Market Update 080304 http://biz.yahoo.com/mu/update.html 4:30 pm : There wasn't any shortage of news on Tuesday. The problem for the stock market is that most of it seemed to skew to the negative side of things.
First and foremost, investors were rattled by accusations from the head of Dubai International Group that Citigroup (C 22.10, -0.99) will need a lot more capital from outside investors than it has already received. Citigroup's stock dropped as much as 8.0% in the wake of the accusation and weighed heavily on the financial sector along with the investment banks, which again saw another round of estimate cuts.
Separately, a warning from Intel (INTC 20.00, -0.01) that it was revising its first quarter gross margin rate guidance downward due to lower than expected NAND flash memory pricing also cast a pall on the broader market in the early going.
Selling activity intensified, though, after Fed Chairman Bernanke told the Independent Community Bankers of America that defaults and foreclosures in the housing market were likely to continue to increase. To help stem "preventable foreclosures," the Fed Chairman suggested banks consider writing down the principal amount on mortgage loans as a means of restoring equity for borrowers.
Bernanke's suggestion didn't help the financial sector as participants viewed it as a reminder that further write-downs look to be in store for the sector. Comments form a bevy of other Fed officials Tuesday, including Fed Vice Chairman Kohn, didn't do anything to lift the market's mood either.
The major indices went on to set new lows for the session around 14:00 ET. For the Dow, Nasdaq and S&P, that translated to losses of 226, 37 and 24 points, respectively.
As one can see from the final standings, those losses were pared considerably in late-afternoon trading.
Strikingly, a sell-off in commodity prices that resulted in a 1.9% decline in the CRB Index didn't act as the primary catalyst for the recovery. That honor in our estimation goes to Cisco (CSCO 24.29, -0.11) whose CEO said in a presentation that he's even more comfortable with the company's long-term guidance than he was following the last earnings conference call. Furthermore, he indicated that he believed the U.S. downturn would be short and shallow.
The comments from Cisco CEO John Chambers sparked a broad-based bargain hunting rally in the technology sector that favored a number of beaten up companies like Intel, Amazon.com (AMZN 65.34, +2.91), Microsoft (MSFT 27.59, +0.60), and Apple (AAPL 124.62, +2.89). Separately, Apple told investors that it isn't planning to start a dividend or to buy back stock right now and that it expects to hit its 10 million iPhone sales target in 2008.
Notably, the financial sector participated in the late recovery effort, also on some bargain hunting activity that kicked in after the sector came within a hair of revisiting its January low earlier in the session. In addition, the umpteenth report that an Ambac Financial (ABK 10.72, +0.78) bailout deal was near aided in the sector's recovery try. The financial sector, down as much as 3.3% earlier in the day, closed with a decline of 0.8%. DJ30 -45.10 NASDAQ +1.68 NQ100 +0.6% R2K -0.5% SP400 -0.6% SP500 -4.59 NASDAQ Dec/Adv/Vol 1786/1138/2.64 bln NYSE Dec/Adv/Vol 2120/1027/1.78 bln
3:30 pm : Stocks have trended higher and moved into their best levels since morning. The three major indices remain in negative territory, but the Nasdaq briefly made its way into the green.
Financials (-0.9%) have moved higher to their best level of the session as market participants await an announcement detailing a bailout plan for Ambac (ABK 10.78, +0.84).
The tech sector (+0.1%) staged an upswing of its own when Cisco's (CSCO 24.17 -0.23) CEO stated at a tech conference that he expects long-term growth to range from 12% to 17%. Tech had been down as much as 1.6%.DJ30 -94.35 NASDAQ -6.05 SP500 -8.75 NASDAQ Dec/Adv/Vol 1876/1029/2.04 bln NYSE Dec/Adv/Vol 2233/900/1.28 bln
3:00 pm : Stocks attempted to fight off afternoon selling pressure as the financial sector (-1.5%) was buoyed by word that Ambac (ABK 10.73, +0.79) may soon benefit from a bailout plan. CNBC reported the deal is progressing, but not complete. Uncertainty surrounding the deal caused the upswing to fade.
Crude settled $2.79 lower at $99.67 per barrel on the Nymex. The commodity had closed above the $100 per barrel mark in each of the last three sessions.
Crude's downturn undercut the energy sector (-2.5%) this session, making it one of the day's primary laggards. Exxon Mobil (XOM 86.01, -1.74) is the session's most influential laggard.DJ30 -163.72 NASDAQ -25.93 SP500 -16.62 NASDAQ Dec/Adv/Vol 2124/755/1.76 bln NYSE Dec/Adv/Vol 2538/588/1.21 bln
2:30 pm : Stocks recently took out fresh session lows, but have since come out of their lull. Each major index remains more than 1.0% for the worse, however.
Selling pressure in the financial sector (-2.0%) has eased a bit, giving support to the market's recent upturn. Still, the sector still remains largely out of favor. DJ30 -197.58 NASDAQ -29.82 SP500 -19.40 NASDAQ Dec/Adv/Vol 2196/673/1.59 bln NYSE Dec/Adv/Vol 2557/561/1.00 bln
2:00 pm : Stocks continue to move across negative territory in choppy fashion. Negative comments from Fed Chairman Bernanke, Fed Vice Chairman Kohn, and Fed Governor Mishkin have weighed on market participants' sentiment throughout trading.
Fed funds futures are currently pricing in an 80% probability the FOMC will cut the fed funds rate 75 basis points to 2.25% when it meets March 18. Yesterday the markets were pricing in a 74% probability that the fed funds rate would be trimmed to 2.25%.
That prediction is putting further weight on the dollar index, which is down 0.1% to 73.6 this session.DJ30 -184.96 NASDAQ -29.94 SP500 -19.11 NASDAQ Dec/Adv/Vol 2141/704/1.44 bln NYSE Dec/Adv/Vol 2352/739/882 mln
1:30 pm : Stocks took out fresh session lows after Fed Governor Mishkin offered a pessimistic outlook on the U.S. economy. Each of the major indices has since pared a portion of its losses.
The session's negative tone remains evident as sellers outpace buyers on the NYSE by nearly 4-to-1.
Of the 30 Dow Jones members, only Johnson & Johnson (JNJ 62.49, +0.26) and Coca-Cola (KO 59.38, +0.36) are sporting gains, though muted.DJ30 -153.95 NASDAQ -24.15 SP500 -15.42 NASDAQ Dec/Adv/Vol 2118/696/1.29 bln NYSE Dec/Adv/Vol 2430/643/807 mln
1:00 pm : The market has made a push lower after Fed Governor Mishkin stated he sees significant downside risk to the economy. However, rate cuts and the fiscal stimulus package should improve the odds of avoiding more adverse outcomes. Mishkin also expects unemployment to rise further.
Selling pressure in the financial sector (-2.2%) has waned and energy (-2.5%) has become a more influential under-performer. Citigroup (C 21.97, -1.12) remains one of the day's primary laggards, but the stock has managed to reclaim some of its losses. Exxon Mobil (XOM 86.14, -1.61) is now the day's most influential laggard.
The utilities sector (+0.4%) continues to outperform the broader market. Of the ten major economic sectors within the S&P 500, it is the only to post a gain this session. The Dow Jones Utility Average is also trading higher (+0.4%).DJ30 -178.78 NASDAQ -28.60 SP500 -18.16 NASDAQ Dec/Adv/Vol 1995/805/1.18 bln NYSE Dec/Adv/Vol 2273/776/729 mln
12:30 pm : The broader market remains off its session low, but still 1.1% lower this session. Energy (-2.3%) and financials (-2.0%) continue to weigh on the session's performance as underperformers.
Crude prices have fallen below the $100-mark. The commodity is currently trading 2.4% lower at $99.99 per barrel.DJ30 -145.48 NASDAQ -23.78 SP500 -14.96 NASDAQ Dec/Adv/Vol 2072/708/1.03 bln NYSE Dec/Adv/Vol 2318/719/637 mln
12:00 pm : The stock market opened on a down note after pessimistic comments from Fed Chairman Bernanke. Negative news regarding Intel (INTC 19.68, -0.33) and Citigroup (C 21.63, -1.46) also bolstered bearish behavior before the opening bell. A negative assessment of the banking system from Fed Vice Chairman Kohn fueled selling interest after the market's open.
Bernanke stated at a community bankers convention that mortgage delinquencies and foreclosures will likely continue and supply-demand imbalances will likely lead to further price declines in the housing industry. Kohn noted in written testimony to the Senate Banking Committee that the banking system faces serious challenges. However, Kohn also added the system remains in sound overall condition.
The comments from the Fed officials weighed on the thrifts & mortgage industry (-5.9%) as well as the other diversified financial services industry (-4.0%).
News that Intel trimmed its first quarter gross profit margin weighed on broader sentiment during pre-market trading. The company cited lower prices for NAND memory chips as reason for the margin reduction.
Citigroup was sent to a new 52-week low in early trading after market participants considered pessimistic comments from Dubai International Capital. A member of the agency stated that Citigroup will likely need additional capital.
The confluence of negative commentary has pushed the financial sector (-2.4%) lower. Though the sector is currently off its session low, it remains a relative laggard.DJ30 -144.50 NASDAQ -25.30 SP500 -15.45 NASDAQ Dec/Adv/Vol 2086/673/902 mln NYSE Dec/Adv/Vol 2289/699/519 mln
11:30 am : Stocks have curbed their downturn and are now off the session's worst levels. Still, the financial sector (-2.5%) continues to weigh on the broader market, though it has stemmed previous losses.
Within the S&P 500, Citigroup (C 21.49, -1.60), Bank of America (BAC 38.18, -1.00), and JP Morgan Chase (JPM 38.51, -1.31) are the three most influential laggards this session. Citigroup, for its part, hit a new 52-week low earlier this morning.DJ30 -148.17 NASDAQ -26.92 SP500 -16.05 NASDAQ Dec/Adv/Vol 2112/616/713 mln NYSE Dec/Adv/Vol 2299/663/399 mln
11:00 am : The major indices have fallen to fresh session lows due to broad based weakness. All three of the major indices are posting losses in excess of 1.0%.
Financials (-3.0%), energy (-1.7%), technology (-1.2%), and telecom (-2.4%) are all trading at their worst levels of the morning.
Utilities (+1.4%) remains the only sector in favor. The sector is being led by Exelon (EXC 80.02, +2.47) for the second day in a row.DJ30 -131.56 NASDAQ -23.96 SP500 -14.50 NASDAQ Dec/Adv/Vol 1949/668/551 mln NYSE Dec/Adv/Vol 1986/883/271 mln
10:30 am : Negative sentiment persists in the early going. The major indices were trending higher, but have since regressed.
Fed Vice Chairman Kohn stated the U.S. banking system faces serious challenges, but overall conditions remain sound. His remarks followed pessimistic comments from Fed Chairman Bernanke regarding the housing industry.
The pessimism is seen strongest among diversified financial service companies (-3.0%) and thrifts & mortgage players (-4.0%). The two industry groups are the worst performers within the financial sector (-1.9%).DJ30 -93.05 NASDAQ -12.86 SP500 -8.54 NASDAQ Dec/Adv/Vol 1775/796/448 mln NYSE Dec/Adv 1688/1451
10:00 am : The major indices are trending upward, but remain in negative territory after a down start.
Shares of Intel (INTC 19.83, -0.18) are trading lower and weighing on fellow chip makers. The company reduced its first quarter gross margins forecast in response to lower NAND memory chip prices. Shares of SanDisk (SNDK 22.53, -0.52) and Mircon Technology (MU 6.84, -0.33) are also trading lower in conjunction with Intel's outlook.DJ30 -78.07 NASDAQ -12.35 SP500 -6.70 NASDAQ Dec/Adv/Vol 1634/800/249 mln NYSE Dec/Adv 1688/1451
09:40 am : The stock market has opened on a down note after pessimistic comments from Fed Chairman Bernanke and negative news regarding Intel (INTC 19.66, -0.35) and Citigroup (C 22.39, -0.70) weighed on early sentiment.
Bernanke indicated this morning that mortgage delinquencies and foreclosures will likely continue, while supply-demand imbalances indicate further price declines in housing.
Intel trimmed its first quarter gross margin forecast in response to lower NAND memory chip prices.
Dubai International Capital stated it believes Citigroup will likely need additional capital. DJ30 -118.04 NASDAQ -14.73 SP500 -10.98
09:15 am : S&P futures vs fair value: -12.7. Nasdaq futures vs fair value: -13.8. Fed Chairman Bernanke says mortgage delinquencies and foreclosures are likely to continue rising and that supply-demand imbalances suggest further price declines. Futures prices have taken a step lower.
09:00 am : S&P futures vs fair value: -9.3. Nasdaq futures vs fair value: -9.8. Futures prices continue to trade below fair value. A down open is still indicated, though not as low as initially shown.
08:31 am : S&P futures vs fair value: -8.7. Nasdaq futures vs fair value: -10.2. Futures remain below fair value, indicating a down open, but off their lows. A head member of Dubai International Capital believes Citigroup (C) will need more capital than it has already received.
08:00 am : S&P futures vs fair value: -9.0. Nasdaq futures vs fair value: -9.8. Pessimistic comments from Intel (INTC) are weighing on futures. The company sees gross margins compressing as a result of lower NAND memory chip prices. No major economic reports are due today.
06:17 am : S&P futures vs fair value: -7.3. Nasdaq futures vs fair value: -8.3.
06:16 am : FTSE...5796.60...-22.00...-0.4%. DAX...6632.46...-57.49...-0.9%.
06:16 am : Nikkei...12992.28...+0.10...0%. Hang Seng...23119.87...-465.10...-2.0%.
Market Data 
Markets 
AI
