the FOMC's decision to trim target interest rates. New dollar swap lines have also been opened.
Fearful that tighter credit and capital has repressed economic activity, the consensus third quarter GDP estimate called for the U.S. economy to contract at an annualized rate of 0.5%. Instead, advance third quarter GDP declined at an annualized rate of 0.3%. Though the decline was softer than feared, disappointing trends in consumer spending stand out. Consumer spending declined at a 3.1% annual rate and its contribution to the GDP change was -2.25%. Net exports also came in weak, but could provide an upward revision in subsequent reports, helping the overall GDP figure be revised to positive territory.
Still, consumer spending, which accounts for around two-thirds of economic activity, remains uncertain, especially as labor markets continue to show weakness. Initial claims for the week ended Oct. 25 were unchanged from the prior week at 479,000. That was slightly worse than the consensus estimate of 475,000. The data point to another month of nonfarm payroll declines. However, with the four-week moving average improving to 475,500 from 480,500, there is some reassurance the weekly trend isn't worsening.
Corporate earnings announcements have generally been better than expected. Integrated oil major Exxon Mobil (XOM 72.02, -2.63) and oil services outfit BJ Services (BJS 12.48, -0.98) each posted an upside surprise, but with crude prices slipping (-3.8%) and future earnings in question the pair is out of favor. Consumer staples icon Colgate-Palmolive (CL 63.23, +3.23) also saw strong numbers, but it expects double-digit earnings growth to continue. Elsewhere, media company CBS Corp (CBS 9.26, +0.54) topped the consensus earnings per share estimate. Utility holding company Dominion (D 35.46, +0.25) also fared well with strong revenue and earnings per share results.
Financial companies (+0.3%) have been lagging during the session. As the Treasury confirmed its $125 billion investment in nine major banks, including Goldman Sachs (GS 90.63, -7.03) and Morgan Stanley (MS 15.27, +0.51), Merrill Lynch (MER 17.78, +0.23) lowered earnings estimates on the pair.DJ30 +36.80 NASDAQ +10.37 SP500 +5.06 NASDAQ Adv/Vol/Dec 849/1692/1.04 bln NYSE Adv/Vol/Dec 2095/509 mln/865
11:35 am : Concerted efforts by central banks to improve liquidity in credit and capital markets has helped the session's bullish sentiment. Following the FOMC's decision yesterday to cut the fed funds target rate to 1.00% from 1.50%, central banks in Asia followed by trimming target rates as well. In addition to the rate cuts, the Fed opened dollar swap lines with certain central banks, including Brazil, Mexico, and South Korea.
Underscoring the session's positive tone is the fact gainers in the S&P 500 outnumber losers by a margin of 4-to-1.
Apple (AAPL 109.66) is one of the best performers in the S&P 500. Its shares have rebounded 15% since Monday's closing. The stock has been hit particularly hard as investors fear consumers will be less willing to pay for gadgets like iPods, iPhones, or Apple's personal computers and laptops, which typically cost more than those of competitors.DJ30 +85.55 NASDAQ +19.10 SP500 +10.80 NASDAQ Adv/Vol/Dec 1810/875 mln/684 NYSE Adv/Vol/Dec 2322/428 mln/630
11:00 am : Gains were pared across every economic sector, but stocks have since retraced the downturn. Energy was in negative territory for a moment, but is now up 1.4%.
The energy sector is being pulled in opposing directions by its many players. Smaller sector plays like Pride International (PDE 17.24, +1.08) and Murphy Oil (MUR 48.11, +0.80) posted better-than-expected earnings per share results for the latest quarter and are trading with healthy gains. Meanwhile, sector giant and Dow component Exxon Mobil (XOM 72.84, -1.81) is trading lower despite posting another quarter of record earnings.
The outlook for oil service companies and integrated oil companies has been rather downbeat with crude down more than 50% from record highs seen just months ago. Oil and gas prices have been slashed as demand weakens amid a dim economic outlook. Crude continues to trade markedly lower this session, down 2.2% to approximately $66 per barrel.
The drop in crude prices has helped transportation companies and airlines. The Dow Jones Transportation Index is up 2.3% and the Amex Airline index is 6.5% higher.
Airlines are also receiving help as Delta Air Lines (DAL 9.19, +1.20) has completed its merger with Northwest Airlines. Airlines came under increased pressure to consolidate and improve scaled economies as fuel costs climbed to record highs. Though fuel costs have come down, airlines still face the task of attracting passengers amid tenuous economic conditions and soft labor markets.DJ30 +123.86 NASDAQ +25.61 SP500 +16.57 NASDAQ Adv/Vol/Dec 1835/704 mln/614 NYSE Adv/Vol/Dec 2328/350 mln/565
10:30 am : Gains remain healthy, but the major indices continue trending downward.
Commodities are down after jumping in the prior session. Oil futures are indicated 2.9% lower, trading near $65.50 per barrel. The CRB Commodity Index is down 0.9% at 271.90.DJ30 +118.60 NASDAQ +25.12 SP500 +16.74 NASDAQ Adv/Vol/Dec 1843/519 mln/533 NYSE Adv/Vol/Dec 2358/267 mln/476
10:00 am : Stocks have come off their early morning highs, but continue to trade with solid gains. The question remains the same, though, which is whether they finish higher or lower.
At any rate, bullishness in the early going follows interest rate cuts in the U.S. and Asia, which came as part of an effort to make capital less expensive to borrowers. The cheaper capital aims to increase borrowing and, in turn, business activity. The overall intended result is increased economic activity.
The latest GDP data indicated the U.S. economy contracted at an annualized rate of 0.3%.DJ30 +186.94 NASDAQ +41.84 SP500 +25.14 NASDAQ Adv/Vol/Dec 1879/305 mln/371 NYSE Adv/Vol/Dec 2397/173 mln/360
09:45 am : The stock market has opened with solid gains as all ten of the major economic sectors advance.
The early bullish tone comes despite data that indicate the U.S. economy contracted at an annualized rate of 0.3% in the third quarter. The decline marks the weakest performance by the U.S. economy since 2001. However, the data was better than the consensus estimate, which called for a 0.5% decline.
Consumer spending declined at a 3.1% annual rate, according to the latest data. Though this suggests a dour tone among shoppers, retailers have been outperforming the broader market in recent sessions. Retailers, as a group, are up 4.5% in the early going.DJ30 +233.05 NASDAQ +46.26 SP500 +28.65 NASDAQ Adv/Dec 1834/309 NYSE Adv/Dec 2359/297
09:16 am : S&P futures vs fair value: +32.70. Nasdaq futures vs fair value: +28.50. A positive start is in the making as futures continue to lead fair value ahead of the session's opening bell.
09:02 am : S&P futures vs fair value: +29.70. Nasdaq futures vs fair value: +26.00. Stocks remain on track for a positive start. Exxon Mobil (XOM) posted strong profits, which were helped by special gains. Waste Management (WMI) issued upside earnings per share results of its own. CBS (CBS) also topped expectations.
08:35 am : S&P futures vs fair value: +28.40. Nasdaq futures vs fair value: +21.50. Futures continue to indicate a positive start to the session. The advance third quarter GDP report indicated the economy contracted at an annualized rate of 0.3%. The consensus called for a 0.5% decline. Second quarter GDP was unrevised at a 2.8% increase. Third quarter personal consumption showed a 3.1% decline, which is below the consensus estimate of a 2.4% decline, and down from the prior quarter's 1.2% advance. Core personal consumption expenditures (PCE) was up 2.9%, above the 2.5% reading that was expected and also up from the prior quarter's 2.2% advance. Advance third quarter GDP Price Index increased 4.2%, which is above the 4.0% increase that was widely expected. The price index for the second quarter was 1.1%. Jobless claims for the week ending October 25 totaled 479,000, which is even with the prior week and slightly ahead of the consensus estimate.
08:00 am : S&P futures vs fair value: +26.70. Nasdaq futures vs fair value: +27.50. A positive tone is indicated early on as quarterly announcements continue to pile up. Oil companies Pride International (PDE), Murphy Oil (MUR), and BJ Services (BJS) each announced better-than-expected earnings per share results. Murphy and BJ, however, issued downside guidance. In the utilities sector, Dominion (D) and DTE Energy (DTE) topped earnings expectations. Elsewhere, Colgate Palmolive (CL) announced earnings per share results that exceeded the consensus estimate, and expects double-digit earnings growth to continue in 2009. Visa (V) and CME Group (CME) posted upside results for the latest quarter. Investors await the advance third quarter GDP report, which is due at the bottom of the hour.
06:27 am : S&P futures vs fair value: +23.70. Nasdaq futures vs fair value: +30.30.
06:27 am : Nikkei...9029.76...+817.90...+9.90%. Hang Seng...14329.85...+1627.80...+12.80%.
06:27 am : FTSE...4282.93...+40.40...+0.90%. DAX...4971.71...+163.20...+3.40%.
http://biz.yahoo.com/mu/update.html
4:25 pm : The stock market's swings continued Thursday. After jumping out to a strong gain, the major indices drifted to the unchanged mark before chopping back to higher ground. Gains came under pressure late in the session, but a last minute rally helped the major indices finish with strong gains.
Stocks were up more than 3% early on as investors assessed better-than-feared economic data and central bank moves to loosen capital markets.
Central banks in Asia trimmed target interest rates the day after the FOMC made cuts of its own. The Fed has also opened dollar swap lines with the likes of Mexico, South Korea, and Brazil. The moves come as central banks continue to fight systemic weakness in credit and capital markets. Such weakness has undermined economic prospects and led many to fear a global recession.
The advance third quarter GDP reading indicated the U.S. economy declined at an annualized rate of 0.3%, which is not as bad as the 0.5% decline that was widely expected. There is potential the GDP data may be revised upward, considering September net exports data was estimated.
Consumer spending remains a concern for economic growth, though, since it has historically accounts for more than two-thirds of economic activity. Consumer spending declined at a 3.1% annual rate and caused a drop of -2.25% in the latest GDP reading.
Prospects for consumer spending remain dim as jobless claims remain elevated. Initial claims for the week ending Oct. 25 were unchanged week-over-week at 479,000. Though that was slightly worse than the consensus estimate of 475,000, the four-week moving average improved to 475,500 from 480,500. Still, the data point to a 10th consecutive month of nonfarm payroll declines.
The jobless data coincide with continued reports of layoffs from major corporations. American Express (AXP 26.06, +0.85) is the latest to make cuts to its workforce, eliminating 7,000 jobs. The decision comes as part of a plan to cut operating costs.
Elsewhere in corporate news, major oil company and Dow component Exxon Mobil (XOM 75.05, +0.40) posted its fourth straight record quarterly profit. However, with crude prices down 55% from record highs, the outlook for major oil companies looks less lucrative. Crude finished the session roughly $1.40 lower at $66.10 per barrel.
Also joining the earnings parade were Colgate-Palmolive (CL 64.23, +4.23), Waste Management (WMI 31.44, +1.84), and Dominion (D 36.27, +1.06). Each posted better-than-expected earnings per share results.
Though ending the session higher, financial companies (+1.3%) continue to lag. The Treasury confirmed its $125 billion investment in nine major banks, including Goldman Sachs (GS 91.11, -6.55), Morgan Stanley (MS 16.09, +1.33), and JPMorgan (JPM 37.62, +1.91), to name a few. Their shares finished in mixed fashion as investors assessed word that Merrill Lynch (MER 17.78, +0.23) lowered earnings estimates on Goldman and Morgan Stanley, but raised them for JPMorgan.
Stocks came under pressure late in the session when San Francisco Fed President Yellen stated recent the economy is likely to contract significantly in the fourth quarter. The impact of the comments didn't last too long as buying interest quickly resumed to help the major indices finish near afternoon highs.DJ30 +189.73 NASDAQ +41.31 NQ100 +2.4% R2K +4.8% SP400 +4.2% SP500 +24.00 NASDAQ Adv/Vol/Dec 2076/2.54 bln/669 NYSE Adv/Vol/Dec 2510/1.38 bln/574
3:30 pm : Stocks fell precipitously after reaching afternoon highs. The major indices are currently on the rebound, though.
San Francisco Fed President Yellen stated in a speech that recent economic data is deeply worrisome and the economy is likely to contract significantly in the fourth quarter. Yellen also stated the impact of credit conditions has outpaced the Fed's moves to lower rates.
Despite such concerns, stocks continue to show strength. Broad-based gains remain as only the telecom sector (-0.2%) trades in the red.
The interest in equities has kept pressure on Treasuries for the entire session. The 10-year Note is near its worst level of the session, currently down 23 ticks.DJ30 +138.03 NASDAQ +33.10 SP500 +17.46 NASDAQ Adv/Vol/Dec 1940/2.06 bln/767 NYSE Adv/Vol/Dec 2372/987 mln/696
3:00 pm : Trading remains choppy. The major indices have been unable to put together a sustainable afternoon rebound that will take them back to early session highs.
Though trading with a healthy gain, the financial sector continues to lag the broader market. Financials are currently up 1.0%, but were up 3.5% at their best level of the session.
AIG (AIG 1.65, +0.10) disclosed it has applied for participation in the Federal Reserve's commercial paper funding facility. According to sources, the company has already drawn down more than $85 billion in loans from the Fed, more than it initially planned. AIG shares are down more than 95% year-to-date.DJ30 +150.06 NASDAQ +37.18 SP500 +18.52 NASDAQ Adv/Vol/Dec 1961/1.82 bln/727 NYSE Adv/Vol/Dec 2421/883 mln/640
2:30 pm : The stock market has advanced to its best level of the afternoon, though it is still well short of the 3.6% advance it was touting early on. There is no clear catalyst behind the move, but the advance is broad based.
Small-cap stocks are showing some of the best gains. The Russell 2000 is currently up 3.2%. DJ30 +186.30 NASDAQ +40.28 SP500 +22.31 NASDAQ Adv/Vol/Dec 1919/1.65 bln/737 NYSE Adv/Vol/Dec 2390/804 mln/644
2:00 pm : The major indices continue to chop along. Gains remain impressive, but the Dow, Nasdaq, and S&P 500 are off their session highs. Each index traded more than 3% higher in the early going.
Crude prices continue to trade lower. Crude futures are now down 3.7% to $65 per barrel. Their prices are down more than 30% year-to-date.
Despite the downturn in oil prices, energy stocks are trading up 1.7%, which is slightly ahead of the broader market. Oil and gas refiners (+6.5%) are among the energy sector's best performers.DJ30 +120.11 NASDAQ +26.93 SP500 +14.36 NASDAQ Adv/Vol/Dec 1794/1.50 bln/846 NYSE Adv/Vol/Dec 2300/733 mln/722
1:30 pm : Stocks continue to extend their turnaround after briefly falling into the red. The major indices are currently off their afternoon highs, though.
The defensive-orientated utilities sector is outperforming the other sectors. It is currently up 2.5%, helped by an upbeat announcement from utility holding company Dominion (D 36.01, +0.80). Shares of the traditionally defensive holding haven't been entirely resistent to broad market mayhem; they are down 25% year-to-date. However, that is still better than the 35% dive taken by the S&P 500 this year.DJ30 +92.79 NASDAQ +21.65 SP500 +12.05 NASDAQ Adv/Vol/Dec 1752/1.40 bln/867 NYSE Adv/Vol/Dec 2258/678 mln/754
1:00 pm : Telecom (-0.6%) is lagging the other economic sectors this session. It found favor in previous sessions as bellwether Verizon (VZ 30.36, -0.14) posted quarterly results that were in-line with expectations, attracting investors to its steady business. Despite moving lower this session, shares of VZ are up roughly 20% since Monday morning.
Financials (+0.3%) are lagging as well, though they remain in positive ground. Goldman Sachs (GS 92.11, -5.55) has been one of the weaker performers in the sector. Goldman and Morgan Stanley (MS 15.47, +0.71) both had their earnings estimates cut by analysts at Merrill Lynch.
Shares of Morgan Stanley have become so depressed, down roughly 70% year-to-date, they are actually trading well below the value of their cash and equivalents. As of Morgan Stanley's latest quarter, which ended in August, cash and equivalents totaled more than $21 per share.DJ30 +57.59 NASDAQ +13.29 SP500 +8.72 NASDAQ Adv/Vol/Dec 1727/1.26 bln/857 NYSE Adv/Vol/Dec 2207/618 mln/786
12:30 pm : Stocks recently fell into negative ground, but recently pulled upward.
One of the session's weakest performers is Cigna (CI 15.30, -4.55). The company issued downside guidance upon announcing its latest results. The stock is also one of the hardest hit this year. Going into this session, the stock had already posted a total year-to-date return of -63%. Rumors are also circulating that a tier one firm has downgraded the stock to Sell.DJ30 +60.78 NASDAQ +12.82 SP500 +7.24 NASDAQ Adv/Vol/Dec 1707/1.16 bln/860 NYSE Adv/Vol/Dec 2182/566 mln/805
12:05 pm : The major indices opened with strong gains, quickly advancing more than 3% each, but buyers are beginning to move toward the sidelines.
The bullish tone has been helped largely by continued efforts by central banks to restore credit and capital markets. Central banks in Asia followed the FOMC's decision to trim target interest rates. New dollar swap lines have also been opened.
Fearful that tighter credit and capital has repressed economic activity, the consensus third quarter GDP estimate called for the U.S. economy to contract at an annualized rate of 0.5%. Instead, advance third quarter GDP declined at an annualized rate of 0.3%. Though the decline was softer than feared, disappointing trends in consumer spending stand out. Consumer spending declined at a 3.1% annual rate and its contribution to the GDP change was -2.25%. Net exports also came in weak, but could provide an upward revision in subsequent reports, helping the overall GDP figure be revised to positive territory.
Still, consumer spending, which accounts for around two-thirds of economic activity, remains uncertain, especially as labor markets continue to show weakness. Initial claims for the week ended Oct. 25 were unchanged from the prior week at 479,000. That was slightly worse than the consensus estimate of 475,000. The data point to another month of nonfarm payroll declines. However, with the four-week moving average improving to 475,500 from 480,500, there is some reassurance the weekly trend isn't worsening.
Corporate earnings announcements have generally been better than expected. Integrated oil major Exxon Mobil (XOM 72.02, -2.63) and oil services outfit BJ Services (BJS 12.48, -0.98) each posted an upside surprise, but with crude prices slipping (-3.8%) and future earnings in question the pair is out of favor. Consumer staples icon Colgate-Palmolive (CL 63.23, +3.23) also saw strong numbers, but it expects double-digit earnings growth to continue. Elsewhere, media company CBS Corp (CBS 9.26, +0.54) topped the consensus earnings per share estimate. Utility holding company Dominion (D 35.46, +0.25) also fared well with strong revenue and earnings per share results.
Financial companies (+0.3%) have been lagging during the session. As the Treasury confirmed its $125 billion investment in nine major banks, including Goldman Sachs (GS 90.63, -7.03) and Morgan Stanley (MS 15.27, +0.51), Merrill Lynch (MER 17.78, +0.23) lowered earnings estimates on the pair.DJ30 +36.80 NASDAQ +10.37 SP500 +5.06 NASDAQ Adv/Vol/Dec 849/1692/1.04 bln NYSE Adv/Vol/Dec 2095/509 mln/865
11:35 am : Concerted efforts by central banks to improve liquidity in credit and capital markets has helped the session's bullish sentiment. Following the FOMC's decision yesterday to cut the fed funds target rate to 1.00% from 1.50%, central banks in Asia followed by trimming target rates as well. In addition to the rate cuts, the Fed opened dollar swap lines with certain central banks, including Brazil, Mexico, and South Korea.
Underscoring the session's positive tone is the fact gainers in the S&P 500 outnumber losers by a margin of 4-to-1.
Apple (AAPL 109.66) is one of the best performers in the S&P 500. Its shares have rebounded 15% since Monday's closing. The stock has been hit particularly hard as investors fear consumers will be less willing to pay for gadgets like iPods, iPhones, or Apple's personal computers and laptops, which typically cost more than those of competitors.DJ30 +85.55 NASDAQ +19.10 SP500 +10.80 NASDAQ Adv/Vol/Dec 1810/875 mln/684 NYSE Adv/Vol/Dec 2322/428 mln/630
11:00 am : Gains were pared across every economic sector, but stocks have since retraced the downturn. Energy was in negative territory for a moment, but is now up 1.4%.
The energy sector is being pulled in opposing directions by its many players. Smaller sector plays like Pride International (PDE 17.24, +1.08) and Murphy Oil (MUR 48.11, +0.80) posted better-than-expected earnings per share results for the latest quarter and are trading with healthy gains. Meanwhile, sector giant and Dow component Exxon Mobil (XOM 72.84, -1.81) is trading lower despite posting another quarter of record earnings.
The outlook for oil service companies and integrated oil companies has been rather downbeat with crude down more than 50% from record highs seen just months ago. Oil and gas prices have been slashed as demand weakens amid a dim economic outlook. Crude continues to trade markedly lower this session, down 2.2% to approximately $66 per barrel.
The drop in crude prices has helped transportation companies and airlines. The Dow Jones Transportation Index is up 2.3% and the Amex Airline index is 6.5% higher.
Airlines are also receiving help as Delta Air Lines (DAL 9.19, +1.20) has completed its merger with Northwest Airlines. Airlines came under increased pressure to consolidate and improve scaled economies as fuel costs climbed to record highs. Though fuel costs have come down, airlines still face the task of attracting passengers amid tenuous economic conditions and soft labor markets.DJ30 +123.86 NASDAQ +25.61 SP500 +16.57 NASDAQ Adv/Vol/Dec 1835/704 mln/614 NYSE Adv/Vol/Dec 2328/350 mln/565
10:30 am : Gains remain healthy, but the major indices continue trending downward.
Commodities are down after jumping in the prior session. Oil futures are indicated 2.9% lower, trading near $65.50 per barrel. The CRB Commodity Index is down 0.9% at 271.90.DJ30 +118.60 NASDAQ +25.12 SP500 +16.74 NASDAQ Adv/Vol/Dec 1843/519 mln/533 NYSE Adv/Vol/Dec 2358/267 mln/476
10:00 am : Stocks have come off their early morning highs, but continue to trade with solid gains. The question remains the same, though, which is whether they finish higher or lower.
At any rate, bullishness in the early going follows interest rate cuts in the U.S. and Asia, which came as part of an effort to make capital less expensive to borrowers. The cheaper capital aims to increase borrowing and, in turn, business activity. The overall intended result is increased economic activity.
The latest GDP data indicated the U.S. economy contracted at an annualized rate of 0.3%.DJ30 +186.94 NASDAQ +41.84 SP500 +25.14 NASDAQ Adv/Vol/Dec 1879/305 mln/371 NYSE Adv/Vol/Dec 2397/173 mln/360
09:45 am : The stock market has opened with solid gains as all ten of the major economic sectors advance.
The early bullish tone comes despite data that indicate the U.S. economy contracted at an annualized rate of 0.3% in the third quarter. The decline marks the weakest performance by the U.S. economy since 2001. However, the data was better than the consensus estimate, which called for a 0.5% decline.
Consumer spending declined at a 3.1% annual rate, according to the latest data. Though this suggests a dour tone among shoppers, retailers have been outperforming the broader market in recent sessions. Retailers, as a group, are up 4.5% in the early going.DJ30 +233.05 NASDAQ +46.26 SP500 +28.65 NASDAQ Adv/Dec 1834/309 NYSE Adv/Dec 2359/297
09:16 am : S&P futures vs fair value: +32.70. Nasdaq futures vs fair value: +28.50. A positive start is in the making as futures continue to lead fair value ahead of the session's opening bell.
09:02 am : S&P futures vs fair value: +29.70. Nasdaq futures vs fair value: +26.00. Stocks remain on track for a positive start. Exxon Mobil (XOM) posted strong profits, which were helped by special gains. Waste Management (WMI) issued upside earnings per share results of its own. CBS (CBS) also topped expectations.
08:35 am : S&P futures vs fair value: +28.40. Nasdaq futures vs fair value: +21.50. Futures continue to indicate a positive start to the session. The advance third quarter GDP report indicated the economy contracted at an annualized rate of 0.3%. The consensus called for a 0.5% decline. Second quarter GDP was unrevised at a 2.8% increase. Third quarter personal consumption showed a 3.1% decline, which is below the consensus estimate of a 2.4% decline, and down from the prior quarter's 1.2% advance. Core personal consumption expenditures (PCE) was up 2.9%, above the 2.5% reading that was expected and also up from the prior quarter's 2.2% advance. Advance third quarter GDP Price Index increased 4.2%, which is above the 4.0% increase that was widely expected. The price index for the second quarter was 1.1%. Jobless claims for the week ending October 25 totaled 479,000, which is even with the prior week and slightly ahead of the consensus estimate.
08:00 am : S&P futures vs fair value: +26.70. Nasdaq futures vs fair value: +27.50. A positive tone is indicated early on as quarterly announcements continue to pile up. Oil companies Pride International (PDE), Murphy Oil (MUR), and BJ Services (BJS) each announced better-than-expected earnings per share results. Murphy and BJ, however, issued downside guidance. In the utilities sector, Dominion (D) and DTE Energy (DTE) topped earnings expectations. Elsewhere, Colgate Palmolive (CL) announced earnings per share results that exceeded the consensus estimate, and expects double-digit earnings growth to continue in 2009. Visa (V) and CME Group (CME) posted upside results for the latest quarter. Investors await the advance third quarter GDP report, which is due at the bottom of the hour.
06:27 am : S&P futures vs fair value: +23.70. Nasdaq futures vs fair value: +30.30.
06:27 am : Nikkei...9029.76...+817.90...+9.90%. Hang Seng...14329.85...+1627.80...+12.80%.
06:27 am : FTSE...4282.93...+40.40...+0.90%. DAX...4971.71...+163.20...+3.40%.
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