4:20 pm : The major averages held onto modest gains Wednesday as a diplomatic resolution in the Middle East and some upbeat analyst commentary provided the bulls with just enough impetus to look past more evidence of slowing economic growth.
With the Dow, S&P 500 and Nasdaq up 1.0% on average a day earlier, it wasn't surprising to see investors begin to question such sizable gains amid a lack of overwhelming news behind such a surprise rally.
However, with a nearly 6% risk premium put into oil futures last week amid growing geopolitical tensions, Iranian President Ahmadinejad announcing the release of 15 British sailors pushed oil prices to session lows and improved overall sentiment. Crude for May delivery was down as much as 1.7% and below $64/bbl; but it closed well off its lows since the geopolitical crisis involving Iran's capture of 15 Britons merely became less of a crisis as Iran continues to defy UN demands to halt its uranium enrichment program.
As evidenced by the Nasdaq outpacing its blue-chip counterparts to the upside and logging its fifth consecutive gain, Technology was the day's best performer. Microsoft (MSFT 28.50 +0.63), which is also the Nasdaq's most influential constituent and third most heavily-weighted stock on the S&P 500, was the driving force behind all three indices.
The day's best performing Dow component soared 2.3% after a Citigroup analyst raised his Q3 earnings and revenue estimates due to demand for Microsoft's Windows Vista. An analyst upgrade on Semiconductor Equipment (+1.7%), the day's seventh best performing S&P industry group, provided additional sector support.
Health Care and Consumer Staples were other bright spots today due in part to their defensive characteristics; but their modest gains struggled to offset the lack of follow-through from the likes of Financials and Industrials. REITs were among the day's biggest disappointments but Industrials was home to the day's worst performing S&P industry group. Human Resources plunged 9.5% after Monster Worldwide (MNST 42.10 -6.41) cut its Q1 revenue guidance.
Telecom and Utilities were the day's biggest laggards, but that's understandable since both are among this year's three best-performing sectors.
Separately, ISM Services unexpectedly fell in March to 52.4 in March, the lowest reading since April 2003, while the employment component slumped to just above growth at 50.8. The bears also pointed to a smaller than expected rise in February factory orders, which further underscores the weak pace for 2007 manufacturing activity, as another reason to question whether or not yesterday's surprise rally was a bit overdone. BTK +0.6% DJ30 +19.75 DJTA -0.2% DJUA -0.4% DOT -0.2% NASDAQ +8.36 NQ100 +0.3% R2K -0.1% SOX +0.9% SP400 +0.1% SP500 +1.60 XOI +0.6% NASDAQ Dec/Adv/Vol 1631/1356/1.68 bln NYSE Dec/Adv/Vol 1528/1730/1.26 bln
3:30 pm : Buyers are showing some resolve going into the close, but the lack of volume during a thinly-traded, holiday-shortened week, continues to offer minimal confidence as to the sustainability of recent gains. The NYSE did not see 1.0 bln shares trade hands until 30 minutes ago.
Be that as it may, there's no denying that the Dow and Nasdaq poised to close higher for a fifth straight day suggests that investors aren't overly concerned about an upcoming earnings season that is likely to see 14 consecutive quarters of double-digit profit growth for the S&P 500 snapped. DJ30 +24.05 NASDAQ +9.05 SP500 +2.20 NASDAQ Dec/Adv/Vol 1575/1377/1.46 bln NYSE Dec/Adv/Vol 1532/1707/1.08 bln
3:00 pm : Equities continue to run in place just above the flat line with few catalysts to send them noticeably higher. Oil prices recently closed lower but well off their worst levels to offer the kind of support yesterday's 2.1% downturn in crude provided for the bulls.
Bond yields are lower, which is also supportive for equities; but they too have scaled back heading into the final hour of trading and continue to be overlooked by a rate-sensitive Financials sector (-0.4%) that was last quarter's worst performer (-3.4%). Retail REITs (-1.7%), Industrial REITs (-1.4%), Office REITs (-1.3%), and Diversified REITs (-1.3%) are four of today's 10 worst performing S&P industry groups. DJ30 +13.92 NASDAQ +7.04 SP500 +0.54 NASDAQ Dec/Adv/Vol 1596/1345/1.32 bln NYSE Dec/Adv/Vol 1545/1672/974 mln
2:30 pm : Range-bound trading persists for stocks as investors lack the catalysts to more aggressively build on yesterday's widespread gains. The Q&A session has begun, with Dallas Fed President Fisher recently saying the yield on the 10-year note is a vote of confidence on economy, not a vote of concern.
However, such comments and no surprises have hardly provided the "vote of confidence" either bond or stock traders were looking for. The 10-year note is up 5 ticks to yield 4.64%. DJ30 +12.71 NASDAQ +6.94 SP500 +0.57 NASDAQ Dec/Adv/Vol 1612/1333/1.23 bln NYSE Dec/Adv/Vol 1564/1619/900 mln
2:00 pm : More of the same for stocks as there isn't a strong sense of conviction on either the bullish or bearish side of the aisle. As reflected in the A/D line, advancers and decliners on the NYSE remain evenly matched while declining issues on the Nasdaq hold only a slight edge over advancing issues.
On the Dow, 15 components are trading higher, paced by a 2.3% advance in Microsoft (MSFT 28.51 +0.64), while the index's remaining 15 components are trading lower. The laggards are being led by a 0.9% decline on Walt Disney (DIS 34.60 -0.32). DJ30 +9.83 NASDAQ +5.25 SP500 +0.04 NASDAQ Dec/Adv/Vol 1600/1326/1.14 bln NYSE Dec/Adv/Vol 1569/1596/834 mln
1:30 pm : After briefly spiking to afternoon lows, stocks are retracing morning highs; but for the most part, the indices remain mired in relatively narrow ranges. Oil prices nearly turning positive within the last 30 minutes contributed to the modest pullback in equities.
Meanwhile, investors are now awaiting a Q&A session following Dallas Fed President Fisher's testimony before mortgage bankers in Autin, Texas since he did not discuss the outlook for interest rates or inflation in his prepared remarks. Fisher did say, however, that the economy is "strong enough to weather the storm" and that subprime problems may be "blessing in disguise." Nonetheless, answers to upcoming questions from the well-known hawkish Fed official will be the focal point for both stock and bond traders.DJ30 +13.90 NASDAQ +6.71 SP500 +0.38 NASDAQ Dec/Adv/Vol 1568/1336/1.03 bln NYSE Dec/Adv/Vol 1544/1589/760 mln
1:00 pm : Not much has changed as traders continue to make their way through the New York lunch hour. The indices are still hovering near session highs, but mixed market internals and below average volume offer little conviction on the part of buyers.
What is reassuring, though, is the fact that despite the temptation to lock in some of yesterday's surprise gains, the bears have been unable to garner much traction to argue whether or not the rally was a bit overdone. DJ30 +22.59 NASDAQ +9.74 SP500 +1.66 NASDAQ Dec/Adv/Vol 1544/1339/956 mln NYSE Dec/Adv/Vol 1485/1634/690 mln
12:30 pm : The major averages continue to claw their way higher, but spearheaded primarily by strength in tech. As evidenced by the Nasdaq outpacing its blue-chip counterparts to the upside, bellwether Microsoft (MSFT 28.73 +0.86) now up 3.1% remains the biggest driver behind the Technology sector's intraday climb (+0.7%).
One need only to look at the fact that Nasdaq decliners still holding a 15-to-12 edge over advancers to see that such a move on the tech-heavy Composite must be coming from at least one of its most influential components. DJ30 +18.72 NASDAQ +10.44 SP500 +1.33 NASDAQ Dec/Adv/Vol 1540/1298/854 mln NYSE Dec/Adv/Vol 1485/1604/614 mln
12:00 pm : The indices are trading slightly higher midday as investors weigh more relief in the Middle East, a subsequent decline in oil prices, and upbeat analyst commentary against weak economic data.
The biggest headline today has been Iranian President Ahmadinejad announcing the release of the 15 British naval personnel captured nearly two weeks ago. The news has improved overall sentiment and pushed oil prices lower. However, given yesterday's sizable gains amid a lack of overwhelming news to support such a rally, it hasn't been overly surprising to see some hesitation on the part of buyers.
In fact, if it weren't for a 2.3% surge on the Nasdaq's most influential constituent and the third most heavily-weighted stock on the S&P 500 -- Microsoft (MSFT 28.51 +0.64), the indices would be exhibiting more noticeable consolidation. The day's best performing Dow component is getting a boost after a Citigroup analyst raised his Q3 earnings and revenue estimates.
Of the four sectors trading higher, Technology is pacing the way, also getting a lift from an analyst upgrade on the Semiconductor Equipment group (+1.2%), while Consumer Staples and Health Care, due in part to their defensive characteristics, are also attracting buyers. The lack of follow-through in Financials and Industrials, though, is keeping market gains in check.
Separately, ISM Services unexpectedly fell in March to its lowest level since April 2003 while a smaller than expected rise in February factory orders further sets the weak pace for 2007 manufacturing activity. BTK +0.4% DJ30 +16.90 DJTA -0.1% DJUA -0.1% DOT -0.3% NASDAQ +6.04 NQ100 +0.3% R2K -0.2% SOX +0.9% SP400 +0.1% SP500 +0.54 NASDAQ Dec/Adv/Vol 1571/1273/740 mln NYSE Dec/Adv/Vol 1559/1510/530 mln
11:30 am : Stocks are bouncing off recent lows but hardly enough to make a significant change in the standings. Split industry leadership continues to dictate this morning's market action, with strength in Tech, Health Care and Staples providing the bulk of support.
Follow-through in Altria Group (MO 70.35 ) is providing the biggest boost to the latter and playing into why we recently upgraded Staples to Overweight from Market Weight. A 1.8% in fellow Dow component Microsoft (MSFT 28.37 +0.50), after Citigroup raised their Q3 estimates due to demand for Windows Vista, is the most noticeable reason behind renewed momentum on all three major averages. DJ30 +13.82 NASDAQ +6.60 SP500 +0.88 NASDAQ Dec/Adv/Vol 1577/1209/620 mln NYSE Dec/Adv/Vol 1606/1434/434 mln
11:00 am : Not much has changed since the last update as the indices continue to trade with little fanfare. Meanwhile, Energy has recently turned positive, but that's due in large part to oil prices paring their losses and, since its gain remains minimal, Energy's turnaround has been unable to offset weakness in more influential areas like Financials, Industrials and Consumer Discretionary.
Crude for May delivery is now down only 0.5% and back above $64/bbl following a larger than expected decline in weekly gasoline inventories. DJ30 -1.93 NASDAQ +1.54 SP500 -1.31 NASDAQ Dec/Adv/Vol 1604/1131/498 mln NYSE Dec/Adv/Vol 1622/1341/330 mln
10:30 am : After initially spiking lower, following a weaker than expected update on growth at U.S. service industries, stocks have rebounded and are back to trading relatively unchanged. At the top of the hour, ISM Services unexpectedly fell to 52.4 in March, the lowest reading since April 2003, while employment slumped to just above growth at 50.8.
The prices paid component climbing to 63.3 from 53.8 a month earlier is also noteworthy as it set off more alarm bells for the inflation hawks. The back-to-back monthly declines, though, have helped fuel a flight-to-quality bid in bonds; the 10-year note is now up 8 ticks to yield 4.63%. DJ30 -0.89 NASDAQ +1.54 SP500 -1.27 NASDAQ Dec/Adv/Vol 1600/1070/350 mln NYSE Dec/Adv/Vol 1727/1154/210 mln
10:00 am : The indices have improved since the last update, but only enough to inch the Dow and S&P 500 into positive territory. Of the four sectors trading higher, Technology is pacing the way after Stifel Nicolaus upgraded the semiconductor capital equipment group to Overweight from Neutral.
However, its modest 0.3% advance is doing little to offset the lack of follow-through in the Financials and Industrials sectors. Not surprising, Energy (-0.5%) is pacing the way lower in sympathy with oil's downturn.DJ30 +8.38 NASDAQ +3.43 SP500 +0.26 NASDAQ Dec/Adv/Vol 1279/1143/156 mln NYSE Dec/Adv/Vol 1280/1304/68 mln
09:40 am : So much for yesterday's broad-based momentum carrying over into this morning's opening bell as stocks appear to be taking a breather. With the Dow, S&P 500 and Nasdaq up 1.0% on average yesterday, it's not surprising to see investors question such sizable gains amid a lack of overwhelming news behind Tuesday's rally.
On a positive note, Iranian President Ahmadinejad recently announcing that the 15 British naval personnel captured nearly two weeks ago will be freed has knocked oil prices below $64/bbl (-1.3%), improving sentiment and providing some support. However, Ahmadinejad also saying that major powers cannot deprive Iran of its right to nuclear technology by U.N. Resolutions merely serves as a reminder of the underlying geopolitical risks in the region. DJ30 -2.41 NASDAQ +2.18 SP500 -0.75 NASDAQ Vol 78 mln NYSE Vol 42 mln
09:15 am : S&P futures vs fair value: +0.4. Nasdaq futures vs fair value: +2.2. The futures market has spiked higher within the last few minutes and now signals a slightly higher open for stocks. Further evidence of easing tensions in the Middle East, after Iran's President said they will free 15 captured Navy personnel as a "gift" to Britain, is largely responsible for the change in sentiment. Oil prices, in turn, have reversed course and are now down nearly 1.0% at $64/bbl.
09:00 am : S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -1.2. Early indications now point to a slightly lower open for the cash market as the lack of market-moving news items continues to stall follow-through momentum. With falling oil prices playing such an integral part in the mindsets of investors yesterday, today's weekly inventories report at 10:30 ET will be a focal point. Crude for May delivery has recently turned positive and is now near $64.80/bbl, which is hardly a positive for the stock market if it stays above the $60 level for too long.
08:30 am : S&P futures vs fair value: -1.5. Nasdaq futures vs fair value: flat. The S&P 500 and Nasdaq 100 futures are still hovering around fair value as a smaller than expected read on monthly jobs growth does little to quell concerns about the pace of economic growth. Within the last 15 minutes the monthly ADP employment report showed that an estimated 106,000 new private jobs, or roughly 127,000 nonfarm jobs, were created in March. Economists expect Friday's more closely-watched and well-established nonfarm payrolls figure to check in around 135,000.
08:00 am : S&P futures vs fair value: -0.1. Nasdaq futures vs fair value: flat. Stocks are slated to open on a relatively flat note. That isn't entirely surprising, though, given the tendency to take a breather after a day in which sizable gains were posted. The Dow, S&P 500 and Nasdaq rose 1.0% on average yesterday. On the earnings front, Best Buy (BBY) topped Wall Street expectations; but upcoming data that may offer some clarity on the economic outlook also leaves investors standing pat for the time being. Most notably, the monthly ADP employment data at 8:15 ET is likely to garner added attention since the March jobs report will be released on Friday when the U.S. stock market is closed.
06:17 am : S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: +0.3.
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