AI
Thursday, November 06, 2008 8:09:04 PM
Market Update 081106
http://biz.yahoo.com/mu/update.html
4:20 pm : Downbeat economic data, abysmal retail sales, and weak business prospects reminded investors just how tenuous the macro environment has become. Sellers dominated Thursday's action and pushed stocks sharply lower for the second straight session. The two-day slide amounted to a 10.0% loss, the worst two day drop in nearly one month.
Job markets remain loose as claims stand at recession-like levels. Weekly jobless claims for the week ended Nov. 1 totaled 481,000, down 4,000 from the prior week. The weekly number was roughly in-line with the consensus estimate, and the four-week moving average held steady at 477,000. Economists await the October unemployment rate due tomorrow morning.
Nonfarm business productivity rose at a 1.1% annual rate in the third quarter, in-line with expectations. Unit labor costs rose at a 3.6% annual rate, which was more than expected.
With job losses mounting, consumers are less willing to spend their discretionary dollars. In turn, Nordstrom (JWN 15.23, -0.78), Gap (GPS 12.46, -0.38), American Eagle (AEO 10.01, -0.16), and Abercrombie & Fitch (ANF 26.55, -0.23) all reported double-digit declines in October same-store sales.
Wholesalers and discounters like BJ's Wholesale (BJ 36.22, +0.64) and Wal-Mart (WMT 54.47, +0.34) fared better, able to benefit by attracting cash-strapped shoppers to their stores. Both posted increased same-store sales for October.
Retailers haven't been the only companies battling against stiff macro headwinds. Tech bellwether Cisco (CSCO 16.94, -0.45) posted better-than-expected earnings per share results for the latest quarter, but disappointed when it announced it expects revenue to take a downturn.
Challenging business conditions continue weighing on actual earnings results and earnings expectations. Analysts at Morgan Stanley project Goldman Sachs (GS 80.72, -6.71) will post its first quarterly loss since the former Wall Street star went public just over a decade ago.
Declines among financial stocks made them the worst performing economic sector. It shed 6.7% this session and is now just 10.8% above its 52-week low, reached nearly two weeks ago.
After Google (GOOG 331.22, -11.02) walked away from a proposed business alliance with Yahoo! (YHOO 13.96, +0.04), Yahoo stated it is a strategic fit for Microsoft (MSFT 20.88, -1.20). Microsoft offered to pay Yahoo roughly $33 per share earlier this year, but walked away when Yahoo argued the price was too low.
The negative bias among market participants took stocks steadily lower as the session progressed. The major indices finished near their session lows, each down more than 6.5% week-to-date.DJ30 -443.48 NASDAQ -72.94 SP500 -47.89 NASDAQ Adv/Vol/Dec 570/2.39 bln/2191 NYSE Adv/Vol/Dec 538/1.53 bln/2575
3:30 pm : Stocks drift back to their earlier lows as investors head into the final leg of the trading session. The declines make for a 10.2% slide over the past two sessions. The downturn during that time is the worst since mid-October.
Losses remain steep and broad based. Decliners outnumber advancing issues by roughly 5-to-1 on the New York Stock Exchange.DJ30 -458.45 NASDAQ -65.80 SP500 -46.86 NASDAQ Adv/Vol/Dec 662/1.94 bln/2073 NYSE Adv/Vol/Dec 537/1.08 bln/2560
3:00 pm : As the broader market flounders, homebuilders (+2.6%) are finding support. Lennar (LEN 8.76, +0.20), DR Horton (DHI 7.25, +0.44), and Pulte Homes (PHM 10.91, +0.25) are all advancing handsomely.
Many homebuilders have outperformed the broader market this year as investors try to pick up on their depressed stock prices. Homebuilders were hit hard as the housing bubble deflated and reduced prospects for the industry. DJ30 -343.44 NASDAQ -48.67 SP500 -36.00 NASDAQ Adv/Vol/Dec 813/1.75 bln/1908 NYSE Adv/Vol/Dec 658/972 mln/2427
2:30 pm : The stock market has pulled up from its session low. However, losses remain steep as few stocks have found support this session.
Yahoo! (YHOO 14.23, -0.31) has been one of the few beneficiaries of buying interest. The company's chief executive, Jerry Yang, indicated that Yahoo remains an attractive strategic fit for Microsoft (MSFT 21.07, -1.01). However, selling the company would require the right price. Shares of YHOO currently trade more than 50% below Microsoft's offer of $33 per share roughly six months ago.
The comments from Yang follow the dissolution of plans to join Internet search business with Google (GOOG 328.45, -13.79). Google walked away from the plan after stating the deal did not fit its core values. DJ30 -417.12 NASDAQ -60.41 SP500 -43.96 NASDAQ Adv/Vol/Dec 679/1.58 bln/2017 NYSE Adv/Vol/Dec 546/877 mln/2531
2:00 pm : After falling roughly 450 points the Dow is making a slight upswing in an attempt to pare losses. It still has a long way to go in order to completely reverse the session's downturn.
Every one of the major economic sectors is trading with a loss of at least 2%. Energy (-5.8%) and industrials (-5.9%) are the session's worst offenders.DJ30 -384.06 NASDAQ -61.73 SP500 -42.44 NASDAQ Adv/Vol/Dec 626/1.43 bln/2054 NYSE Adv/Vol/Dec 501/796 mln/2564
1:30 pm : More than 90% of the stocks in the S&P 500 are trading with losses. Of the 30 Dow components, 27 are in the red; Merck (MRK 28.73, +0.01), Procter & Gamble (PG 64.13, +0.32), and Wal-Mart (WMT 54.23, +0.10) are the only names in the blue chip index making an advance.
The drop in stocks has accelerated buying in Treasuries. The benchmark 10-year Note was down considerably early on, but has since reversed its downturn to trade 3 ticks higher. That has pushed its yield lower to 3.69%. The Note's yield was 3.75% earlier.DJ30 -394.97 NASDAQ -61.28 SP500 -42.97 NASDAQ Adv/Vol/Dec 615/1.31 bln/2035 NYSE Adv/Vol/Dec 512/722 mln/2533
1:00 pm : The Dow and S&P 500 recently extended their respective losses to more than 4%. The session's negative tone has been present from the start.
Foreign indices fell lower Thursday. The Nikkei shed 6.5% and the Hang Seng fell 7.1%. The DAX fell 6.8% and the CAC dropped 6.4%. The FTSE slipped 5.7%.
The European Central Bank cut its target interest rate 50 basis points to 3.25%. The cut in rates, along with the relative safety of U.S. securities, has the dollar moving higher. It is currently up 1.4% against a basket of currencies. DJ30 -336.35 NASDAQ -57.05 SP500 -37.31 NASDAQ Adv/Vol/Dec 601/1.19 bln/2033 NYSE Adv/Vol/Dec 525/650 mln/2501
12:30 pm : Stocks continue their gradual descent, taking out fresh session lows. The Dow Jones Industrial Average is down 350 points.
Small-cap stocks are trading with significant losses, but their downturn is less pronounced than their larger capitalized cousins. The Russell 2000 is currently down 2.8%, following strong selling pressure in the prior session. The Russell 2000 finished 5.7% lower Wednesday.DJ30 -350.93 NASDAQ -58.33 SP500 -38.96 NASDAQ Adv/Vol/Dec 599/1.08 bln/2008 NYSE Adv/Vol/Dec 534/579 mln/2476
12:05 pm : The stock market is extending the prior session's slide as uncertainty continues to govern trading action. Disappointing earnings results and guidance along with extremely weak same-store sales results from a host of retailers have offered little encouragement.
Cisco (CSCO 17.07, -0.32) posted better-than-expected earnings per share results for the latest quarter, but expects a downturn in quarterly revenue. The outlook looms over the technology sector since Cisco is regarded as a tech bellwether.
Media giant News Corp (NWS.A 8.20, -1.59) reported earnings per share results that were below expectations. The stock, in turn, was downgraded to Neutral from Overweight by analysts at JPMorgan.
Retailers have been putting up some truly disappointing same-store sales results for October, reflecting the weak state of the consumer. Nordstrom (JWN 16.42, +0.41), Target (TGT 36.87, +0.88), Macy's (M 10.88, +0.03), Gap (GPS 13.25, +0.41), American Eagle (AEO 10.28, +0.11), and Abercrombie & Fitch (ANF 27.08, +0.30) all reported a drop in sales from stores open at least one year.
Discount retailers and wholesale companies like BJ's Wholesale (BJ 37.26, +1.68) and Wal-Mart (WMT 54.47, +0.34) have shown resilience in the face of economic headwinds. Their business has benefited from cash-strapped shoppers seeking bargain prices.
Elsewhere in corporate news, Yahoo! (YHOO 14.30, +0.38) stated it is a strategic fit for Microsoft (MSFT 21.59, -0.49). The statement came with a qualifier, though, as Yahoo noted it would sell for the right price. Yahoo already walked away from a Microsoft offer to pay Yahoo roughly $33 per share.
Companies fretting over a gloomy economic outlook have them trimming their workforces. Goldman Sachs (GS 85.00, -2.43) and Citigroup (C 12.06, -0.57) announced their cuts are in progress, complementing the initial jobless claims data for the week ended Nov. 1, which totaled 481,000, leaving the four-week moving average steady at 477,000. Though the weekly number was roughly in-line with the consensus estimate, claims are holding at recession-like levels and reflect a weak labor market.
Separately, nonfarm business productivity rose at a 1.1% annual rate in the third quarter. This was generally in-line with expectations. The gain occurred despite a drop in output at a 1.7% annual rate as businesses cut back on hours worked (in part due to fewer employees) at a 2.7% annual rate. The year-over-year increase in productivity of 2.3% is consistent with the long-term trend of about 2%.
Unit labor costs rose at a 3.6% annual rate, but this follows a decline of 0.5% in the second quarter and just a 1.2% rate of gain in the first quarter. The year-over-year increase in unit labor costs is just 2.3%.
Stocks have slid nearly 8.5% over the past two sessions. Selling interest continues to outweigh buying efforts amid the glum announcements and dour data. Gains early in the week have helped limit losses for the week, though. Week-to-date the stock market is off by 5%.DJ30 -280.60 NASDAQ -42.64 SP500 -30.98 NASDAQ Adv/Vol/Dec 727/961 mln/1846 NYSE Adv/Vol/Dec 616/518 mln/2385
11:30 am : The stock market continues its downward trend. Weakness remains broad based as all ten of the major economic sectors are showing losses.
Treasuries are trading lower, too. Their losses come despite falling stock prices, though their levels are improved from earlier. The 10-year Note is down 13 ticks currently.
Crude oil futures are off substantially. Prices are currently down by more than 7% to $60.50 per barrel. Oil's declines during this session and the prior session have it down 11% week-to-date, or 59% off its record high.
With market participants selling and oil on the slide, energy (-5.4%) is the session's weakest performing sector. Integrated players like Exxon Mobil (XOM 70.55, -3.14), Chevron (CVX 71.45, -3.43), and ConocoPhillips (COP 50.15, -3.31) are all laggards. DJ30 -272.79 NASDAQ -44.97 SP500 -30.62 NASDAQ Adv/Vol/Dec 652/806 mln/1863 NYSE Adv/Vol/Dec 595/428 mln/2365
11:05 am : Stocks remain in a funk. The combined impact of the prior session's slump and this session's losses has the stock market facing a week-to-date loss of 4.0%.
Automotive companies are being hit with stiff selling pressure. Shares of Ford (F 1.96, -0.13) and General Motors (GM 5.03, -0.23) are down substantially as investors continue to assess the outlook for the pair after reports of continued sales weakness. Given the uncertain economic picture, many question whether Ford or GM will be able to remain financially healthy. Recent reports indicate the White House has encouraged the automakers to file for loans. DJ30 -193.86 NASDAQ -38.09 SP500 -22.81 NASDAQ Adv/Vol/Dec 722/667 mln/1741 NYSE Adv/Vol/Dec 672/353 mln/2236
10:30 am : Stocks continue to trade lower with the Dow and the S&P 500 falling further to new session lows.
American Express (AXP 26.26, -1.57) had its earnings estimates cut by analysts at Barclays. Though American Express typically caters to well-heeled customers, it has been increasing loss reserves to protect against bad accounts.
Goldman Sachs (GS 86.66, -0.77) also had earnings estimates cut. Analysts at Morgan Stanley lowered their expectations for the firm's current quarter.DJ30 -149.02 NASDAQ -31.61 SP500 -18.93 NASDAQ Adv/Vol/Dec 775/497 mln/1603 NYSE Adv/Vol/Dec 748/258 mln/2106
10:05 am : Stocks quickly turn lower and fall to fresh morning lows.
Gains have been pared in the consumer staples (+0.1%). Amid the selling pressure financials (-0.1%) have been oscillating between a modest gain and a modest loss.
Support for the financial sector is coming from Citigroup (C 12.97, +0.34). Reports indicate the company is beginning to cut more than 9,000 jobs from its work force. The job cuts amount to less than 2.5% of its overall employee base.DJ30 -98.53 NASDAQ -32.21 SP500 -13.83 NASDAQ Adv/Vol/Dec 791/306 mln/1473 NYSE Adv/Vol/Dec 774/159 mln/1929
09:45 am : The major indices opened lower, with broad-based weakness. Stocks are improving their position quickly, though, as several economic sectors make their way into the green.
Notable strength is being exhibited by the consumer staples sector (+0.9%).
On the other hand, the consumer discretionary sector (-0.5%) remains in the red. Despite such weakness, retailers, as a whole, are actually posting a 1.3% advance. Such names as Nordstrom (JWN 16.51, +0.50) and Target (TGT 38.79, +1.04) are trading higher despite dour sales results in October. Nordstrom saw October same-store sales drop nearly 16%, while Target saw sales slide 4.8%.DJ30 -17.13 NASDAQ -14.04 SP500 -4.11 NASDAQ Adv/Dec 914/1233 NYSE Adv/Dec 1004/1590
09:15 am : S&P futures vs fair value: -10.20. Nasdaq futures vs fair value: -25.00. Stocks continue to face negative pressure with just minutes remaining before the session's opening bell. DIRECTV (DTV) posted earnings per share results for its third fiscal quarter that fell shy of the consensus estimate. Utility company PG&E (PCG) also missed the mark.
09:00 am : S&P futures vs fair value: -6.90. Nasdaq futures vs fair value: -19.00. The major indices remain on track for a downward start to the session, according to stock futures. October same-store sales reports from retailers continue to hit the wires. Many are reporting weak results, though select discount retailers and wholesalers are showing relative resilience. Crude oil futures extend the prior session's slide, currently down 1.4% to roughly $64.40 in early trading. Crude eclipsed the $70 mark earlier this week.
08:35 am : S&P futures vs fair value: -11.70. Nasdaq futures vs fair value: -27.50. Stock futures continue to indicate a downbeat tone ahead of the session's opening bell. Analysts at Morgan Stanley slashed their earnings estimate for Goldman Sachs (GS). Persistent uncertainty in financial markets and a clouded economic outlook have resulted in lower earnings expectations for many firms, and has also led to mounting job cuts on Wall Street. Recent reports indicate Goldman Sachs has informed some 3,200 employees, or 10% of its workforce, they will lose their jobs. Meanwhile, Bloomberg.com reported Citigroup (C) has begun notifying some of the 9,100 employees, or 2.6% of its workforce, whose jobs will be eliminated. The announcements coincide with continued government reports indicating a relatively weak labor market. Jobless claims for the week ending November 1 totaled 481,000, marking a 4,000 decrease from the prior week's upwardly revised claims number. The latest figures exceeded the 477,000 claims that were widely expected. Continuing claims through October 25 totaled 3.84 million, which is up from the 3.72 million continuing claims reported through the prior week. 3.74 million continuing claims were expected in the latest report. In other economic news, preliminary third quarter nonfarm productivity was up 1.1%, exceeding the 0.7% increase that was widely expected. Nonfarm productivity increased at a 3.6% rate in the prior report. Meanwhile, a preliminary reading of unit labor costs indicated a 3.6% increase, which is more than the 3.0% increase that was widely expected. Unit labor costs contracted by 0.1% for the prior reading.
08:00 am : S&P futures vs fair value: -13.40. Nasdaq futures vs fair value: -35.00. Stock futures indicate a downbeat tone to premarket trading. Cisco (CSCO) and Spectra Energy (SE) posted better-than-expected earnings per share results for the latest quarter. Williams Companies (WMB) missed the consensus EPS estimate. Media giant Newscorp (NWS.A) also reported earnings per share results that were below expectations, but had its shares downgraded to Neutral from Overweight by analysts at JPMorgan. Wal-Mart (WMT) continues to attract bargain hunters; the discount retail giant reported October same-store sales growth of 2.4%. It expects November same-store sales to grow between 1% and 3%. According to Reuters, chief executive for Yahoo! (YHOO), Jerry Yang, stated a deal between his company and Microsoft (MSFT) remains the best strategic option for Yahoo. Separately, England's central bank cut its benchmark lending rate to 3.0% from 4.5%, and the European Central Bank cut its target rate to 3.25% from 3.75%.
06:27 am : S&P futures vs fair value: -23.60. Nasdaq futures vs fair value: -37.50.
06:27 am : Nikkei...8899.14...-622.10...-6.50%. Hang Seng...13790.04...-1050.10...-7.10%.
06:27 am : FTSE...4335.92...-194.80...-4.30%. DAX...4942.32...-224.50...-4.40%.
http://biz.yahoo.com/mu/update.html
4:20 pm : Downbeat economic data, abysmal retail sales, and weak business prospects reminded investors just how tenuous the macro environment has become. Sellers dominated Thursday's action and pushed stocks sharply lower for the second straight session. The two-day slide amounted to a 10.0% loss, the worst two day drop in nearly one month.
Job markets remain loose as claims stand at recession-like levels. Weekly jobless claims for the week ended Nov. 1 totaled 481,000, down 4,000 from the prior week. The weekly number was roughly in-line with the consensus estimate, and the four-week moving average held steady at 477,000. Economists await the October unemployment rate due tomorrow morning.
Nonfarm business productivity rose at a 1.1% annual rate in the third quarter, in-line with expectations. Unit labor costs rose at a 3.6% annual rate, which was more than expected.
With job losses mounting, consumers are less willing to spend their discretionary dollars. In turn, Nordstrom (JWN 15.23, -0.78), Gap (GPS 12.46, -0.38), American Eagle (AEO 10.01, -0.16), and Abercrombie & Fitch (ANF 26.55, -0.23) all reported double-digit declines in October same-store sales.
Wholesalers and discounters like BJ's Wholesale (BJ 36.22, +0.64) and Wal-Mart (WMT 54.47, +0.34) fared better, able to benefit by attracting cash-strapped shoppers to their stores. Both posted increased same-store sales for October.
Retailers haven't been the only companies battling against stiff macro headwinds. Tech bellwether Cisco (CSCO 16.94, -0.45) posted better-than-expected earnings per share results for the latest quarter, but disappointed when it announced it expects revenue to take a downturn.
Challenging business conditions continue weighing on actual earnings results and earnings expectations. Analysts at Morgan Stanley project Goldman Sachs (GS 80.72, -6.71) will post its first quarterly loss since the former Wall Street star went public just over a decade ago.
Declines among financial stocks made them the worst performing economic sector. It shed 6.7% this session and is now just 10.8% above its 52-week low, reached nearly two weeks ago.
After Google (GOOG 331.22, -11.02) walked away from a proposed business alliance with Yahoo! (YHOO 13.96, +0.04), Yahoo stated it is a strategic fit for Microsoft (MSFT 20.88, -1.20). Microsoft offered to pay Yahoo roughly $33 per share earlier this year, but walked away when Yahoo argued the price was too low.
The negative bias among market participants took stocks steadily lower as the session progressed. The major indices finished near their session lows, each down more than 6.5% week-to-date.DJ30 -443.48 NASDAQ -72.94 SP500 -47.89 NASDAQ Adv/Vol/Dec 570/2.39 bln/2191 NYSE Adv/Vol/Dec 538/1.53 bln/2575
3:30 pm : Stocks drift back to their earlier lows as investors head into the final leg of the trading session. The declines make for a 10.2% slide over the past two sessions. The downturn during that time is the worst since mid-October.
Losses remain steep and broad based. Decliners outnumber advancing issues by roughly 5-to-1 on the New York Stock Exchange.DJ30 -458.45 NASDAQ -65.80 SP500 -46.86 NASDAQ Adv/Vol/Dec 662/1.94 bln/2073 NYSE Adv/Vol/Dec 537/1.08 bln/2560
3:00 pm : As the broader market flounders, homebuilders (+2.6%) are finding support. Lennar (LEN 8.76, +0.20), DR Horton (DHI 7.25, +0.44), and Pulte Homes (PHM 10.91, +0.25) are all advancing handsomely.
Many homebuilders have outperformed the broader market this year as investors try to pick up on their depressed stock prices. Homebuilders were hit hard as the housing bubble deflated and reduced prospects for the industry. DJ30 -343.44 NASDAQ -48.67 SP500 -36.00 NASDAQ Adv/Vol/Dec 813/1.75 bln/1908 NYSE Adv/Vol/Dec 658/972 mln/2427
2:30 pm : The stock market has pulled up from its session low. However, losses remain steep as few stocks have found support this session.
Yahoo! (YHOO 14.23, -0.31) has been one of the few beneficiaries of buying interest. The company's chief executive, Jerry Yang, indicated that Yahoo remains an attractive strategic fit for Microsoft (MSFT 21.07, -1.01). However, selling the company would require the right price. Shares of YHOO currently trade more than 50% below Microsoft's offer of $33 per share roughly six months ago.
The comments from Yang follow the dissolution of plans to join Internet search business with Google (GOOG 328.45, -13.79). Google walked away from the plan after stating the deal did not fit its core values. DJ30 -417.12 NASDAQ -60.41 SP500 -43.96 NASDAQ Adv/Vol/Dec 679/1.58 bln/2017 NYSE Adv/Vol/Dec 546/877 mln/2531
2:00 pm : After falling roughly 450 points the Dow is making a slight upswing in an attempt to pare losses. It still has a long way to go in order to completely reverse the session's downturn.
Every one of the major economic sectors is trading with a loss of at least 2%. Energy (-5.8%) and industrials (-5.9%) are the session's worst offenders.DJ30 -384.06 NASDAQ -61.73 SP500 -42.44 NASDAQ Adv/Vol/Dec 626/1.43 bln/2054 NYSE Adv/Vol/Dec 501/796 mln/2564
1:30 pm : More than 90% of the stocks in the S&P 500 are trading with losses. Of the 30 Dow components, 27 are in the red; Merck (MRK 28.73, +0.01), Procter & Gamble (PG 64.13, +0.32), and Wal-Mart (WMT 54.23, +0.10) are the only names in the blue chip index making an advance.
The drop in stocks has accelerated buying in Treasuries. The benchmark 10-year Note was down considerably early on, but has since reversed its downturn to trade 3 ticks higher. That has pushed its yield lower to 3.69%. The Note's yield was 3.75% earlier.DJ30 -394.97 NASDAQ -61.28 SP500 -42.97 NASDAQ Adv/Vol/Dec 615/1.31 bln/2035 NYSE Adv/Vol/Dec 512/722 mln/2533
1:00 pm : The Dow and S&P 500 recently extended their respective losses to more than 4%. The session's negative tone has been present from the start.
Foreign indices fell lower Thursday. The Nikkei shed 6.5% and the Hang Seng fell 7.1%. The DAX fell 6.8% and the CAC dropped 6.4%. The FTSE slipped 5.7%.
The European Central Bank cut its target interest rate 50 basis points to 3.25%. The cut in rates, along with the relative safety of U.S. securities, has the dollar moving higher. It is currently up 1.4% against a basket of currencies. DJ30 -336.35 NASDAQ -57.05 SP500 -37.31 NASDAQ Adv/Vol/Dec 601/1.19 bln/2033 NYSE Adv/Vol/Dec 525/650 mln/2501
12:30 pm : Stocks continue their gradual descent, taking out fresh session lows. The Dow Jones Industrial Average is down 350 points.
Small-cap stocks are trading with significant losses, but their downturn is less pronounced than their larger capitalized cousins. The Russell 2000 is currently down 2.8%, following strong selling pressure in the prior session. The Russell 2000 finished 5.7% lower Wednesday.DJ30 -350.93 NASDAQ -58.33 SP500 -38.96 NASDAQ Adv/Vol/Dec 599/1.08 bln/2008 NYSE Adv/Vol/Dec 534/579 mln/2476
12:05 pm : The stock market is extending the prior session's slide as uncertainty continues to govern trading action. Disappointing earnings results and guidance along with extremely weak same-store sales results from a host of retailers have offered little encouragement.
Cisco (CSCO 17.07, -0.32) posted better-than-expected earnings per share results for the latest quarter, but expects a downturn in quarterly revenue. The outlook looms over the technology sector since Cisco is regarded as a tech bellwether.
Media giant News Corp (NWS.A 8.20, -1.59) reported earnings per share results that were below expectations. The stock, in turn, was downgraded to Neutral from Overweight by analysts at JPMorgan.
Retailers have been putting up some truly disappointing same-store sales results for October, reflecting the weak state of the consumer. Nordstrom (JWN 16.42, +0.41), Target (TGT 36.87, +0.88), Macy's (M 10.88, +0.03), Gap (GPS 13.25, +0.41), American Eagle (AEO 10.28, +0.11), and Abercrombie & Fitch (ANF 27.08, +0.30) all reported a drop in sales from stores open at least one year.
Discount retailers and wholesale companies like BJ's Wholesale (BJ 37.26, +1.68) and Wal-Mart (WMT 54.47, +0.34) have shown resilience in the face of economic headwinds. Their business has benefited from cash-strapped shoppers seeking bargain prices.
Elsewhere in corporate news, Yahoo! (YHOO 14.30, +0.38) stated it is a strategic fit for Microsoft (MSFT 21.59, -0.49). The statement came with a qualifier, though, as Yahoo noted it would sell for the right price. Yahoo already walked away from a Microsoft offer to pay Yahoo roughly $33 per share.
Companies fretting over a gloomy economic outlook have them trimming their workforces. Goldman Sachs (GS 85.00, -2.43) and Citigroup (C 12.06, -0.57) announced their cuts are in progress, complementing the initial jobless claims data for the week ended Nov. 1, which totaled 481,000, leaving the four-week moving average steady at 477,000. Though the weekly number was roughly in-line with the consensus estimate, claims are holding at recession-like levels and reflect a weak labor market.
Separately, nonfarm business productivity rose at a 1.1% annual rate in the third quarter. This was generally in-line with expectations. The gain occurred despite a drop in output at a 1.7% annual rate as businesses cut back on hours worked (in part due to fewer employees) at a 2.7% annual rate. The year-over-year increase in productivity of 2.3% is consistent with the long-term trend of about 2%.
Unit labor costs rose at a 3.6% annual rate, but this follows a decline of 0.5% in the second quarter and just a 1.2% rate of gain in the first quarter. The year-over-year increase in unit labor costs is just 2.3%.
Stocks have slid nearly 8.5% over the past two sessions. Selling interest continues to outweigh buying efforts amid the glum announcements and dour data. Gains early in the week have helped limit losses for the week, though. Week-to-date the stock market is off by 5%.DJ30 -280.60 NASDAQ -42.64 SP500 -30.98 NASDAQ Adv/Vol/Dec 727/961 mln/1846 NYSE Adv/Vol/Dec 616/518 mln/2385
11:30 am : The stock market continues its downward trend. Weakness remains broad based as all ten of the major economic sectors are showing losses.
Treasuries are trading lower, too. Their losses come despite falling stock prices, though their levels are improved from earlier. The 10-year Note is down 13 ticks currently.
Crude oil futures are off substantially. Prices are currently down by more than 7% to $60.50 per barrel. Oil's declines during this session and the prior session have it down 11% week-to-date, or 59% off its record high.
With market participants selling and oil on the slide, energy (-5.4%) is the session's weakest performing sector. Integrated players like Exxon Mobil (XOM 70.55, -3.14), Chevron (CVX 71.45, -3.43), and ConocoPhillips (COP 50.15, -3.31) are all laggards. DJ30 -272.79 NASDAQ -44.97 SP500 -30.62 NASDAQ Adv/Vol/Dec 652/806 mln/1863 NYSE Adv/Vol/Dec 595/428 mln/2365
11:05 am : Stocks remain in a funk. The combined impact of the prior session's slump and this session's losses has the stock market facing a week-to-date loss of 4.0%.
Automotive companies are being hit with stiff selling pressure. Shares of Ford (F 1.96, -0.13) and General Motors (GM 5.03, -0.23) are down substantially as investors continue to assess the outlook for the pair after reports of continued sales weakness. Given the uncertain economic picture, many question whether Ford or GM will be able to remain financially healthy. Recent reports indicate the White House has encouraged the automakers to file for loans. DJ30 -193.86 NASDAQ -38.09 SP500 -22.81 NASDAQ Adv/Vol/Dec 722/667 mln/1741 NYSE Adv/Vol/Dec 672/353 mln/2236
10:30 am : Stocks continue to trade lower with the Dow and the S&P 500 falling further to new session lows.
American Express (AXP 26.26, -1.57) had its earnings estimates cut by analysts at Barclays. Though American Express typically caters to well-heeled customers, it has been increasing loss reserves to protect against bad accounts.
Goldman Sachs (GS 86.66, -0.77) also had earnings estimates cut. Analysts at Morgan Stanley lowered their expectations for the firm's current quarter.DJ30 -149.02 NASDAQ -31.61 SP500 -18.93 NASDAQ Adv/Vol/Dec 775/497 mln/1603 NYSE Adv/Vol/Dec 748/258 mln/2106
10:05 am : Stocks quickly turn lower and fall to fresh morning lows.
Gains have been pared in the consumer staples (+0.1%). Amid the selling pressure financials (-0.1%) have been oscillating between a modest gain and a modest loss.
Support for the financial sector is coming from Citigroup (C 12.97, +0.34). Reports indicate the company is beginning to cut more than 9,000 jobs from its work force. The job cuts amount to less than 2.5% of its overall employee base.DJ30 -98.53 NASDAQ -32.21 SP500 -13.83 NASDAQ Adv/Vol/Dec 791/306 mln/1473 NYSE Adv/Vol/Dec 774/159 mln/1929
09:45 am : The major indices opened lower, with broad-based weakness. Stocks are improving their position quickly, though, as several economic sectors make their way into the green.
Notable strength is being exhibited by the consumer staples sector (+0.9%).
On the other hand, the consumer discretionary sector (-0.5%) remains in the red. Despite such weakness, retailers, as a whole, are actually posting a 1.3% advance. Such names as Nordstrom (JWN 16.51, +0.50) and Target (TGT 38.79, +1.04) are trading higher despite dour sales results in October. Nordstrom saw October same-store sales drop nearly 16%, while Target saw sales slide 4.8%.DJ30 -17.13 NASDAQ -14.04 SP500 -4.11 NASDAQ Adv/Dec 914/1233 NYSE Adv/Dec 1004/1590
09:15 am : S&P futures vs fair value: -10.20. Nasdaq futures vs fair value: -25.00. Stocks continue to face negative pressure with just minutes remaining before the session's opening bell. DIRECTV (DTV) posted earnings per share results for its third fiscal quarter that fell shy of the consensus estimate. Utility company PG&E (PCG) also missed the mark.
09:00 am : S&P futures vs fair value: -6.90. Nasdaq futures vs fair value: -19.00. The major indices remain on track for a downward start to the session, according to stock futures. October same-store sales reports from retailers continue to hit the wires. Many are reporting weak results, though select discount retailers and wholesalers are showing relative resilience. Crude oil futures extend the prior session's slide, currently down 1.4% to roughly $64.40 in early trading. Crude eclipsed the $70 mark earlier this week.
08:35 am : S&P futures vs fair value: -11.70. Nasdaq futures vs fair value: -27.50. Stock futures continue to indicate a downbeat tone ahead of the session's opening bell. Analysts at Morgan Stanley slashed their earnings estimate for Goldman Sachs (GS). Persistent uncertainty in financial markets and a clouded economic outlook have resulted in lower earnings expectations for many firms, and has also led to mounting job cuts on Wall Street. Recent reports indicate Goldman Sachs has informed some 3,200 employees, or 10% of its workforce, they will lose their jobs. Meanwhile, Bloomberg.com reported Citigroup (C) has begun notifying some of the 9,100 employees, or 2.6% of its workforce, whose jobs will be eliminated. The announcements coincide with continued government reports indicating a relatively weak labor market. Jobless claims for the week ending November 1 totaled 481,000, marking a 4,000 decrease from the prior week's upwardly revised claims number. The latest figures exceeded the 477,000 claims that were widely expected. Continuing claims through October 25 totaled 3.84 million, which is up from the 3.72 million continuing claims reported through the prior week. 3.74 million continuing claims were expected in the latest report. In other economic news, preliminary third quarter nonfarm productivity was up 1.1%, exceeding the 0.7% increase that was widely expected. Nonfarm productivity increased at a 3.6% rate in the prior report. Meanwhile, a preliminary reading of unit labor costs indicated a 3.6% increase, which is more than the 3.0% increase that was widely expected. Unit labor costs contracted by 0.1% for the prior reading.
08:00 am : S&P futures vs fair value: -13.40. Nasdaq futures vs fair value: -35.00. Stock futures indicate a downbeat tone to premarket trading. Cisco (CSCO) and Spectra Energy (SE) posted better-than-expected earnings per share results for the latest quarter. Williams Companies (WMB) missed the consensus EPS estimate. Media giant Newscorp (NWS.A) also reported earnings per share results that were below expectations, but had its shares downgraded to Neutral from Overweight by analysts at JPMorgan. Wal-Mart (WMT) continues to attract bargain hunters; the discount retail giant reported October same-store sales growth of 2.4%. It expects November same-store sales to grow between 1% and 3%. According to Reuters, chief executive for Yahoo! (YHOO), Jerry Yang, stated a deal between his company and Microsoft (MSFT) remains the best strategic option for Yahoo. Separately, England's central bank cut its benchmark lending rate to 3.0% from 4.5%, and the European Central Bank cut its target rate to 3.25% from 3.75%.
06:27 am : S&P futures vs fair value: -23.60. Nasdaq futures vs fair value: -37.50.
06:27 am : Nikkei...8899.14...-622.10...-6.50%. Hang Seng...13790.04...-1050.10...-7.10%.
06:27 am : FTSE...4335.92...-194.80...-4.30%. DAX...4942.32...-224.50...-4.40%.
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