Market Update 080207 http://biz.yahoo.com/mu/update.html 4:20 pm : It was another roller coaster day of trade on Thursday, with the S&P seeing a large 30 point swing from its session high to low. Stocks managed to finish the day with decent gains with eight of the ten economic sectors advancing.
January retailer same-store sales were mixed, but traders drove the stocks higher. Wal-Mart (WMT 49.84, +1.01) reported a lower than expected increase in sales, but market participants shrugged off the news. The S&P 500 Retailing Index closed up 3.7% with J.C. Penney (JCP 47.44, +3.72) gaining 8.5%. The strength in retailers helped send the consumer discretionary sector (+1.7%) into a leadership position.
Cisco (CSCO 23.38, +0.30) weighed on the market in morning trade even thought it met its earnings estimate. Cisco's stock was down as much as 5.6% after the company provided a cautious outlook. Specifically, the company said it expects third quarter revenue to increase 10%, which equates to $9.79 billion, less than the $10.19 billion analysts were expecting. However, Cisco managed to regain its losses, finishing the day with a modest gain. The tech sector (-0.2%) was a laggard despite Cisco's reversal.
PepsiCo (PEP 70.41, +3.68) provided support to the broader market after soaring 5.5%. The company reported fourth quarter earnings of $0.80 per share, topping estimates by a penny. Pepsi expects 2008 earnings to be at least $3.72, compared to the current estimate of $3.74. Pepsi led consumer staples 1.5% advance.
Financials outperformed (+1.7%), aided by strength in the specialized finance group (+6.8%). CME Group (528.01, +42.76) and NYMEX (94.95, +7.07) spiked higher after several brokerages said their sell-off yesterday was overdone. Yesterday, the stocks got pummeled on news that the Dept. of Justice believes that futures market firms controlling or owning clearing operations impedes competition.
On the economic front, there were 356K initial jobless claims for the week ended Feb. 2, lower than the previous reading of 378K. However, there were more claims than the 342K that economists expected. Claims have been choppy recently, but remain below typical recessionary levels.
December pending home sales fell 1.5% compared to the expected decline of 1.0%. Sales declined less than November's 3.0% drop. The release is from the National Association of Realtors, and measures signed contracts for existing homes. Despite the larger than expected drop, homebuilders (+1.6%) spiked on the data.
In overseas news, the Bank of England decided to cut rates by 25 basis points to 5.25% and the European Central Bank held rates steady at 4.00%. Both decisions were expected.
Historically low yields at the long end of the Treasury market prompted investors to avoid the most recent Treasury auction in favor of higher returns. The benchmark 10-year note fell 45/32 sending its yield up to 3.77%. The dollar was up a strong 0.97%. DJ30 +46.90 NASDAQ +14.28 NQ100 +0.7% R2K +1.5% SP400 +1.0% SP500 +10.46 NASDAQ Dec/Adv/Vol 1245/1707/2.99 bln NYSE Dec/Adv/Vol 1244/1888/1.62 bln
3:35 pm : Heading into the final half-hour of trading each of the major indices briefly fell into negative territory, but have returned to positive ground. The ten economic sectors are trading in mixed fashion after continued choppy action. Financials (+0.8%) and consumer discretionary stocks (+1.23%), which had led the session's earlier charge, have since pared their gains.
Separately, Moody's downgraded the credit rating of bond insurer XL Capital (XL 42.36, -1.61) from its AAA rating to A3. XL's shares have lost nearly half their value from their 52-week high. Shares of Ambac (ABK 10.84, -0.10) and MBIA (MBI 14.19, -0.09) have not been immediately impacted by the announcement. DJ30 +34.87 NASDAQ +12.00 SP500 +8.52 NASDAQ Dec/Adv/Vol 1465/1465/2.49 bln NYSE Dec/Adv/Vol 1382/1719/1.29 bln
3:00 pm : The major indices continue to retreat amid broad-based selling. A noticeable pullback is occurring among tech stocks (-0.6%), while the Dow is trading in negative territory near the unchanged mark. Weighing on the Dow and the tech sector is the strong underperformance of Hewlett-Packard (HPQ 40.96, -1.20), which is down nearly 2.9%.
Within the tech sector, the electronic equipment manufacturing industry has lost approximately 3.6%.DJ30 -8.62 NASDAQ +5.64 SP500 +4.80 NASDAQ Dec/Adv/Vol 1270/1646/2.22 bln NYSE Dec/Adv/Vol 1131/1963/1.13 bln
2:30 pm : The stock market hit a session high, but has since retreated, while the 10-year Treasury has hit a session low. The Dow was up 132 points at its highest level, but those gains have since been significantly reduced.
Historically low yields at the long end of the Treasury market prompted investors to avoid the most recent Treasury auction in favor of higher returns. The benchmark 10-year note has fallen 36 ticks to its session low, lifting its yield to 3.73%.DJ30 +84.6 NASDAQ 24.8 SP500 14.4 NASDAQ Dec/Adv/Vol 1099/1807/1.99 bln NYSE Dec/Adv/Vol 950/2141/1.03 bln
2:00 pm : In the past half-hour the major indices hit fresh session highs with nine of ten sectors in the green. Financials (+2.2%) and discretionary (+2.5%) are pacing the advance. The utilities (-0.3%) sector stands alone in the red.
A Dow Jones report that Senate Democrats have agreed to limit additions to the fiscal stimulus package may be providing support for the stock market's recent advance.DJ30 +93.89 NASDAQ +30.25 SP500 +16.90 NASDAQ Dec/Adv/Vol 1320/1554/1.76 bln NYSE Dec/Adv/Vol 1218/1849/904 mln
1:30 pm : After some choppy action the major indices are back near their best levels of the session. Treasuries have seen an increase in selling interest after a poor showing during a Treasury auction. The 10-year note is down 36 ticks, sending its yield up to 3.70%.
Dallas Fed President Fisher said the Federal Reserve is facing unprecedented inflationary forces from global demand for commodities. He noted the Fed must be careful to add the right amount of stimulus without juicing up inflation. As mentioned earlier, Fisher was the only FOMC member that voted against the recent rate cut, preferring no change, so his hawkish comments are no surprise.DJ30 +41.22 NASDAQ +17.79 SP500 +10.09 NASDAQ Dec/Adv/Vol 1319/1534/1.62 NYSE Dec/Adv/Vol 1309/1733/841 mln
1:00 pm : The major indices are trading near their best levels of the session after a broad-based rebound. Only utilities (-0.6%) and health care (-0.2%) remain in the red.
Dallas Fed President Fisher will speak on economic stability at 13:00 ET. Fisher was the only FOMC member that dissented at the Jan. 30 meeting. He wanted no change to the fed funds rate, compared with the 50 basis point cut that was enacted.
PepsiCo (PEP 69.84, +3.12), Bank of America (BAC 43.48, +1.15) and CME Group (CME 541.90, +56.66) are providing leadership to the S&P 500. Of the 220 stocks that are lower, the main laggards are Hewlett-Packard (HPQ 40.95, -1.22), Prudential Financial (PRU 70.32, -7.09) and AIG (AIG 51.30, -0.80)DJ30 +44.30 NASDAQ +12.89 SP500 +9.76 NASDAQ Dec/Adv/Vol 1364/1469/1.46 bln NYSE Dec/Adv/Vol 1282/1744/749 mln
12:30 pm : Stocks are holding near the unchanged mark, in their steadiest trading since the opening bell. Treasuries are seeing some selling interest, with the 10-year note sliding 13 ticks.
All ten of the major economic sectors are off their lows. Financials (+1.0%) have seen some relative buying interest, which has sent the sector into the leadership position.DJ30 -11.71 NASDAQ -0.85 SP500 +2.39 NASDAQ Dec/Adv/Vol 1486/1339/1.34 bln NYSE Dec/Adv/Vol 1535/1456/678 mln
12:00 pm : It has been a whipsaw day of trading up to the midday point. The major indices are currently trading near the flat line. The S&P 500 has been up as much as 0.8% and down as much as 0.7%.
January retailer same-store sales have been mixed. Wal-Mart (WMT 49.05,+0.22) reported a lower than expected increase in sales, but is still posting a slight gain. Costco (64.06, +0.35) topped its expectations. The S&P 500 Retailing Index is up 2.3% with J.C. Penney (JCP 47.38, +3.66) soaring 8.3%.
Cisco (CSCO 22.82, -0.26) is off its lows but continues to weigh on the Nasdaq Composite. Cisco reported earnings that met expectations, but its stock is under pressure after the company provided a cautious outlook. Specifically, it said it expects third quarter revenue to increase 10%, which equates to $9.79 billion, less than the $10.19 billion analysts were expecting.
On the economic front, there were 356K initial jobless claims for the week ended Feb. 2, lower than the previous reading of 378K. However, there were more claims than the 342K that economists expected. Claims have been choppy recently, but remain below typical recessionary levels.
December pending home sales fell 1.5% compared to the expected decline of 1.0%. Sales declined less than November's 3.0% drop. The release is from the National Association of Realtors, and measures signed contracts for existing homes. Despite the larger than expected drop, homebuilders (+0.8%) have shown strength this session.
Six of the ten sectors are in the red, led by declines in tech (-1.0%) and utilities (-1.0%). Consumer discretionary (+0.8%) and consumer staples (+0.8%) are outperforming.
Financials are outperforming (+0.6%) on a relative basis, aided by strength in the specialized finance group (+6.4%). CME Group (528.35, +43.10) and NYMEX (95.36, +7.48) have rebounded after several brokerages said their sell-off yesterday was overdone. Yesterday, the stocks got pummeled on news that the Dept. of Justice believes that futures market firms controlling or owning clearing operations impedes competition.
In overseas news, the Bank of England decided to cut rates by 25 basis points to 5.25% and the European Central Bank held rates steady at 4.00%. Both decisions were expected. DJ30 -12.44 NASDAQ -3.15 SP500 +1.58 NASDAQ Dec/Adv/Vol 1584/1212/1.18 bln NYSE Dec/Adv/Vol 1619/1355/587 mln
11:30 am : The major indices are posting modest losses, but given the swings this session that may change in quick fashion. The Nasdaq is underperforming as tech slides 1.3%.
Retailers (+2.0%) continue to post strong gains despite Wal-Mart (WMT 48.84, +0.01), the largest retailer, posting disappointing January same-store sales results. J.C. Penney (JCP 48.04, +4.32) is showing significant strength. The company's sales declined 1.9%, less than the expected decline of 6.1%.DJ30 -37.56 NASDAQ -10.85 SP500 -2.06 NASDAQ Dec/Adv/Vol 1571/1186/1.05 bln NYSE Dec/Adv/Vol 1571/1186/503 mln
11:00 am : Stocks fall back to the unchanged mark. There has been roller coaster trade during the first 90 minutes of the session. U.S. Treasury Secretary Paulson reiterated that he does not believe the U.S. economy is in recession, according to Reuters.
Shares of bond insurer Ambac (ABK 11.20, +0.26) spiked on news that Bank of America (BAC 42.87, +0.54) has a 7.1% stake in the company.
PepsiCo (PEP 70.01, +3.28) is managing to show strength. The company reported fourth quarter earnings of $0.80 per share, topping estimates by a penny. The company expects 2008 earnings to be at least $3.72, compared to the current estimate of $3.74.DJ30 -1.63 NASDAQ -4.34 SP500 +1.79 NASDAQ Dec/Adv/Vol 1429/1248/859 mln NYSE Dec/Adv/Vol 1239/1651/379 mln
10:30 am : Stocks rebound into positive territory after the stock market tested last week's lows. Financials (+1.1%) are leading the rebound with specialized finance pacing the advance with a 6.1% gain. Consumer discretionary (+1.3%) is also showing strength as retailers gain 2.5%. Action has been choppy this morning.
Released at 10:00 ET, December pending home sales fell 1.5%, compared to the expected decline of 1.0%. Despite the larger than expected decline, homebuilders (+3.3%) spiked on the news.DJ30 +23.49 NASDAQ +8.11 SP500 +5.41 NASDAQ Dec/Adv/Vol 1185/1377/564 mln NYSE Dec/Adv/Vol 1310/1511/232 mln
09:55 am : Stocks retreat with eight of the ten economic sectors trending lower. Tech is the main laggard due to Cisco (CSCO 22.43, -0.65). Consumer discretionary (+0.3%) and consumer staples (+0.5%) are outperforming, partly due to strength in retailers (+0.9%)
Specialized finance (+4.4%) is the best performing industry group. It got hammered yesterday on news that the Dept. of Justice believes futures exchanges owning or controlling clearing operations is anti-competitive. Shares of CME Group (CME 516.70, +31.45) and NYMEX (NMX 94.76, +6.88) have rebounded after several brokerages said that the companies were oversold. Specialized finance is the only positive industry group within the financial sector (-0.6%).DJ30 -78.93 NASDAQ -26.10 SP500 -9.31 NASDAQ Dec/Adv/Vol 1130/1157/195 mln
09:40 am : The stock market opened much better than futures suggested as the S&P 500 trades at the unchanged mark. The Nasdaq Composite is underperforming largely due to weakness in Cisco (CSCO). Cisco reported earnings that met expectations, but its stock is under pressure after the company provided a cautious outlook. Specifically, it said it expects revenue to grow by 10%, which equates to $9.79 billion, less than the $10.19 billion analysts were expecting.
The Nasdaq was also a laggard yesterday, closing at new 52-week low, and hitting "bear market" territory. A bear market is typically defined as a 20% retreat from a 52-week high.DJ30 -2.60 NASDAQ -8.13 SP500 +0.42
09:15 am : S&P futures vs fair value: -7.6. Nasdaq futures vs fair value: -22.0. Stock futures climb off their worst levels, but still point to a negative start.
09:00 am : S&P futures vs fair value: -11.0. Nasdaq futures vs fair value: -28.8. Futures continue to point to a sharply lower start to the trading day. Crude oil is down 0.9% to $86.36. According to reports, the fiscal stimulus plan has stalled in the Senate due to conflicting views among Republicans and Democrats.
08:31 am : S&P futures vs fair value: -12.0. Nasdaq futures vs fair value: -31.3. Futures had shed a few points in the past half hour and then fall lower immediately after the release of the weekly unemployment claims. There were 356K initial jobless claims for the week ended Feb. 2, lower than the previous reading of 378K. Economists expected 342K claims. In corporate news, Target's (TGT) January same-store sales slipped by a larger than expected amount.
08:00 am : S&P futures vs fair value: -9.6. Nasdaq futures vs fair value: -28.5. Stock futures point to a negative start. The Nasdaq 100 is set to underperform due to a disappointing outlook from Cisco (CSCO). January same-store sales have not been strong. Wal-Mart (WMT) reported a smaller increase than expected, although Costco (COST) managed to top its estimates. The Bank of England decided to cut rates by 25 basis points to 5.25% and the European Central Bank held rates steady at 4.00%. The banks' decisions were expected. Bond insurer MBIA (MBI) is getting a boost on news of a $750 million common stock offering that may help the company retain its AAA rating.
06:29 am : S&P futures vs fair value: +0.4. Nasdaq futures vs fair value: -16.5.
06:16 am : S&P futures vs fair value: +0.4. Nasdaq futures vs fair value: -16.5.
06:15 am : FTSE...5835.20...-40.20...-0.7%. DAX...6781.48...-66.03...-1.0%.
06:15 am : Nikkei...13207.15...+107.91...+0.8%. Hang Seng...Holiday.........
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