Market Update 080201 http://biz.yahoo.com/mu/update.html 4:15 pm : After volatile trading on Friday, stocks proved to be resilient by ending on a high note. The stock market's 1.2% gain today capped off a strong 4.9% gain for the week.
Traders were encouraged that the stock market was able to hold up in the face of a worse than expected jobs reading. Word of the largest tech acquisition in history and a better than expected manufacturing reading helped sentiment.
Microsoft (MSFT 30.45, -2.15) offered to buy Yahoo! (YHOO 28.38, +9.20) for $44.6 billion in cash and stock. The $31 per share offer represents a 62% premium over Yahoo's Thursday closing price. It would be the largest technology acquisition ever, beating KKR's $26 billion acquisition of First Data Corp in 2007, according to Bloomberg.com. The market's response was positive, with futures spiking on the news.
Yahoo's board still has to accept the deal, which it said it is currently considering. The deal also has to meet regulatory approvals and the Justice department said it is interested in looking into the takeover's "competitive effects," according to Dow Jones.
Positive sentiment was nearly derailed after the Dept. of Labor said January nonfarm payrolls fell by 17,000, lower than the 70,000 reading economists expected. The number is not as bad at it seems, as December payrolls were revised higher to a gain of 82,000 from 18,000. Also, the number is still less than recessionary levels, when monthly payrolls decline 150,000 to 200,000. The unemployment rate fell to 4.9%, which is less than the 5.0% reading economists expected.
Giving the market a boost, and helping to offset the poor jobs number, was a positive read on manufacturing. The ISM Index, a national manufacturing survey, came in at 50.7, higher than December's reading of 48.4. The consensus estimate called for a lower reading of 47.3. This is good news for the economy. Since the number is above 50, it indicates an expansion in manufacturing.
Separately, shares of Google (GOOG 515.42, -48.88) got trampled today after market participants were displeased with the company's earnings results. Google's reported revenue grew 52.1% year-over-year, but that was still not enough to meet expectations. The company reported earnings of $4.43 per share, missing estimates by two cents. Also not helping matters was talk that the company would face increased competition if the Microsoft and Yahoo! deal goes through.
Nine of the ten economic sectors finished higher, led by materials (+2.2%) and financials (+1.9%). Telecom (-0.3%) was the sole sector in the red.DJ30 +92.83 NASDAQ +23.50 NQ100 +0.8% R2K +2.4% SP400 +2.3% SP500 +16.86 NASDAQ Dec/Adv/Vol 995/1978/3.01 bln NYSE Dec/Adv/Vol 705/2464/1.47 bln
3:35 pm : The stock market is poised to keep its bullish streak on the first day of trading in February intact. With a positive finish, the Dow will be up six of the first trading days in February in a row, according to the Stock Trader's Almanac.
The the three major indices have seen hefty gains this week. The Dow, Nasdaq and S&P 500 are up 4.5%, 6.0% and 4.1%, respectively.DJ30 +76.90 NASDAQ +23.20 SP500 +14.89 NASDAQ Dec/Adv/Vol 1100/1856/2.69 bln NYSE Dec/Adv/Vol 736/2410/1.32 bln
3:00 pm : The bulls are trying to send the major indices back to their intraday highs. All ten economic sectors are in positive territory, led by a 1.6% gain in financials.
Airlines are posting a strong gain of 5.0%. The sector is benefiting from continued talk of consolidation within the industry and a 3.0% slide in crude oil prices.DJ30 +64.62 NASDAQ +20.42 SP500 +13.55 NASDAQ Dec/Adv/Vol 1112/1833/2.42 bln NYSE Dec/Adv/Vol 773/2356/1.18 bln
2:30 pm : The stock market continues to make gains, with relative strength in financials (+1.3%). Within the sector, thrifts & mortgages (+4.2%) and a variety of real estate investment trusts are providing leadership.
General Motors (GM 28.59, +0.38) reported January North America sales rose 2.1%, more than Wall Street's expectation of a 1.9% decline. GM has outperformed the market this year, posting a gain of 14.9% compared to the S&P's 5.4% decline.DJ30 +55.44 NASDAQ +13.46 SP500 +11.11 NASDAQ Dec/Adv/Vol 1197/1733/2.29 bln NYSE Dec/Adv/Vol 913/2198/1.08 bln
2:00 pm : The major indices are slowly drifting higher, but remain off their highs.
379 stocks in the S&P 500 are posting a gain. Yahoo! (YHOO 28.43, +9.25) leads the way after soaring 48%, but is still trading 9% below Microsoft's (MSFT 30.44, -2.16) offer price of $31 per share. On a related note, Microsoft is the main laggard, followed by Google (GOOG 520.13, -44.17)DJ30 +18.05 NASDAQ +6.40 SP500 +7.06 NASDAQ Dec/Adv/Vol 1212/1709/2.15 bln NYSE Dec/Adv/Vol 890/2112/1.00 bln
1:25 pm : The three major indices are back in the green due to a modest pickup in broad-based buying interest.
New 52-week highs outpace new lows by 4-to-1 on the NYSE, and advancers outpace decliners by 2-to-1. Advancers outweigh decliners by this margin thanks to strength in small-caps and mid-cap stocks.
On the Nasdaq, new 52-week lows outpace new highs by 5-to-3, and advancers outpace decliners by 3-to-2.DJ30 +23.17 NASDAQ +4.54 R2K +1.1% SP400 +1.3% SP500 +6.77 NASDAQ Dec/Adv/Vol 1251/1627/1.97 mln NYSE Dec/Adv/Vol 1050/2026/898 mln
1:00 pm : The Dow has joined the Nasdaq in the red. The major indices are trading near the unchanged mark.
There have been several headlines regarding the financial industry (+0.5%) since the last update. The Massachusetts Secretary of State is bringing fraud and misrepresentation charges against Merrill Lynch (MER 56.55, +0.19), according to the Wall Street Journal. The city of Springfield claims Merrill did not properly inform it of the risky nature of CDOs it was sold. Yesterday, Merrill bought back the CDOs for the same price it sold them for even though they plunged in value.
Meanwhile, CNBC reports there are at least two consortiums looking to help bond insurers. Fitch has placed $139 billion in U.S. subprime residential mortgage backed securities on watch negative due to worsening mortgage performance, according to Reuters.DJ30 -14.63 NASDAQ -5.21 SP500 +2.41 NASDAQ Dec/Adv/Vol 1252/1610/1.86 bln NYSE Dec/Adv/Vol 989/2070/840 mln
12:30 pm : The major indices are trading in mixed fashion, with the Nasdaq in the red. It continues to be a volatile day of trade.
Motorola's (MOT 12.53, +1.03) stock is up a steep 9% after the company announced that it is exploring "structural and strategic realignment of its businesses to enhance shareholder value." This includes the company's struggling mobile devices unit. The stock was also upgraded to Buy from Hold at Citigroup. Despite this session's gains, the stock is still down 37.3% from its 52-week highs.DJ30 +14.23 NASDAQ -1.21 SP500 +5.79 NASDAQ Dec/Adv/Vol 1233/1621/1.72 bln NYSE Dec/Adv/Vol 932/2089/747 mln
12:00 pm : It has been a rollercoaster day of trading. The major indices have fluctuated on news of a major tech buyout and in response to a pair of mixed economic releases. The stock market has spent most of the session in positive territory and is currently holding onto a modest gain, but is well off its session high.
Microsoft (MSFT 30.62, -1.98) has offered to buy Yahoo! (YHOO 27.69, +8.51) for $44.6 billion in cash and stock. The $31 per share offer represents a 62% premium over Yahoo's Thursday closing price. Bloomberg.com reports it is the largest technology acquisition ever, beating KKR's $26 billion acquisition of First Data Corp in 2007. Yahoo's board is considering the deal. The market's response was positive, with futures spiking on the news.
The Justice Department is interested in looking at the "competitive effects" of the Microsoft and Yahoo! deal, according to Dow Jones. This report has had a slight negative effect on Yahoo's stock, and shares of Microsoft extended their decline.
On the economic front, the Dept. of Labor said January nonfarm payrolls fell by 17,000, lower than 70,000 reading economists expected. The number is not as bad at it seems, as December payrolls were revised higher to a gain of 82K from 18K. Also, the number is still less than recessionary levels, when monthly payrolls decline 150,000 to 200,000. The unemployment rate fell to 4.9%, which is less than the 5.0% reading economists expected. Stock futures fell on this report.
ISM Index, a national manufacturing survey, came in at 50.7, higher than December's reading of 48.4. The consensus estimate called for a lower reading of 47.3. This is some good news for the economy. Since the number is above 50, it indicates an expansion in manufacturing. The stock market rose to its highest level of the session following this report, but quickly pulled back.
Separately, the 8.6% decline in shares of Google (GOOG 515.97, -48.33) is weighing on the broader market. Google disappointed traders after its fourth quarter earnings came in at $4.43 per share, $0.02 short of the consensus estimate. Also weighing on the stock is speculation that Google will face increased competition if the Microsoft and Yahoo! deal closes.
Eight of the ten sectors are higher, led by materials (+1.5%) and utilities (+1.6%). Telecom (-0.3%) and tech (-0.3%) are the main laggards. DJ30 +24.27 NASDAQ +0.79 SP500 +6.77 NASDAQ Dec/Adv/Vol 1200/1627/1.58 mln NYSE Dec/Adv/Vol 974/2029/665 mln
11:35 am : The major indices are trading near the unchanged mark. Five of the ten sectors are now in the red, led by a slide in telecom (-0.6%) and tech (-0.5%).
Energy (+0.1%) is underperforming the broader market despite America's largest company by market cap, Exxon Mobil (XOM 86.22, +0.52), handily topping its earnings estimates. The company also reported the largest yearly profit of any company in U.S. history. The 1.7% slide in crude oil prices is weighing on the sector.DJ30 +6.83 NASDAQ -5.98 SP500 +3.43 NASDAQ Dec/Adv/Vol 1268/1517/1.44 bln NYSE Dec/Adv/Vol 1106/1876/585 mln
11:00 am : There has been rollercoaster action in the first hour and a half of trade. The major indices are now trading in mixed fashion, after a broad-based decline, on no specific news item.
The Justice Department is interested in looking at the "competitive effects" of the Microsoft (MSFT 30.54, -2.06) and Yahoo! (YHOO 27.42, +8.24) deal, according to Dow Jones. This report has had a slight negative effect on Yahoo's stock, and shares of Microsoft have dipped. Tech is now down 0.6%
Moody's, a ratings company, said it expects increased losses and possible downgrades for mortgage insurers, according to Reuters. MBIA (MBI 15.40, -0.10) and Ambac (ABK 12.34, +0.70) dropped around the time the news hit the wires. Both companies were sharply higher in earlier trade on a CNBC report that a group of banks was working on a bond insurer plan.DJ30 -12.76 NASDAQ -9.60 SP500 +1.59 NASDAQ Dec/Adv/Vol 1137/1569/1.15 bln NYSE Dec/Adv/Vol 929/1982/417 mln
10:30 am : Stocks climb higher and then go on the defensive. The stock market is holding onto modest gains, but is off its highs when the S&P surpassed a 1% gain.
Despite the positive reaction to Microsoft's (MSFT 30.99, -1.61) $44.6 billion offer for Yahoo! (YAHOO 28.29, +9.11), tech (+0.2%) is underperforming the broader market. Google (GOOG 519.44, -44.86) is the largest drag, as its stock is trading 8% lower after traders responded negatively to its earnings report. Google's fourth quarter earnings came in at $4.43 per share, $0.02 short of the consensus estimate. Also weighing on the stock is speculation that Google will face increased competition if the Microsoft and Yahoo! deal closes.DJ30 +50.64 NASDAQ +12.85 SP500 +8.21 NASDAQ Dec/Adv/Vol 718/1887/850 mln NYSE Dec/Adv/Vol 529/2329/275 mln
10:05 am : Just hitting the wires, the ISM Index, a national manufacturing survey, came in at 50.7, higher than December's reading of 48.4. The consensus estimate called for a lower reading of 47.3. Since the number is above 50, it indicates an expansion in manufacturing.
The stock market had already extended its gains, and then got a modest lift on the ISM report. Nine of the ten sectors are higher. Materials is posting the largest advance of 1.8%, with financials coming in second with a 1.0% gain. Telecom (flat) is underperforming on a relative basis.DJ30 +65.76 NASDAQ +14.99 SP500 +10.91 NASDAQ Dec/Adv/Vol 871/1527/457 mln NYSE Dec/Adv/Vol 958/1750/131 mln
09:35 am : It was volatile morning, although one wouldn't know by the flat to slightly higher opening to the trading day.
Futures pointed to a uninspired open and then jumped on news that Microsoft (MSFT) has proposed to buy Yahoo! (YHOO) for $44.6 billion in cash and stock, or $31 per share. The offer represents a 62% premium over Yahoo!’s closing price yesterday.
The positive sentiment was short-lived, as trader were disappointed by a lower than expected jobs reading. The Dept. of Labor said January nonfarm payrolls fell by 17,000, lower than 70,000 reading economists expected. The number is not as bad at it seems, as December payrolls were revised higher to a gain of 82K from 18K. Also, the number is still less than recessionary levels, when monthly payrolls decline 150,000 to 200,000. The unemployment rate fell to 4.9%, which is less than the 5.0% reading economists expected. DJ30 +7.64 NASDAQ +6.27 SP500 +2.41
09:15 am : S&P futures vs fair value: -2.4. Nasdaq futures vs fair value: +8.0. S&P 500 futures now suggest a slightly lower start.
09:01 am : S&P futures vs fair value: flat. Nasdaq futures vs fair value: +3.5. After some choppy action, S&P 500 futures are pointing to a flat start, as traders digest the jobs data. Nasdaq futures are holding a slight gain, but are well off their session high. OPEC decided to keep oil production targets unchanged earlier today. The cartel said there is plenty of oil and expressed concerns that an U.S economic slowdown will lead to lower demand. Crude oil is trading down 0.5% to $91.25 per barrel.
08:35 am : S&P futures vs fair value: +5.9. Nasdaq futures vs fair value: +11.3. Futures drop on a worse than expected jobs report, but still point to a higher start. The Dept. of labor said Jan. nonfarm payrolls fell by 17K, economists expected payrolls to increase by 70K. December payrolls were revised higher to a gain of 82K from 18K, which is helping to offset some disappointment. The unemployment rate fell to 4.9%, which is less than the 5.0% reading economists expected. A CNBC reported earlier this morning that a source told him that eight banks have formed a consortium to work on a rescue plan for bond insurers. In earnings news, Exxon-Mobil (XOM) beat expectations, reportedly making the largest annual profit it in U.S. company history.
08:00 am : S&P futures vs fair value: +15.5. Nasdaq futures vs fair value: +22.5. Futures were pointing to a sluggish start after Google (GOOG) reported earnings that disappointed traders and market participants awaited the jobs report at 8:30 ET. Futures then spiked around 6:30 ET, and are now pointing to a significantly higher start, on news that Microsoft (MSFT) has proposed to buy Yahoo! (YHOO) for $44.6 billion in cash and stock. The $31 per share offer represents a 62% premium over Yahoo!’s closing price. Bloomberg.com reports it is the largest technology acquisition ever, beating KKR’s $26 billion acquisition of First Data Corp in 2007. There may be more movement in futures trade, with the jobs report roughly 30 minutes away. Economists expect a 70,000 increase in nonfarm payrolls and for the unemployment rate to hold steady at 5.0%.
06:10 am : S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: -4.0.
06:09 am : FTSE...5957.70...+77.90...+1.3%. DAX...6925.51...+73.62...+1.1%.
06:09 am : Nikkei...13497.16...-95.31...-0.7%. Hang Seng...24123.58...+667.84...+2.9%.
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