AI
Monday, November 10, 2008 6:54:49 PM
Market Update 081110
http://biz.yahoo.com/mu/update.html
4:20 pm : Stocks fell Monday as concerns regarding financial and automaker companies overshadowed news of a massive Chinese fiscal stimulus and a restructuring of AIG's (AIG 2.28, +0.17) government bailout.
The S&P 500 opened 2.3% higher as overseas markets rallied on the Chinese fiscal stimulus plan, but gave up those gains as the financial sector faltered. In the end, the S&P 500 fell 1.3% in below average volume with eight of the ten economic sectors posting a loss.
China will spend $586 billion, equal to a 18% of its GDP, in a plan to support its domestic economy and restore global economic health. The two-year package will target a broad range of industries, including housing, infrastructure and health care.
In corporate news, AIG rose 8% on word its bailout from the U.S. government has been amended, including an expansion in aid to $150 billion from $123 billion and better loan terms. The move is meant to give AIG more time to sell assets after losing $24.5 billion in the third quarter, and stands to reassure investors that the insurance giant will be able to satisfy its counterparty obligations.
Despite the strength in AIG, the financial sector dropped 4.4%, with notable weakness in Goldman Sachs (GS 70.94, -6.87). Goldman had its fourth quarter earnings estimate cut to a loss of $2.50 per share from a profit of $2.71 at Barclays. Barclays cited dramatic equity market declines. On average, analysts expect Goldman to post fourth quarter earnings of $1.46 per share.
General Motors (GM 3.29, -1.07) tumbled to its lowest level in six decades after it was downgraded to Sell from Hold and had its price target cut to $0 from $4 at Deutsche Bank. GM may not be able to fund its U.S. operations beyond December without government intervention, Deutsche Bank said. Ford (F 1.94, -0.08) fell 4%.
The financial market turmoil and slowdown in consumer spending is taking a toll on retailers (-2.0%). Circuit City (CC 0.11, -0.14) filed for Chapter 11 bankruptcy protection due to stiff competition and financial market disruptions that limited the retailer's access to credit.
UPS (UPS 53.66, +1.74) and FedEx (FDX 66.27, +1.69) gained on news that they will have less competition in the U.S. starting early next year. DHL U.S. Express said it will discontinue domestic-only air and ground services to only focus on international offerings. The shipping company, owned by Germany-based Deutsche Post World Net, will cut 9,500 U.S. jobs, on top of the 5,400 jobs it has already eliminated.
On a positive note, McDonald's (MCD 56.58, +1.11) continues to benefit from its relatively low price offerings. The company said October U.S. same-store sales increased by 5.4% and global same-store sales rose by 8.2%. U.S. sales, which accounted for 35% of McDonald's 2007 revenue, were aided by the popularity of the Monopoly game.
In commodity trading, oil surged as high as 7.4% and gold gained as much as 4.7% as traders speculated that the Chinese stimulus plan would spark increased demand. Commodities (+1.7%) gave up much of those gains by the end of the session, however, with oil settling up 1.9% to $62.22 per barrel and gold advancing 1.6% to $746.10.DJ30 -73.27 NASDAQ -30.66 NQ100 -1.6% R2K -2.5% SP400 -2.5% SP500 -11.78 NASDAQ Adv/Vol/Dec 745/1.71 bln/1954 NYSE Adv/Vol/Dec 991/1.14 bln/2095
3:30 pm : Stocks trade near or at session lows going into the final half-hour of the trading session.
Looking ahead, tomorrow is Veterans Day, so SIFMA is recommending that the bond market closes. The stock market will be open normal hours. There are no reports on the economic calender. There are 32 companies confirmed to report their quarterly results after the close this session, including Starbucks (SBUX 10.07, -0.48). Tomorrow before the open, 10 companies are confirmed to report, including TJX Cos (TJX 23.55, -0.64).DJ30 -146.07 NASDAQ -39.82 SP500 -20.21 NASDAQ Adv/Vol/Dec 686/1.36 bln/1995 NYSE Adv/Vol/Dec 810/819 mln/2278
3:00 pm : A wave of selling interest sinks stocks to fresh session lows.
All ten of the sectors post a loss. Financials (-5.2%), utilities (-4.3%), consumer discretionary (-3.7%), and tech (-3.1%) are seeing the most selling interest.DJ30 -164.07 NASDAQ -42.66 SP500 -21.57 NASDAQ Adv/Vol/Dec 764/1.22 bln/1902 NYSE Adv/Vol/Dec 881/727 mln/2185
2:30 pm : Stocks are down slightly more than 1% as the financial sector (-4.1%) trades near its session low.
Google (GOOG 311.63, -19.51) is down 5.9%, trading near its multi-year low of $309.44. The tech sector as a whole is down 1.8%.
In commodity trading, oil prices have traded in a volatile fashion, rebounding to a gain of more than 5% before retreating to its current level, up 2.0% at $62.26 per barrel.DJ30 -61.41 NASDAQ -25.89 SP500 -11.26 NASDAQ Adv/Vol/Dec 826/1.10 bln/1822 NYSE Adv/Vol/Dec 1018/663 mln/2034
2:05 pm : Stocks remain in negative territory.
Energy stocks (+0.6%) are outperforming as crude prices rebound to a gain of 2.6% at $62.65 per barrel.
Within the energy sector, 27 of the 40 components are posting a gain. Apache (APA 80.03, +3.04) and Devon Energy (DVN 78.14, +2.03) are providing leadership.DJ30 -32.65 NASDAQ -18.19 SP500 -7.37 NASDAQ Adv/Vol/Dec 896/1.02 bln/1741 NYSE Adv/Vol/Dec 1090/614 mln/1930
1:30 pm : Selling pressure eases as the major indices trade modestly above session lows. The S&P 500 is up 9.4% from its multi-year low reached on Oct. 10, but is still down 37% this year.
Merrill Lynch (MER 15.79, -0.61) has closed its stand-alone proprietary trading business, according to Dow Jones.DJ30 -82.30 NASDAQ -24.31 SP500 -10.23 NASDAQ Adv/Vol/Dec 820/924 mln/1798 NYSE Adv/Vol/Dec 987/558 mln/2032
1:05 pm : Stocks extend their declines. The only sector that remains in positive territory is telecom (+0.1%).
Within the S&P 500, 397 stocks are posting a decline. The S&P 500 is down nearly 2%.
As stocks falter, Treasuries pick up some buying interest. The 10-year note is up nine ticks and the 30-year bond is up a full point.DJ30 -109.75 NASDAQ -31.61 SP500 -16.59 NASDAQ Adv/Vol/Dec 811/848 mln/1780 NYSE Adv/Vol/Dec 899/511 mln/2105
12:30 pm : The major indices extend their losses amid broad-based selling pressure. Financial (-3.6%), utility (-2.7%) and consumer discretionary (-2.4%) stocks are posting the largest declines.
Market breadth is negative. Decliners outpace advancers by 5-to-3 on the NYSE and by 8-to-5 on the Nasdaq.DJ30 -58.70 NASDAQ -20.49 SP500 -10.13 NASDAQ Adv/Vol/Dec 983/749 mln/1576 NYSE Adv/Vol/Dec 1107/456 mln/1861
12:00 pm : Stocks opened with strong gains following news that China is introducing a nearly $600 billion fiscal stimulus and that AIG (AIG 2.43, +0.32) will get added government support. However, gains fizzled by midday as concerns regarding financial stocks and automakers weighed on sentiment.
At midday, the S&P 500 is down 0.6%, retreating from an early gain of 2.3%. Five of the ten economic sectors are in negative territory.
China will spend $586 billion, equal to a fifth of its GDP, in a plan to support its domestic economy and restore global economic support. The two-year package will target a broad range of industries, including housing, infrastructure and health care.
In corporate news, AIG is up 15% on news its bailout from the U.S. government has been amended, including an expansion to $150 billion in aid from $123 billion and better loan terms. The move is meant to give AIG more time to sell assets after losing $24.5 billion in the third quarter. Despite the strength in AIG, the financial sector is a laggard with a 2.8% decline, with notable weakness in Goldman Sachs (GS 70.50, -7.28).
Goldman had its fourth quarter earnings estimate cut to a loss of $2.50 per share from a profit of $2.71 at Barclays. Barclays cited dramatic equity market declines. On average, analysts expect Goldman to post a fourth quarter loss of $1.09 per share.
General Motors (GM 3.29, -1.07) tumbled to its lowest level in decades after it was downgraded to Sell from Hold and had its price target cut to $0 from $4 at Deutsche Bank. GM may not be able to fund its U.S. operations beyond December without government intervention, Deutsche Bank said.
Circuit City (CC 0.11, -0.14) filed for Chapter 11 bankruptcy protection due to stiff competition and financial market disruptions that limited the retailer's access to credit. Retailers are down 1.5% this session. The bankruptcy filing does not come as a surprise, as Circuit City's stock price had plummeted 97% from its 52-week high to just $0.25 at Friday's closing level.
Transports (+0.9%) are a pocket of strength. UPS (UPS 53.89, +1.97) and FedEx (FDX 66.30, +1.72) are gaining after DHL U.S. Express said it will only focus on international offerings and will discontinue domestic-only air and ground services. The shipping company, owned by Germany-based Deutsche Post World Net, will cut 9,500 U.S. jobs, on top of the 5,400 jobs it has already eliminated.
On a positive note, McDonald's (MCD 56.75, +1.28) continues to benefit from its low price offerings. The company said October U.S. same-store sales increased by 5.4% and global same-store sales rose by 8.2%. U.S. sales, which accounted for 35% of McDonald's 2007 revenue, were aided by the popularity of the Monopoly game.
In commodity trading, oil surged as high as 7.4% and gold gained as much as 4.7% as traders speculated that the Chinese stimulus plan would spark increased demand. By midday, however, much of that optimism has faded. Oil is down 0.7% to $60.63 per barrel and gold is up only 1.7% to $747 per ounce.DJ30 -11.47 NASDAQ -15.08 SP500 -5.53 NASDAQ Adv/Vol/Dec 1082/664 mln/1446 NYSE Adv/Vol/Dec 1236/413 mln/1718
11:30 am : The S&P 500 falls to the unchanged mark and then recovers a bit.
The White House is willing to listen to any new congressional proposals regarding automakers, according to a White House spokeswoman, Reuters reports. General Motors (GM 3.38, -0.98) and Ford (F -1.96, -0.6) are under selling pressure this session.DJ30 +74.87 NASDAQ +1.22 SP500 +4.34 NASDAQ Adv/Vol/Dec 1229/545 mln/1282 NYSE Adv/Vol/Dec 1511/352 mln/1416
11:00 am : Stocks fall to session lows. The S&P 500 is up only 0.2% after trading with a gain of as much as 2.3%. The Nasdaq is near the unchanged mark with a slight loss.
Three of the ten sectors are now posting a loss -- financials (-1.9%), utilities (-0.9%) and consumer discretionary (-0.8%).
Goldman Sachs (GS 71.71, -6.00) is down 7.7%. CNBC's David Faber said there are a number of rumors out on the stock. One rumor, Faber said, is that Goldman may do some sort of secondary offering, but he is hearing that is not true. Goldman Sachs is not the only reason for weakness within financials as 58 of the 83 stocks within the sector are posting a loss.
At the same time, commodities give up some gains. Oil is up only 1.0% after being up as much as 7.4%. Gold is up 2.5% after being up as much as 4.7%.DJ30 +40.46 NASDAQ -0.23 SP500 +1.27 NASDAQ Adv/Vol/Dec 1232/489 mln/1208 NYSE Adv/Vol/Dec 1501/303 mln/1383
10:35 am : Stocks trade in the green, with the Nasdaq underperforming on a relative basis.
Shares of Google (GOOG 318.03, -13.11) are acting as a drag on the Nasdaq. Google had its earnings estimates lowered at Barclays, citing further macro weakness.
Goldman Sachs (GS 72.64, -5.14) is showing weakness after having its fourth quarter earnings estimates cut to a loss of $2.50 per share from a profit of $2.71 at Barclays. Barclays cited dramatic equity market declines. The financial sector is down 0.5%. GS has hit a fresh multi-year low.
Shares of General Motors (GM 3.27 -1.09) have fallen to a fresh multi-decade low. Deutsche Bank downgraded GM to Sell from Hold and cut its price target to $0 from $4, noting without government intervention, GM may not be able to fund its U.S. operations beyond December. DJ30 +129.11 NASDAQ +8.71 SP500 +9.98 NASDAQ Adv/Vol/Dec 1403/337 mln/970 NYSE Adv/Vol/Dec 1860/233 mln/979
10:00 am : Stocks sport solid gains, but are off opening highs. Energy stocks (+3.1%) are outperforming thanks to the gains in crude prices (+4.7%).
In corporate news this morning, Circuit City (CC 0.11, -0.14) filed for Chapter 11 bankruptcy protection due to stiff competition and financial market disruptions that limited the retailer's access to credit.
Beginning January 30, 2009, DHL U.S. Express will only focus on international offerings and will discontinue domestic-only air and ground services. The shipping company, owned by Germany-based Deutsche Post World Net, will cut 9,500 U.S. jobs, on top of the 5,400 jobs it has already eliminated. DHL U.S. Express will retain 3,000 to 4,000 employees. World-wide DHL has some 300,000 employees.
On a positive note, McDonald's (MCD 56.87, +1.40) continues to benefit from its low price offerings. The company said October U.S. same-store sales increased by 5.4% and global same-store sales rose by 8.2%. U.S. sales, which accounted for 35% of McDonald's 2007 revenue, were aided by the popularity of the Monopoly game.DJ30 +139.79 NASDAQ +14.95 SP500 +12.65 NASDAQ Adv/Vol/Dec 1603/182 mln/637 NYSE Adv/Vol/Dec 2001/140 mln/710
09:40 am : The stock market opens on a strong note, benefiting from news that China is going to use $586 billion for a fiscal stimulus package through the end of 2010.
The Chinese stimulus plan gave a boost to world markets (+2.6%) and commodities, with oil rallying 6.1% to $64.80 per barrel and gold up 4.0% to $763.60 per ounce.
Meanwhile, AIG (AIG 2.67, +0.56) is up 27% on news its bailout from the U.S. government has been amended, including an expansion to $150 billion in aid from $123 billion and better loan terms. The move is meant to give AIG more time to sell assets after losing $24.5 billion in the third quarter.DJ30 +179.53 NASDAQ +24.81 SP500 +17.59
09:18 am : S&P futures vs fair value: +19.10. Nasdaq futures vs fair value: +27.50. Stock futures suggest a higher start, but are giving up gains. At session highs, S&P 500 futures were 32.3 points above fair value and Nasdaq 100 futures were 47.0 points above fair value.
09:03 am : S&P futures vs fair value: +21.40. Nasdaq futures vs fair value: +32.50. A higher start is expected. Fannie Mae (FNM) reported a third quarter loss of $13.00 per share, or $29 billion, which may not be comparable to the First Call consensus estimate that called for a loss of $1.60. Ford Motor (F) had it price target cut to $1 from $4 at Credit Suisse, citing Ford's worse-than-expected third quarter results. Earlier, Deutsche Bank downgraded General Motors (GM) to Sell from Hold and cut its price target to $0 from $4, noting without government intervention, GM may not be able to fund its U.S. operations beyond December. Separately, Deutsche Post AG plans to close all of its DHL Express service centers, cut 9,500 jobs in the U.S. and discontinue U.S.-only domestic land and air shipping, the AP reported.
08:31 am : S&P futures vs fair value: +24.30. Nasdaq futures vs fair value: +36.00. Futures are off their best levels of the morning, but still suggest a sharply higher open. Crude prices are up 7.0% to $61.04 per barrel, aided by news of China's fiscal stimulus plan.
08:10 am : S&P futures vs fair value: +26.20. Nasdaq futures vs fair value: +38.30. Futures point to a sharply higher open after China announced a $586 billion fiscal stimulus and the U.S. government replaced its $123 billion aid to AIG (AIG) with a larger $150 billion package. AIG also reported a third quarter loss of $3.42 per share, which was worse than the expected loss of $0.90 per share. McDonald's (MCD) continues to post solid results, with October same-store U.S. sales climbing 5.3% and global same-store sales increasing by 8.2%. Retailer Circuit City (CC) filed for Chapter 11 bankruptcy.
06:49 am : S&P futures vs fair value: +6.20. Nasdaq futures vs fair value: +14.50.
06:46 am : Nikkei...9081.43...+498.40...+5.80%. Hang Seng...14744.63...+501.20...+3.50%.
06:46 am : FTSE...4501.51...+136.60...+3.10%. DAX...5110.24...+171.80...+3.50%.
http://biz.yahoo.com/mu/update.html
4:20 pm : Stocks fell Monday as concerns regarding financial and automaker companies overshadowed news of a massive Chinese fiscal stimulus and a restructuring of AIG's (AIG 2.28, +0.17) government bailout.
The S&P 500 opened 2.3% higher as overseas markets rallied on the Chinese fiscal stimulus plan, but gave up those gains as the financial sector faltered. In the end, the S&P 500 fell 1.3% in below average volume with eight of the ten economic sectors posting a loss.
China will spend $586 billion, equal to a 18% of its GDP, in a plan to support its domestic economy and restore global economic health. The two-year package will target a broad range of industries, including housing, infrastructure and health care.
In corporate news, AIG rose 8% on word its bailout from the U.S. government has been amended, including an expansion in aid to $150 billion from $123 billion and better loan terms. The move is meant to give AIG more time to sell assets after losing $24.5 billion in the third quarter, and stands to reassure investors that the insurance giant will be able to satisfy its counterparty obligations.
Despite the strength in AIG, the financial sector dropped 4.4%, with notable weakness in Goldman Sachs (GS 70.94, -6.87). Goldman had its fourth quarter earnings estimate cut to a loss of $2.50 per share from a profit of $2.71 at Barclays. Barclays cited dramatic equity market declines. On average, analysts expect Goldman to post fourth quarter earnings of $1.46 per share.
General Motors (GM 3.29, -1.07) tumbled to its lowest level in six decades after it was downgraded to Sell from Hold and had its price target cut to $0 from $4 at Deutsche Bank. GM may not be able to fund its U.S. operations beyond December without government intervention, Deutsche Bank said. Ford (F 1.94, -0.08) fell 4%.
The financial market turmoil and slowdown in consumer spending is taking a toll on retailers (-2.0%). Circuit City (CC 0.11, -0.14) filed for Chapter 11 bankruptcy protection due to stiff competition and financial market disruptions that limited the retailer's access to credit.
UPS (UPS 53.66, +1.74) and FedEx (FDX 66.27, +1.69) gained on news that they will have less competition in the U.S. starting early next year. DHL U.S. Express said it will discontinue domestic-only air and ground services to only focus on international offerings. The shipping company, owned by Germany-based Deutsche Post World Net, will cut 9,500 U.S. jobs, on top of the 5,400 jobs it has already eliminated.
On a positive note, McDonald's (MCD 56.58, +1.11) continues to benefit from its relatively low price offerings. The company said October U.S. same-store sales increased by 5.4% and global same-store sales rose by 8.2%. U.S. sales, which accounted for 35% of McDonald's 2007 revenue, were aided by the popularity of the Monopoly game.
In commodity trading, oil surged as high as 7.4% and gold gained as much as 4.7% as traders speculated that the Chinese stimulus plan would spark increased demand. Commodities (+1.7%) gave up much of those gains by the end of the session, however, with oil settling up 1.9% to $62.22 per barrel and gold advancing 1.6% to $746.10.DJ30 -73.27 NASDAQ -30.66 NQ100 -1.6% R2K -2.5% SP400 -2.5% SP500 -11.78 NASDAQ Adv/Vol/Dec 745/1.71 bln/1954 NYSE Adv/Vol/Dec 991/1.14 bln/2095
3:30 pm : Stocks trade near or at session lows going into the final half-hour of the trading session.
Looking ahead, tomorrow is Veterans Day, so SIFMA is recommending that the bond market closes. The stock market will be open normal hours. There are no reports on the economic calender. There are 32 companies confirmed to report their quarterly results after the close this session, including Starbucks (SBUX 10.07, -0.48). Tomorrow before the open, 10 companies are confirmed to report, including TJX Cos (TJX 23.55, -0.64).DJ30 -146.07 NASDAQ -39.82 SP500 -20.21 NASDAQ Adv/Vol/Dec 686/1.36 bln/1995 NYSE Adv/Vol/Dec 810/819 mln/2278
3:00 pm : A wave of selling interest sinks stocks to fresh session lows.
All ten of the sectors post a loss. Financials (-5.2%), utilities (-4.3%), consumer discretionary (-3.7%), and tech (-3.1%) are seeing the most selling interest.DJ30 -164.07 NASDAQ -42.66 SP500 -21.57 NASDAQ Adv/Vol/Dec 764/1.22 bln/1902 NYSE Adv/Vol/Dec 881/727 mln/2185
2:30 pm : Stocks are down slightly more than 1% as the financial sector (-4.1%) trades near its session low.
Google (GOOG 311.63, -19.51) is down 5.9%, trading near its multi-year low of $309.44. The tech sector as a whole is down 1.8%.
In commodity trading, oil prices have traded in a volatile fashion, rebounding to a gain of more than 5% before retreating to its current level, up 2.0% at $62.26 per barrel.DJ30 -61.41 NASDAQ -25.89 SP500 -11.26 NASDAQ Adv/Vol/Dec 826/1.10 bln/1822 NYSE Adv/Vol/Dec 1018/663 mln/2034
2:05 pm : Stocks remain in negative territory.
Energy stocks (+0.6%) are outperforming as crude prices rebound to a gain of 2.6% at $62.65 per barrel.
Within the energy sector, 27 of the 40 components are posting a gain. Apache (APA 80.03, +3.04) and Devon Energy (DVN 78.14, +2.03) are providing leadership.DJ30 -32.65 NASDAQ -18.19 SP500 -7.37 NASDAQ Adv/Vol/Dec 896/1.02 bln/1741 NYSE Adv/Vol/Dec 1090/614 mln/1930
1:30 pm : Selling pressure eases as the major indices trade modestly above session lows. The S&P 500 is up 9.4% from its multi-year low reached on Oct. 10, but is still down 37% this year.
Merrill Lynch (MER 15.79, -0.61) has closed its stand-alone proprietary trading business, according to Dow Jones.DJ30 -82.30 NASDAQ -24.31 SP500 -10.23 NASDAQ Adv/Vol/Dec 820/924 mln/1798 NYSE Adv/Vol/Dec 987/558 mln/2032
1:05 pm : Stocks extend their declines. The only sector that remains in positive territory is telecom (+0.1%).
Within the S&P 500, 397 stocks are posting a decline. The S&P 500 is down nearly 2%.
As stocks falter, Treasuries pick up some buying interest. The 10-year note is up nine ticks and the 30-year bond is up a full point.DJ30 -109.75 NASDAQ -31.61 SP500 -16.59 NASDAQ Adv/Vol/Dec 811/848 mln/1780 NYSE Adv/Vol/Dec 899/511 mln/2105
12:30 pm : The major indices extend their losses amid broad-based selling pressure. Financial (-3.6%), utility (-2.7%) and consumer discretionary (-2.4%) stocks are posting the largest declines.
Market breadth is negative. Decliners outpace advancers by 5-to-3 on the NYSE and by 8-to-5 on the Nasdaq.DJ30 -58.70 NASDAQ -20.49 SP500 -10.13 NASDAQ Adv/Vol/Dec 983/749 mln/1576 NYSE Adv/Vol/Dec 1107/456 mln/1861
12:00 pm : Stocks opened with strong gains following news that China is introducing a nearly $600 billion fiscal stimulus and that AIG (AIG 2.43, +0.32) will get added government support. However, gains fizzled by midday as concerns regarding financial stocks and automakers weighed on sentiment.
At midday, the S&P 500 is down 0.6%, retreating from an early gain of 2.3%. Five of the ten economic sectors are in negative territory.
China will spend $586 billion, equal to a fifth of its GDP, in a plan to support its domestic economy and restore global economic support. The two-year package will target a broad range of industries, including housing, infrastructure and health care.
In corporate news, AIG is up 15% on news its bailout from the U.S. government has been amended, including an expansion to $150 billion in aid from $123 billion and better loan terms. The move is meant to give AIG more time to sell assets after losing $24.5 billion in the third quarter. Despite the strength in AIG, the financial sector is a laggard with a 2.8% decline, with notable weakness in Goldman Sachs (GS 70.50, -7.28).
Goldman had its fourth quarter earnings estimate cut to a loss of $2.50 per share from a profit of $2.71 at Barclays. Barclays cited dramatic equity market declines. On average, analysts expect Goldman to post a fourth quarter loss of $1.09 per share.
General Motors (GM 3.29, -1.07) tumbled to its lowest level in decades after it was downgraded to Sell from Hold and had its price target cut to $0 from $4 at Deutsche Bank. GM may not be able to fund its U.S. operations beyond December without government intervention, Deutsche Bank said.
Circuit City (CC 0.11, -0.14) filed for Chapter 11 bankruptcy protection due to stiff competition and financial market disruptions that limited the retailer's access to credit. Retailers are down 1.5% this session. The bankruptcy filing does not come as a surprise, as Circuit City's stock price had plummeted 97% from its 52-week high to just $0.25 at Friday's closing level.
Transports (+0.9%) are a pocket of strength. UPS (UPS 53.89, +1.97) and FedEx (FDX 66.30, +1.72) are gaining after DHL U.S. Express said it will only focus on international offerings and will discontinue domestic-only air and ground services. The shipping company, owned by Germany-based Deutsche Post World Net, will cut 9,500 U.S. jobs, on top of the 5,400 jobs it has already eliminated.
On a positive note, McDonald's (MCD 56.75, +1.28) continues to benefit from its low price offerings. The company said October U.S. same-store sales increased by 5.4% and global same-store sales rose by 8.2%. U.S. sales, which accounted for 35% of McDonald's 2007 revenue, were aided by the popularity of the Monopoly game.
In commodity trading, oil surged as high as 7.4% and gold gained as much as 4.7% as traders speculated that the Chinese stimulus plan would spark increased demand. By midday, however, much of that optimism has faded. Oil is down 0.7% to $60.63 per barrel and gold is up only 1.7% to $747 per ounce.DJ30 -11.47 NASDAQ -15.08 SP500 -5.53 NASDAQ Adv/Vol/Dec 1082/664 mln/1446 NYSE Adv/Vol/Dec 1236/413 mln/1718
11:30 am : The S&P 500 falls to the unchanged mark and then recovers a bit.
The White House is willing to listen to any new congressional proposals regarding automakers, according to a White House spokeswoman, Reuters reports. General Motors (GM 3.38, -0.98) and Ford (F -1.96, -0.6) are under selling pressure this session.DJ30 +74.87 NASDAQ +1.22 SP500 +4.34 NASDAQ Adv/Vol/Dec 1229/545 mln/1282 NYSE Adv/Vol/Dec 1511/352 mln/1416
11:00 am : Stocks fall to session lows. The S&P 500 is up only 0.2% after trading with a gain of as much as 2.3%. The Nasdaq is near the unchanged mark with a slight loss.
Three of the ten sectors are now posting a loss -- financials (-1.9%), utilities (-0.9%) and consumer discretionary (-0.8%).
Goldman Sachs (GS 71.71, -6.00) is down 7.7%. CNBC's David Faber said there are a number of rumors out on the stock. One rumor, Faber said, is that Goldman may do some sort of secondary offering, but he is hearing that is not true. Goldman Sachs is not the only reason for weakness within financials as 58 of the 83 stocks within the sector are posting a loss.
At the same time, commodities give up some gains. Oil is up only 1.0% after being up as much as 7.4%. Gold is up 2.5% after being up as much as 4.7%.DJ30 +40.46 NASDAQ -0.23 SP500 +1.27 NASDAQ Adv/Vol/Dec 1232/489 mln/1208 NYSE Adv/Vol/Dec 1501/303 mln/1383
10:35 am : Stocks trade in the green, with the Nasdaq underperforming on a relative basis.
Shares of Google (GOOG 318.03, -13.11) are acting as a drag on the Nasdaq. Google had its earnings estimates lowered at Barclays, citing further macro weakness.
Goldman Sachs (GS 72.64, -5.14) is showing weakness after having its fourth quarter earnings estimates cut to a loss of $2.50 per share from a profit of $2.71 at Barclays. Barclays cited dramatic equity market declines. The financial sector is down 0.5%. GS has hit a fresh multi-year low.
Shares of General Motors (GM 3.27 -1.09) have fallen to a fresh multi-decade low. Deutsche Bank downgraded GM to Sell from Hold and cut its price target to $0 from $4, noting without government intervention, GM may not be able to fund its U.S. operations beyond December. DJ30 +129.11 NASDAQ +8.71 SP500 +9.98 NASDAQ Adv/Vol/Dec 1403/337 mln/970 NYSE Adv/Vol/Dec 1860/233 mln/979
10:00 am : Stocks sport solid gains, but are off opening highs. Energy stocks (+3.1%) are outperforming thanks to the gains in crude prices (+4.7%).
In corporate news this morning, Circuit City (CC 0.11, -0.14) filed for Chapter 11 bankruptcy protection due to stiff competition and financial market disruptions that limited the retailer's access to credit.
Beginning January 30, 2009, DHL U.S. Express will only focus on international offerings and will discontinue domestic-only air and ground services. The shipping company, owned by Germany-based Deutsche Post World Net, will cut 9,500 U.S. jobs, on top of the 5,400 jobs it has already eliminated. DHL U.S. Express will retain 3,000 to 4,000 employees. World-wide DHL has some 300,000 employees.
On a positive note, McDonald's (MCD 56.87, +1.40) continues to benefit from its low price offerings. The company said October U.S. same-store sales increased by 5.4% and global same-store sales rose by 8.2%. U.S. sales, which accounted for 35% of McDonald's 2007 revenue, were aided by the popularity of the Monopoly game.DJ30 +139.79 NASDAQ +14.95 SP500 +12.65 NASDAQ Adv/Vol/Dec 1603/182 mln/637 NYSE Adv/Vol/Dec 2001/140 mln/710
09:40 am : The stock market opens on a strong note, benefiting from news that China is going to use $586 billion for a fiscal stimulus package through the end of 2010.
The Chinese stimulus plan gave a boost to world markets (+2.6%) and commodities, with oil rallying 6.1% to $64.80 per barrel and gold up 4.0% to $763.60 per ounce.
Meanwhile, AIG (AIG 2.67, +0.56) is up 27% on news its bailout from the U.S. government has been amended, including an expansion to $150 billion in aid from $123 billion and better loan terms. The move is meant to give AIG more time to sell assets after losing $24.5 billion in the third quarter.DJ30 +179.53 NASDAQ +24.81 SP500 +17.59
09:18 am : S&P futures vs fair value: +19.10. Nasdaq futures vs fair value: +27.50. Stock futures suggest a higher start, but are giving up gains. At session highs, S&P 500 futures were 32.3 points above fair value and Nasdaq 100 futures were 47.0 points above fair value.
09:03 am : S&P futures vs fair value: +21.40. Nasdaq futures vs fair value: +32.50. A higher start is expected. Fannie Mae (FNM) reported a third quarter loss of $13.00 per share, or $29 billion, which may not be comparable to the First Call consensus estimate that called for a loss of $1.60. Ford Motor (F) had it price target cut to $1 from $4 at Credit Suisse, citing Ford's worse-than-expected third quarter results. Earlier, Deutsche Bank downgraded General Motors (GM) to Sell from Hold and cut its price target to $0 from $4, noting without government intervention, GM may not be able to fund its U.S. operations beyond December. Separately, Deutsche Post AG plans to close all of its DHL Express service centers, cut 9,500 jobs in the U.S. and discontinue U.S.-only domestic land and air shipping, the AP reported.
08:31 am : S&P futures vs fair value: +24.30. Nasdaq futures vs fair value: +36.00. Futures are off their best levels of the morning, but still suggest a sharply higher open. Crude prices are up 7.0% to $61.04 per barrel, aided by news of China's fiscal stimulus plan.
08:10 am : S&P futures vs fair value: +26.20. Nasdaq futures vs fair value: +38.30. Futures point to a sharply higher open after China announced a $586 billion fiscal stimulus and the U.S. government replaced its $123 billion aid to AIG (AIG) with a larger $150 billion package. AIG also reported a third quarter loss of $3.42 per share, which was worse than the expected loss of $0.90 per share. McDonald's (MCD) continues to post solid results, with October same-store U.S. sales climbing 5.3% and global same-store sales increasing by 8.2%. Retailer Circuit City (CC) filed for Chapter 11 bankruptcy.
06:49 am : S&P futures vs fair value: +6.20. Nasdaq futures vs fair value: +14.50.
06:46 am : Nikkei...9081.43...+498.40...+5.80%. Hang Seng...14744.63...+501.20...+3.50%.
06:46 am : FTSE...4501.51...+136.60...+3.10%. DAX...5110.24...+171.80...+3.50%.
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