4:20 pm : After recouping all of last week's declines in one session (yesterday), leaving the major averages up more than 1.2% for the week and the Dow at historic highs, it wasn't surprising to see stocks look a bit tired throughout most of the session Thursday. Federal Chairman Bernanke was finishing up his second day of testimony to Congress and the day's scheduled economic data were a mixed bag.
Be that as it may, the momentum fueled by diminishing fears of a possible rate hike kept sellers sidelined for one more day as the bulls held on to close the Dow at record levels for the 29th time since October.
Caterpillar (CAT 67.62 +1.46) was the blue-chip index's best performer (+2.2%) as investors applauded its board's approval of a huge $7.5 bln stock buyback. Fellow Dow component Boeing (BA 91.71 +1.77) was another winner, surging 2.0% to an all-time high after confirming a UPS order for 27 freighters. The same couldn't be said for the rest of the Industrials sector, though, which finished relatively flat as an analyst downgrade on CSX Corp (CSX 40.75 -1.35) and mixed economic data left investors questioning valuations.
Before the bell, the February NY Empire State Index rebounded from a 19-month low, which initially provided good news for the struggling manufacturing sector. However, an unexpected drop in January Industrial Production and a disappointing read on the Philly Fed survey acted as offsetting factors.
Of the eight sectors closing higher, Consumer Staples paced the way. Wal-Mart (WMT 48.36 +0.49) surged 1.0% following reports that The Gates Foundation increased its stake about 50% to 1 mln shares last year. Anheuser-Busch (BUD 51.74 +1.51), which is reportedly in merger talks with InBev, also lent some support.
Another defensive-minded sector providing leadership but inadvertently lending less conviction behind today's follow-through efforts was Health Care. HMOs were among today's best performing S&P industry groups (+2.7%) after Berkshire Hathaway disclosed a stake in UnitedHealth Group (UNH 53.61 +1.97). Biotech was also in focus as billionaire investor Carl Icahn disclosing a 2.8 mln stake in MedImmunne (MEDI 33.16 +1.91) helped offset a Q4 earnings shortfall from Biogen Idec (BIIB 48.00 -2.49).
Technology also provided some notable leadership, getting a lift from analyst upgrades on Qualcomm (QCOM 41.31 +1.65) and Network Appliance (NTAP 40.30 +1.89).
After falling to as low as $56.65/bbl earlier (-2.3%), a late-day rally in oil closed the March contract relatively unchanged. While the market's resilience to the volatile trading in oil of late has been noteworthy, the fact that Energy failed to participate in paring any of its 1.0% intraday decline further underscored the lack of energy investors as a whole had after a healthy two-day sprint for the market. A Q4 earnings shortfall from Baker Hughes (BHI 65.26 -6.68), the day's worst performing S&P 500 constituent (-9.3%), also weighed on Energy. DJ30 +23.16 NASDAQ +8.72 SP500 +1.51 NASDAQ Dec/Adv/Vol 1514/1522/1.98 bln NYSE Dec/Adv/Vol 1352/1900/1.36 bln
10:00 am : With Fed Chairman Bernanke surprising Wall Street yesterday with a more dovish tone, investors are waiting to hear what he'll say over the next few hours, beginning momentarily, with regard to diminished inflationary pressures and the current stance of policy fostering sustainable economic growth. Even though his testimony is widely expected to mirror Wednesday's, the Q&A session will be closely watched to see if he stays on message and doesn't offer up any surprises to what the market concluded a day earlier as a more neutral stance for the Fed. DJ30 +4.57 NASDAQ -1.37 SP500 -1.62 NASDAQ Dec/Adv/Vol 1426/1058/176 mln NYSE Dec/Adv/Vol 1289/1348/78 mln
09:40 am : As expected, stocks open relatively unchanged as mixed economic news on the heels of a two-day rally and ahead of more remarks from Bernanke offer little incentive to keep buying efforts intact. The NY Empire State Index rebounded from a 19-month low, which is good news for struggling manufacturing sector. However, an unexpected drop in Jan. Industrial Production due largely to a 0.7% decline in the key manufacturing component is disappointing, as it takes away from the optimism of the December data.DJ30 -1.88 NASDAQ +1.50 SP500 -0.62 NASDAQ Vol 88 mln NYSE Vol 48 mln
09:20 am : S&P futures vs fair value: +0.2. Nasdaq futures vs fair value: +0.5. Stocks still look to open on a relatively flat note as investors sift through yet another piece of economic data. January Industrial Production unexpectedly fell 0.5% (consensus 0.0%) while Capacity Utilization checked in at 81.2% (consensus 81.7%); but investors are waiting for Bernanke's second day of testimony to perhaps set a more definitive tone to today's action.
09:00 am : S&P futures vs fair value: +0.1. Nasdaq futures vs fair value: +0.5. Futures trade continues to improve and now points to a slightly positive start for the indices. Caterpillar (CAT) recently announcing a huge $7.5 bln stock buyback puts the Dow component up nearly 3% in pre-market action. Helping the tech-heavy Nasdaq early on is Qualcomm (QCOM), which is surging 6% after being upgraded at Oppenheimer. However, with Fed Chairman Bernanke heading back to Capitol Hill today (10:00 ET) and more data to digest on the economic calendar, there is very little conviction on the part of buyers' current attempts to extend two days of hefty gains.
08:33 am : S&P futures vs fair value: -0.4. Nasdaq futures vs fair value: -1.1. Early indications improve but still point to a slightly lower open for the cash market as mixed economic data so far aren't enough to curb the temptation to lock in recent gains. The February NY Empire State Index rose to a healthy 24.4 (consensus 11.0), rebounding from its lowest reading in 19 months; but the focus now turns to this afternoon's Philly Fed survey to provide an even better read on regional manufacturing conditions. Initial claims rose a larger than expected 44K to 357K (consensus 315K). Bonds have strengthened in response to the data, as the 10-year note is now up 7 ticks to yield 4.70%.
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