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Market Update 110126
4:20 pm : Stocks finished the session with modest gains, but the Dow failed to hold the 12,000 level, and the S&P never reached 1300. The FOMC interest rate decision and statement was pretty much a non-event. The lone question of how many dissenters there would be on the statement was answered when none of the members voted against the decision.

The major market averages opened mixed, but were soon solidly in positive territory after the better-than-expected New home sales data. New home sales for December increased 17.5% month-over-month to an annualized rate of 329,000 units, a bit above the rate of 300,000 units that had been expected, on average, among economists polled by Briefing.com. Nonetheless, the 17.5% increase comes following the 5.5% gain that occurred in November.

Energy shares were the leaders all session long as the S&P 500 Energy Index closed higher by 2.1%. Halliburton (HAL 43.40, +3.20) and Baker Hughes (BHI 65.99, +3.67) led the advance as 39 of 41 stocks in the index finished higher. Occidental Petroleum (OXY 96.94, -0.21) lagged following the company's mixed earnings report. The company topped EPS expectations by $0.03 per chare, but missed on revenues.

Two IPOs began trading today, and both ended the day with solid gains. Nielsen (NLSN 25.00, +2.00) priced its 71.4 million share IPO at $23, above the $20-22 expected range, while Demand Media (DMD 22.61, +5.61) priced an 8.9 million share IPO at $17, vs. expectations for 7.5 million shares at $14-16.

Shares of Boeing (BA 70.02, -2.22) were under pressure following the company's weaker-than-expected full year 2011 forecast. The company guided earnings of $3.80-$4.00 per share, which is weaker than the consensus estimate of $4.55 per share. The company announced earnings of $1.56 per share (which may not compare) versus the Thomson Reuters consensus of $1.12. Revenues came in soft at $16.55 billion versus the consensus estimate of $17.02 billion. Shares of competitors Lockheed Martin (LMT 78.39, -0.68) and Northrop Grumman (NOC 68.81, -0.70) were weaker on the results.

Shares of Netflix (NFLX 183.03, -3.71) closed lower ahead of the company's Q4 earnings after the closing bell. The Thomson Reuters consensus is calling for earnings per share of $0.71 and revenues of $597.49 million. Analysts will be focusing on subscriber growth, which arguably the most important metric. The company has previously guided for Q4 total subscriptions to be in the range of 19.0-19.7 million.

Treasuries ended the day near their worst levels of the session despite a solid $35 billion 5-yr note auction. The results of the auction caused yields to ease off their highest levels of the session, but buying was short-lived as sellers piled on ahead of the FOMC interest rate decision. After some initial buying following the release of the statement, the selling pressure was too great, and yields moved to their highest levels of the day. The 10-yr ended the day higher by nine basis points at 3.419%. The yield curve ended the day steeper, with the 2-10-yr spread running 279.2.

The dollar index saw some immediate weakness following the FOMC statement, but losses quickly turned to gains before easing back towards the flat line. The pound was the best performing currency all session long, and ended U.S. trading up 85 pips to 1.5900.DJ30 +8.25 NASDAQ +20.25 SP500 +5.45 NASDAQ Adv/Vol/Dec 1995/2.04 bln/649 NYSE Adv/Vol/Dec 2089/1.12 bln/920

3:30 pm : Commodities finished higher across the board today, with livestock (+2.3%) and energy (+1.9%) leading the way. Sugar futures surged 4.1% to close at $0.3313/pound.

March crude oil rallied for 1.3% to close at $87.33 per barrel. While this morning's inventory data ended up being a non-event, prices were able to rebound following a six session sell off. Since trading to two year highs, at $92.58, in early Jan, prices have dropped as much as 8.9%. Feb natural gas finished just above the flat line at $4.48 per MMBtu. Prices rallied off of lows throughout the afternoon to finish higher for the first time this week.

Feb gold ended just above unchanged at $1330.00 per ounce, while March silver finished up 0.9% to $27.13 per ounce. Both metals are rallying in afterhours trade, following the release of the FOMC statement. DJ30 +25.24 NASDAQ +23.40 SP500 +6.98 NASDAQ Adv/Vol/Dec 1939/1.7 bln/694 NYSE Adv/Vol/Dec 2098/813.8 mln/893

2:55 pm : The major market averages trade in positive territory, with the Dow just below 12,000, and the S&P just below 1300. The 0.8% gain for the Nasdaq leads the major averages.

Shares of Netflix (NFLX 183.66, -3.08) have been under pressure the entire session with the company set to release its Q4 earnings after the closing bell. The Thomson Reuters consensus is calling for earnings per share of $0.71 and revenues of $597.49 million. Analysts will be focusing on subscriber growth, which is arguably the most important metric. The company has previously guided for Q4 total subscriptions to be in the range of 19.0-19.7 million.DJ30 +17.86 NASDAQ +20.96 SP500 +6.18 NASDAQ Adv/Vol/Dec 1910/1.54 bln/711 NYSE Adv/Vol/Dec 2035/734.3 mln/936

2:30 pm : The latest FOMC statement didn't contain any major surprises. The FOMC left rates unchanged at 0.00-0.25% and maintained the expansion of its asset purchase program, with a continued intention to purchase $600 bln of longer-term Treasury securities by the end of Q2 2011. The FOMC noted that information received since the Federal Open Market Committee met in December confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions. It also said that it continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

All voting members voted in favor of today's FOMC policy action.

The markets have seen some whipsaw action in the wake of the Fed, but the overall response has been contained thus far, with the Dow losing about 20 pts since the release of the statement. The dollar intially weakened, but is now slightly in positive territory.DJ30 +12.41 NASDAQ +19.59 SP500 +5.05 NASDAQ Adv/Vol/Dec 1925/1.41 bln/693 NYSE Adv/Vol/Dec 2036/658.2 mln/926

1:55 pm : The marjor market averages continue to hold gains ahead of the Fed. All three major averages trades just off their best levels of the session, with the Nasdaq higher by 0.9%.

The dollar index flat as the market awaits the FOMC interest rate decision. The foreign exchange market has been pretty quiet today as traders are unwilling to take a position ahead of the Fed. The dollar is holding on to small gains against the euro, Japanese yen, Swiss franc, and Aussie dollar, but trades slightly lower against the British pound and Canadian dollar. The pound continues to see the biggest fluctuations ahead of the Fed as this morning's Bank of England Minutes showed a second dissenter to the bank's policy after months of just one dissenter.DJ30 +33.68 NASDAQ +25.05 SP500 +7.54 NASDAQ Adv/Vol/Dec 1960/1.28 bln/635 NYSE Adv/Vol/Dec 2079/592.2 mln/864

1:30 pm : The market is drifting back toward the mid-day highs as we approach today's FOMC statement at 2:15 ET. The Fed is expected to hold steady with their current policy of asset purchases, while citing an improving economic outlook. Details around the vote will be of interest, as market participants will be watching for any dissenting votes now that Kansas City Fed President Hoenig is out of the voting rotation. While it is impossible to predict how the market will react to the event, it is likely that we'll see some heightened intraday volatility around the announcement.DJ30 +21.87 NASDAQ +19.04 SP500 +5.82 NASDAQ Adv/Vol/Dec 1929/1.18 bln/649 NYSE Adv/Vol/Dec 2055/554.0 mln/900

1:00 pm : Stocks started the session off on a positive note, and saw a boost from the better-than-expected New Home Sales report. The data pushed the Dow above 12,000 for the first time since June 2008. Earnings results have been generally strong with most companies topping EPS estimates, but revenues have been more of a mixed bag. All three major indices are trading higher with the Nasdaq leading the way.

Energy stocks are leading today's advance as strength in Halliburton (HAL 42.78, +2.58), Baker Hughes (BHI 65.12, +2.80), and Marathon Oil (MRO 45.20, +1.65) has propelled the S&P 500 Energy Index to a gain of 1.6% during today's trade. Occidental Petroleum (OXY 94.94, -2.21) is the worst performing stock in the index following the company's mixed earnings report. The company topped EPS expectations by $0.03 per chare, but missed on revenues.

Shares of aircraft maker Boeing (BA 69.97, -2.27) are under pressure following the company's weaker-than-expected full year 2011 forecast. The company guided earnings of $3.80-$4.00 per share, which is weaker than the consensus estimate of $4.55 per share. The company announced earnings of $1.56 per share (which may not compare) versus the Thomson Reuters consensus of $1.12. Revenues came in soft at $16.55 billion versus the consensus estimate of $17.02 billion. Shares of competitors Lockheed Martin (LMT 78.32, -0.75) and Northrop Grumman (NOC 68.49, -1.02) are trading lower on the results. Two IPOs began trading today, and both are off to strong starts.

Nielsen (NLSN 25.35, +2.35) and Demand Media (DMD 23.09, +6.09), and both priced above expectations. NLSN priced its 71.4 mln share IPO at $23, above the $20-22 expected range, while DMD priced an 8.9 mln share IPO at $17, vs. expectations for 7.5 mln shares at $14-16.

Treasuries are near their worst levels of the session ahead of today's $35 billion 5-yr note auction, causing the 10-yr yield to rise more than seven basis points to 3.405%. The sell off has done little steepen the yield curve as the 2-10-yr spread is little changed near 276.

The dollar index trades near the flat line in relatively quiet trade as most participants are awaiting this afternoon's FOMC interest rate decision. The pound is seeing a gain of 60 pips to 1.5875 after this morning's Bank of England Minutes showed a second dissenter to the BoE's policy.

The FOMC interest rate decision will be announced at approximately 2:15 p.m. ET.DJ30 +23.27 NASDAQ +20.78 SP500 +6.03 NASDAQ Adv/Vol/Dec 1921/1.10 bln/655 NYSE Adv/Vol/Dec 2061/519.3 mln/878

12:30 pm : The major market averages all trade in positive territory as the Nasdaq continues to lead the way with a gain of 0.6%.

Energy is the top performing sector today as the S&P 500 Energy Index trades higher by 1.5%. Halliburton (HAL 42.59, +2.39) touched a 52-week high today, and is the top performer in the index. Other components of the index seeing solid gains today include Baker Hughes (BHI 65.07, +2.75) and Marathon Oil (MRO 45.03, +1.48). Shares of Occidental Petroleum (OXY 95.41, -1.74) are notably weak this morning following a beat of $0.03 per share, but light revenues for the previous quarter. Within the index 38 of 41 stocks are trading in positive territory.DJ30 +9.50 NASDAQ +17.27 SP500 +4.81 NASDAQ Adv/Vol/Dec 1875/992.2 mln/684 NYSE Adv/Vol/Dec 1998/474.6 mln/907

12:00 pm : All three major indices are back in positive territory as the Nasdaq continues to lead the way with a 0.6% gain.

Treasuries trade near their worst levels of the session with the FOMC interest rate decision just more than two hours away. A new leg of selling pushed maturities to their worst levels of the session following the better-than-expected New Home Sales reading. Today's $35 bln 5-yr note auction remains almost an afterthought as the market is fixated on what the Fed will say. Yields across the curve are higher between five and seven basis points as they continue to fluctuate within their one-month ranges. Selling today has had little effect on the yield curve, as the 2-10-yr spread is little changed at 276.DJ30 +4.50 NASDAQ +14.87 SP500 +4.50 NASDAQ Adv/Vol/Dec 1790/902.7 mln/724 NYSE Adv/Vol/Dec 1981/431.2 mln/910

11:30 am : The major indices trade mixed with the Nasdaq leading the way with a 0.7% gain, and the Dow slighty below the flat line.

Aircraft maker Boeing (BA 69.43, -2.81) is under pressure this morning following the company's mixed earnings report. The company announced earnings of $1.56 per share (which may not compare) versus the Thomson Reuters consensus of $1.12. Revenues came in soft at $16.55 billion versus the consensus estimate of $17.02 billion. The company also issued full year 2011 guidance of $3.80-$4.00 per share, which is weaker than the consensus estimate of $4.55 per share. Shares of competitors Lockheed Martin (LMT 77.87, -1.20) and Northrop Grumman (NOC 68.54, -0.97) are trading lower on the results.DJ30 -4.35 NASDAQ +18.43 SP500 +4.18 NASDAQ Adv/Vol/Dec 1855/793.6 mln/628 NYSE Adv/Vol/Dec 2027/379.0 mln/839

11:00 am : All three major indices trade solidly in positive territory following the better-than-expected new home sales reading. The Nasdaq (+0.8%) leads the way, followed by the S&P 500 (+0.5%), while the Dow (+0.1%) brings up the rear.

Two IPOs began trading today, and both are off to strong starts. Nielsen (NLSN 25.52, +2.52) and Demand Media (DMD 23.46, +6.46), and both priced above expectations. NLSN priced its 71.4 mln share IPO at $23, above the $20-22 expected range, while DMD priced an 8.9 mln share IPO at $17, vs. expectations for 7.5 mln shares at $14-16.DJ30 +13.28 NASDAQ +21.67 SP500 1296.98 NASDAQ Adv/Vol/Dec 1882/663.3 mln/558 NYSE Adv/Vol/Dec 2100/317.7 mln/739

10:35 am : The dollar index has been climbing higher over the last few hours and spiked to new session highs of 78.038 minutes ago. However, it has since moved back into negative territory. The earlier strength in the dollar index pressured commodities, but currently, 12 of the 19 commodities in the CRB Commodity Index are still in positive territory. Soft and industrial commodities are mixed this morning, while grains and livestock is in positive territory. Coffee futures are leading the CRB Index and is currently up 3.7% at $2.399/lb.

Cotton futures hit another new all-time high today after rising the exchange limit overnight (+5 cents). Cotton is 127% higher YoY as China demand has, and continues, to be the primary driver. In 2010, China cotton imports rose 86%.

Cocoa futures are up for an eight consecutive day following the Ivory Coast export ban. The most active cocoa contract (March) is currently 1% higher at $3,367/metric ton and is 19% higher over the past 13 trading sessions.

Energy markets are mixed as natural gas is trading in the red and crude, heating oil and RBOB are all higher. March crude oil hit session highs of $86.99 per barrel, but pulled back as the dollar index continued to gain strength. Currently, crude is 0.3% higher at $86.48 per barrel.

February natural gas fell into negative territory four hours again and remains there in current activity. It hit new session lows of $4.38 per MMBtu less than an hour ago and is now 1% lower at $4.43 per MMBtu.

Precious metals are mixed with February gold down 0.3% at $1328.40 per ounce and March silver 0.1% higher at $26.85 per ounce.DJ30 +34.47 NASDAQ +21.57 SP500 +6.85 NASDAQ Adv/Vol/Dec 1795/523.8 mln/580 NYSE Adv/Vol/Dec 2056/253.0 mln/737

10:05 am : All three major indices trade positive following the better-than-expected new home sales number.

New home sales for December increased 17.5% month-over-month to an annualized rate of 329,000 units, a bit above the rate of 300,000 units that had been expected, on average, among economists polled by Briefing.com. Nonetheless, the 17.5% increase comes following the 5.5% gain that occurred in November.DJ30 +11.73 NASDAQ +3.87 SP500 +3.00 NASDAQ Adv/Vol/Dec 1183/295.4 mln/1064 NYSE Adv/Vol/Dec 1600/154.8 mln/1079

09:45 am : The major indices hold trade mixed with the Dow slightly lower, and the S&P 500 and Nasdaq holding small gains. Materials and telecom led the advance, posting respective gains of 0.8% and 0.6%.

Commodities have been rather quiet this morning with crude oil, gold, and silver all little changed.

Treasuries continue to trade just off their worst levels of the session ahead of this afternoon's FOMC interest rate decision.DJ30 -7.04 NASDAQ +1.39 SP500 +1.33 NASDAQ Adv/Vol/Dec 1242/156.3 mln/894 NYSE Adv/Vol/Dec 1493/97.9 mln/1110

09:14 am : [BRIEFING.COM] S&P futures vs fair value: +3.60. Nasdaq futures vs fair value: +4.80. S&P futures have pared some of their gains, but still point to a slightly higher open. Earnings per share results have been mostly better-than-expected, while revenues are more of a mixed bag. Boeing (BA) and Occidental Petroleum (OXY), and Xerox (XRX) are just a few of the handful of companies that posted better-than-expected earnings per share, but missed on revenues. Data to be released today includes New Home Sales at 10 a.m. ET, and the FOMC interest rate decision at 2:15 p.m. ET.

08:59 am : [BRIEFING.COM] S&P futures vs fair value: +3.80. Nasdaq futures vs fair value: +5.00. Treasuries are under pressure this morning as last night's State of the Union address combined with higher equity futures have caused some selling across the complex. Yields across most of the curve are higher between four and six basis points, with the 30-yr being the exception, up just under three basis points. The sell off has caused the yield curve to flatten slightly for the session as the 2-10-yr spread trades 274.

After seeing some early morning weakness, the dollar index is back near the flat line at 77.90. The foreign exchange complex is rather quiet as traders await this afternoon's FOMC interest rate decision and statement. The pound is seeing some strength (+50 pips at 1.5865) this morning after Bank of England Minutes showed two members voted for an interest rate hike. A second dissenter is significant because there had been just one lone dissenter for a number of months.

08:30 am : [BRIEFING.COM] S&P futures vs fair value: +5.60. Nasdaq futures vs fair value: +7.00. S&P futures are still bid, and action remains strong overseas. Britain's FTSE is trading +1.3% with mining giants BHP Billiton (BHP) and Rio Tinto (RIO) posting strong gains. Minutes from the BoE's last meeting revealed that two members voted for a rate hike (the vote was 7-2 against hiking). This is significant since there was only one vote for an increase in the prior meeting. The pound spiked on the news, although it's worth noting that this vote occurred before yesterday's disappointing UK GDP data, which showed an unexpected contraction. Materials stocks are also leading the way in France and Germany with the CAC and DAX trading up 1.1% and 0.9% respectively.

Asian stocks closed mostly higher on thin trade with the Lunar New Year holiday in China next week, and Indian and Australian markets closed for holiday. Hong Kong's Hang Seng eked out a small gain amid strength in IT and materials. Gains in the same industries propelled shares in Shanghai to finish higher by 1.2%. South Korea announced 0.5% GDP growth for Q4, a number that showed a decline from the previous quarter, but topped expectations. Japanese automaker Toyota Motor (TM) announced a 1.7 million car recall.

http://finance.yahoo.com/marketupdate/update