4:20 pm : After stumbling out of the gate, the major averages slowly clawed their way higher to close relatively unchanged as several weeks of underlying bullish momentum didn't stay idle long enough for the bears to declare an outright victory. The Dow, which was down as much as 75 points intraday, closed down less than four points. The Nasdaq, down 0.8% at its lows, closed just above the flat line.
With several indices hitting historic levels of late, it wasn't surprising to see investors exercise a cautious stance ahead of tomorrow's FOMC meeting.
Nonetheless, the market's resilience in the face of a rebound in oil prices and some quarterly shortfalls from a handful of S&P 500 constituents (e.g. DUK, EP, HET, MMC, and THC) was noteworthy since the broader market only enjoyed upside leadership from two economic sectors.
As evidenced by the tech-laden Nasdaq holding on to enough momentum to eke out a gain, Technology turned in the day's best performance. Cisco Systems (CSCO 28.36 +0.55) -- a suggested holding in the Briefing.com Active Portfolio -- surged 2.0% ahead of its earnings report after the bell. Dow component Hewlett-Packard (HPQ 45.07 +1.27) provided additional sector support after raising its Q2 earnings outlook and issuing upside Q3 guidance. Expectations for a strong report from Electronic Arts (ERTS 52.94 +1.57) earmarked Home Entertainment Software as the day's best performing S&P industry group.
After being down more than 1.0% earlier in the session, Energy turning the corner midday also returned some much needed leadership. After six straight days of declines, crude for June delivery rose 1.3% to $62.26/bbl after the EIA raised U.S. oil demand forecasts for Q2 and Q3 by 20,000 bpd. Reports of more political unrest in Nigeria also raised concerns about potential supply disruptions.
Notably, transportation stocks gained ground in the face of oil's rebound as higher energy prices continue to make Railroads (+1.6%) look attractive as a more affordable alternative. The group was in focus all day after CSX Corp (CSX 46.52 +0.62) lifted its dividend 25% and raised its repurchase program by $1.0 bln. Another notable buyback announcement came from Ryder System (R 53.53 +1.31). DJ30 -3.90 DJTA +1.0% NASDAQ +0.80 SP500 -1.76 NASDAQ Dec/Adv/Vol 1784/1256/1.95 bln NYSE Dec/Adv/Vol 1969/1266/1.42 bln
3:30 pm : The indices continue to languish just below the flat line as buyers lack the necessary catalysts to sideline today's consolidation efforts going into the close. Meanwhile, Energy has finally turned the corner again; but its 0.2% advance is more than offset by a 0.2% decline in Financials. Technology is the only other sector in positive territory; but its modest 0.4% gain is countered by declines of 0.3% in Health Care and Discretionary.
Materials is still in the red but has shown the most significant improvement within the hour as Alcoa (AA 39.81 +1.18) soars to fresh multi-year highs after JANA Partners LLC called on Alcoa's Board to drop the Alcan bid and pursue strategic alternatives, including a sale of the company. However, as the least influential of the 10 S&P 500 sectors, the Materials sector's impact has only been felt because Alcoa is a Dow component, which accounts for nearly 10 Dow points. DJ30 -6.46 NASDAQ -0.78 SP500 -1.64 NASDAQ Dec/Adv/Vol 1921/1102/1.59 bln NYSE Dec/Adv/Vol 2034/1192/1.18 bln
3:00 pm : More of the same for stocks as sellers still hold a slight edge over buyers. As reflected in the A/D line, decliners on the NYSE hold a 5-to-3 edge over advancers while those on the Nasdaq hold a 19-to-10 margin.
Volume at the Big Board and the Composite, though, is mixed, with up volume on the Nasdaq slightly outpacing down volume but not by enough of a margin to get overly excited about since total participation isn't all that convincing with only one hour left to go. DJ30 -19.71 NASDAQ -3.89 SP500 -3.31 NASDAQ Dec/Adv/Vol 1934/1105/1.47 bln NYSE Dec/Adv/Vol 2041/1203/1.07 bln
2:30 pm : After a short reprieve buyers are back at it again, exercising some of the momentum that recently lifted several indices to historic highs. As evidenced by the Nasdaq briefly turning positive for the first time today, strength from several leading Tech stocks (e.g. CSCO +1.3%, QCOM +1.1%, EBAY +1.2%, ERTS +2.4%, SNDK +1.2%) remains the biggest reason behind the market's latest recovery attempts.
However, until the broader market gets a turnaround in at least one more of its heavily-weighted sectors, say Financials (-0.1%) or Industrials (-0.1%), the bears are likely to declare victory for the first time in five days.
2:00 pm : The resurgence on the part of buyers within the last 90 minutes has run into some headwinds. Tech now standing as the day's only winning sector with a modest gain of only 0.3% just isn't providing enough leadership to support the entire market.
Even though oil prices are holding their own near session highs (+1.2%), the Energy sector's inability to hold on to even the smallest of gains offers a double dose of concern for the bulls as the commodity's inflationary characteristics are no longer offset by the earnings potential of leading energy names. El Paso Corp (EP 15.05 -0.52) is the sector's biggest laggard, down 3.3% after Q1 earnings fell short of analysts' expectations, while Rowan Companies (RDC 37.44 -1.25) is sporting a similar decline after being downgraded on valuation. DJ30 -28.20 NASDAQ -5.22 SP500 -3.90 XOI -0.4% NASDAQ Dec/Adv/Vol 1956/1007/1.24 bln NYSE Dec/Adv/Vol 2069/1106/900 mln
1:30 pm : The indices are trading at improved levels, getting some help from continue improvement among a handful of key sectors. While Tech and Energy are still the only sectors posting gains, Financials and Industrials seeing their recent losses more than halved over the last hour is also noteworthy from a leadership standpoint.
A 3.6% advance in Moody's Corp (MCO 67.89 +2.33) now earmarks Specialized Financials (+1.1%) as one of today's best performing S&P industry groups while a 6% surge in Countrywide Financial (CFC 40.80 +2.29) has helped Thrifts & Mortgage (+1.1%) break into today's ton ten. Both stocks began climbing around 12:00 ET following reports that the U.S. House financial services committee will proceed with legislation to aid borrowers with subprime mortgages. DJ30 -25.35 NASDAQ -3.40 SP500 -3.28 NASDAQ Dec/Adv/Vol 1913/1053/1.15 bln NYSE Dec/Adv/Vol 1984/1164/840 mln
1:00 pm : Stocks are breaking out of their intraday trading ranges, but getting a boost from off all things, a rebound in oil prices. After being down 1.1% earlier as the day's worst performing sector, Energy recently turning positive has returned some much needed leadership if the bulls are to get the indices back on track. Crude for June delivery is now up 1.3% near $62.30 /bbl after the EIA said it expects gasoline prices to average $2.95 a gallon this summer.
In addition to Energy's turnaround, transportation stocks actually gaining ground in the face of oil's uptick has actually made the Railroads (+2.3%) even more attractive since high energy prices have made shipping by rail a more affordable alternative. The group has been in focus all morning after CSX Corp (CSX 46.95 +1.05) lifted its dividend 25% and raised its buyback program by $1.0 bln. DJ30 -29.86 DJTA +1.1% NASDAQ -5.46 SP500 -3.74 NASDAQ Dec/Adv/Vol 2071/881/1.04 bln NYSE Dec/Adv/Vol 2156/993/754 mln
12:30 pm : The afternoon session gets underway in the same fashion that the morning session ended, with stocks trading lower across the board.
Technology recently inching back above the flat line is the only noticeable change; but its 0.06% advance barely qualifies as such since the remaining nine sectors are down at least 0.60% on average. DJ30 -57.12 NASDAQ -12.05 SP500 -6.95 NASDAQ Dec/Adv/Vol 2110/811/930 mln NYSE Dec/Adv/Vol 2265/844/660 mln
12:00 pm : The indices are posting modest losses midday as a sense that stocks are overbought at current levels overshadows more M&A news and upside guidance from a Dow component.
With the major averages enjoying five straight weeks of gains, it hasn't been a big surprise to see such an impressive run-up prompt some sort of profit taking today, even as many of the catalysts behind the recent rally are present again this morning.
On the M&A front, Thomson (TOC 41.29 -1.54) and Reuters (RTRSY 75.49 -1.01) confirmed they are in talks to potentially merge in a $17.6 bln deal while Arcelor Mittal (MT 56.07 -1.41) is reportedly set to bid $4.5 bln for AK Steel (AKS 35.12 +3.06).
Dow component Hewlett-Packard (HPQ 44.69 +0.89) opening at a new 52-week high after raising its Q2 earnings outlook and issuing upside Q3 guidance has also given investors something to cheer about.
Nonetheless, the Dow logging its 24th gain in 27 tries and closing with its fifth straight record yesterday has left the bulls looking tired and sellers questioning the sustainability of recent market gains hungry to take some money off the table. All 10 sectors are in negative territory, paced by declines Telecom (-0.9%), Materials (-0.8%), and Utilities (-0.7%); but that too is understandable since all three also rank as this year's best performing sectors with an average gain of 13.2%. DJ30 -61.52 NASDAQ -12.07 SP500 -7.33 NASDAQ Dec/Adv/Vol 2133/763/826 mln NYSE Dec/Adv/Vol 2283/787/578 mln
11:30 am : The indices remain negative across the board, but a recent turnaround in Technology has given the bulls another leg of support amid such widespread weakness. Cisco Systems (CSCO 28.08 +0.27), a suggested holding in the Briefing.com Active Portfolio, is surging 1.0% ahead of its earnings report after the bell while a 1.8% guidance-induced advance in Dow component Hewlett-Packard (HPQ 44.60 +0.80) is also providing notable sector support.
Yahoo! (YHOO 30.80 +0.42) surging 1.4% amid upbeat analyst commentary citing a deal between it and Microsoft (MSFT 30.72 +0.01) possibly being announced at Microsoft's Annual Strategic Summit tomorrow is also lending some validation behind the sector's recent run-up. Yahoo's spike higher has lifted Internet Software and Services into today's top ten. DJ30 -51.70 NASDAQ -9.81 SP500 -6.51 NASDAQ Dec/Adv/Vol 2133/735/724 mln NYSE Dec/Adv/Vol 2269/772/494 mln
11:00 am : The indices are rebounding from their morning lows, finding some relief as oil prices turn negative, but not nearly enough to make a significant change in the standings.
Unfortunately for the bulls, the recent reversal in oil, which now leaves the June crude contract on pace for its seventh straight losing session, has also positioned Energy (-0.9%) as this morning's biggest laggard, removing leadership from an increasingly influential sector. DJ30 -56.35 NASDAQ -11.13 SP500 -6.50 XOI -0.7% NASDAQ Dec/Adv/Vol 2143/650/550 mln NYSE Dec/Adv/Vol 2236/763/380 mln
10:30 am : Sellers continue to show their resolve as some discouraging news about housing provides an additional excuse to keep consolidating. At the top of the hour, the National Association of Realtors lowered their 2007 forecasts, saying existing homes sales will probably fall about 3% this year to 6.29 mln, new homes sales will likely fall about 18% to 864,000, and housing starts may plunge 19% to 1.46 mln. Homebuilding (-1.2%) now ranks among today's ten worst performing S&P industry groups.
Separately, March wholesale inventories rose a less than expected 0.3% while sales jumped 1.8%; however, since the swing wasn't enough to affect the GDP outlook and the sales figures say close to nothing about personal consumption, the report has been largely displaced by the housing data as traders begin to key in on tomorrow's FOMC meeting to get some clarity about the economic outlook and what Fed officials will say about the ongoing "adjustment in the housing sector." DJ30 -71.35 NASDAQ -19.71 SP500 -8.54 NASDAQ Dec/Adv/Vol 2162/565/394 mln NYSE Dec/Adv/Vol 2283/649/272 mln
10:00 am : The indices are extending their reach to the downside as all 10 sectors slip deeper into the red. Among this morning's biggest disappointments are Telecom (-0.7%), Materials (-0.6%), and Utilities (-0.6%); but that's understandable since all three also rank as this year's best performing sectors with an average gain of 13.2%.
The absence of leadership from more influential areas like Financials (-0.5%), Health Care (-0.5%), and Industrials (-0.5%), which combine to account for nearly 45% of the total weighting on the S&P 500, pose even more of a problem for the bulls if they are to continue with their winning ways today. DJ30 -65.28 NASDAQ -13.19 SP500 -6.82 NASDAQ Dec/Adv/Vol 1891/668/174 mln NYSE Dec/Adv/Vol 2034/633/82 mln
09:40 am : As expected, stocks open lower across the board as a sense that stocks are overbought at current levels invites some early profit taking. With the major averages logging five consecutive weeks of gains it's not surprising to see investors begin to question the sustainability of such an impressive rally.
On a positive note, Dow component and tech bellwether Hewlett-Packard (HPQ 44.50 +0.70) has opened at a new 52-week high and is up 1.6% after raising its Q2 profit outlook and issuing upside Q3 guidance. Nonetheless, the Dow logging gains in 24 of 27 sessions and closing with its fifth straight record yesterday has left the bulls looking fatigued, leaving the door open for sellers to take some money off the table. DJ30 -53.31 NASDAQ -11.01 SP500 -5.12 NASDAQ Vol 88 mln NYSE Vol 46 mln
09:15 am : S&P futures vs fair value: -5.5. Nasdaq futures vs fair value: -5.8.
09:00 am : S&P futures vs fair value: -4.8. Nasdaq futures vs fair value: -4.2. The futures market is trading at improved levels but continues to languish well below fair value, still indicating a negative start for stocks. Dow component Hewlett-Packard (HPQ) looking to open at a new 52-week high after raising its Q2 earnings outlook and issuing upside Q3 guidance has given the bulls something to work with. Some more M&A news is also noteworthy. Arcelor Mittal (MT) is reportedly set to bid $40 per share for AK Steel (AKS) while Thomson (TOC) and Reuters (RTRSY) confirmed they are in merger discussions. However, the temptation to lock in profits following a remarkable run since early March continues to hold precedence.
08:30 am : S&P futures vs fair value: -5.6. Nasdaq futures vs fair value: -7.8. The stage remains set for sellers to regain the upper hand and finally, after an eight-week wave of buying momentum, have their argument regarding overbought conditions heard. Earnings shortfalls from a handful of S&P 500 constituents (e.g. DUK, EP, HET, and MMC), billionaire investor Carl Icahn failing to win a seat on the board of struggling Motorola (MOT), and some trepidation ahead of tomorrow's FOMC meeting are also acting as constraints for the bulls in the early going.
08:00 am : S&P futures vs fair value: -5.7. Nasdaq futures vs fair value: -8.0. Early indications suggest stocks will open sharply lower. While there aren't any specific news items to account for the negative disposition, it's not surprising to see a market ripe for a pullback prompt investors to take some money off the table.
Since the Dow began its run on March 28 of posting 24 gains in 27 sessions, a streak not achieved since 1927, the index is up 8.2% and up 10.5% since bottoming earlier that month. The S&P 500 finished yesterday at fresh six-year highs and less than 18 points from the all-time closing high of 1527.46 reached on March 24, 2000.
06:21 am : S&P futures vs fair value: -5.9. Nasdaq futures vs fair value: -6.8.
06:20 am : FTSE...6563.20...-40.50...-0.6%. DAX...7452.45...-73.24...-1.0%.
06:20 am : Nikkei...17656.84...-12.99...-0.1%. Hang Seng...20706.35...-190.29...-0.9%.
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