Market Update 080513 http://biz.yahoo.com/mu/update.html 4:25 pm : The stock market traded in a tight range on Tuesday, with stocks finally settling with a slight loss near the unchanged mark after being down as much as 0.5% and up as much as 0.2%. Positive developments regarding two stalled acquisitions and better-than-expected retail sales data helped offset concerns regarding financials, Hewlett-Packard's (HPQ 44.27, -2.56) latest purchase, and weakness in shares of the world's largest retailer.
In corporate news, Wal-Mart (WMT 56.65, -1.37) posted solid quarterly earnings, topping expectations by one cent. Shares were under pressure, though, as traders decided to take profits after the company provided guidance that left more room for disappointment than a positive surprise. Wal-Mart is still handily outperforming this year, with a 19% gain.
Hewlett-Packard preannounced second quarter earnings that were above expectations, and raised its full-year estimate. However, shares took a steep 5.5% drop on fears that HP is overpaying for its $13.9 billion, or $25 per share, acquisition of Electronic Data Systems (EDS 24.34, +0.26).
Financials (-1.4%) acted as the major drag on the broader market. Oppenheimer cut its earnings estimates for full year 2008 and 2009 on Goldman Sachs (GS 190.33, -1.75), Merrill Lynch (MER 48.26, -0.89), Lehman Brothers (LEH 42.95, -1.60) and Morgan Stanley (MS 46.61, -1.04). Oppenheimer believes the outlook for financials is far bleaker than reflected in the market.
Rating agency Moody's said that incurred portfolio losses at MBIA (MBI 9.32, -0.53) and Ambac (ABK 4.00, -0.33) are now higher than the agency's prior expected-case loss estimates. Moody's is concerned over the capitalization ratios of bond insurers MBIA and Ambac relative to the Aaa benchmark. The news sent the financial sector to session lows.
The stock market, however, managed to limit its losses, as several items spurred some modest buying interest.
Yahoo! (YHOO 26.56, +1.30) posted a strong 5% gain on a CNBC report activist investor Carl Icahn is mulling a Yahoo proxy fight. CNBC said that if Icahn were to win three to four board seats, he would be able to force a deal with Microsoft (MSFT 29.78, -0.10) assuming Microsoft was still willing.
Clear Channel (CCU 34.30, +1.43) has reached a settlement against the banks it sued, according to CNBC. The financiers will now fund Clear Channel's transition to a private company at $36 per share.
The energy sector provided leadership with a gain of 1.2%. Crude oil spiked to an all-time high of $126.98 per barrel, before settling with a gain of 1.3% at $125.85.
In economic news, April retail sales, excluding autos, rose 0.5%, which topped the median estimate that called for growth of 0.2%. This advance was not due to a spike in gasoline costs either -- gasoline station sales actually fell 0.4%. When including autos, retail sales fell 0.2%, which matched expectations. These data indicate sluggish economic growth, not a recession -- as Briefing.com has been arguing all along.DJ30 -44.13 NASDAQ +6.63 NQ100 +0.2% R2K +0.5% SP400 +0.6% SP500 -0.54 NASDAQ Dec/Adv/Vol 1359/1461/1.89 bln NYSE Dec/Adv/Vol 1438/1657/1.21 bln
3:30 pm : The stock market dips into the red after some negative news regarding bond insurers is released, but is holding up reasonably well. Meanwhile, Treasuries are out of favor, with the 10-year note shedding 27 ticks.
Rating agency Moody's said that incurred portfolio losses at MBIA (MBI 9.13, -0.72) and Ambac (ABK 3.97, -0.36) are now higher than the agency's prior expected-case loss estimates, which has increased concerns over the bond insurer's capitalization levels relative to the Aaa benchmark.
Yahoo! (YHOO 26.60, +1.34) is posting a solid 5.3% gain on a CNBC report activist investor Carl Icahn is mulling a Yahoo proxy fight. CNBC reported that if Icahn were to win three to four board seats, he would be able to force a deal with Microsoft (MSFT 29.83, -0.05), if Microsoft was willing.DJ30 -43.97 NASDAQ +5.12 SP500 -0.94 NASDAQ Dec/Adv/Vol 1449/1387/1.55 bln NYSE Dec/Adv/Vol 1497/1588/933 mln
3:00 pm : The stock market jumps into the green, as CNBC reports that Clear Channel (CCU 34.29, +1.42) and the banks have reached a settlement, with the deal to be funded at $36 per share.
The S&P 500 is now split down the middle, with roughly 50% of stocks posting a gain, and 50% posting a loss. The largest percent losers are Hewlett-Packard (HPQ 44.56, -2.27), down 4.9%, and TJX Companies (TJX 30.65, -1.49), down 4.6%. The largest percent gainers are Fluor (FLR 192.79, +26.43), up 16%, and Constellation Brands (STZ 20.44, +1.62), up 8.6%.
The S&P 500 Retailing Index is underperforming with a loss of 0.5% after posting a gain of more than 2% yesterday. TJX Companies is showing weakness after traders decided to take profits following the off-price department store's in-line earnings report.DJ30 -26.56 NASDAQ +5.55 SP500 +1.28 NASDAQ Dec/Adv/Vol 1436/1356/1.36 bln NYSE Dec/Adv/Vol 1452/1600/831 mln
2:30 pm : The Nasdaq and S&P 500 briefly trade in positive territory before slipping back into the red. The telecom sector has not been able to attract much buying interest as it trades at its session low with a loss of 0.1%, after being a leader in the early-going with a 1% advance.DJ30 -55.04 NASDAQ -0.37 SP500 -1.50 NASDAQ Dec/Adv/Vol 1470/1325/1.25 bln NYSE Dec/Adv/Vol 1536/1518/766 mln
2:00 pm : The stock market continues to pare its losses, as it trades just below the unchanged mark. The recovery effort has been broad-based.
Comments from several Fed officials are hitting the wires. San Francisco Fed President Yellen said inflation is on the "high side" but expects it to moderate, noting she doubts the U.S. is facing a stagflation environment. Kansas City Fed President Hoenig said inflation is at unacceptable levels, and Dallas Fed President Fisher said when the economy turns, inflation may be higher than wanted.
Meanwhile, CNBC reported that a Clear Channel (CCU 33.69, +0.82) settlement could come this afternoon, with the banks agreeing to fund Clear Channel's transition into a private company at $36 per share.DJ30 -57.40 NASDAQ -1.68 SP500 -1.69 NASDAQ Dec/Adv/Vol 1469/1323/1.11 bln NYSE Dec/Adv/Vol 1503/1543/699 mln
1:30 pm : After making a steady decline, the stock market has made a move higher. The renewed interest is focused in the energy (+1.1%) and materials (-0.2%) sectors.
Oil giant Exxon Mobil (XOM 89.81, +0.62) is providing both the energy sector and the S&P 500 with the most leadership. Meanwhile, Alcoa (AA 42.06, +0.45) is providing materials with primary support.DJ30 -75.07 NASDAQ -5.53 SP500 -3.03 NASDAQ Dec/Adv/Vol 1534/1241/1.03 bln NYSE Dec/Adv/Vol 1614/1423/651.62 mln
1:00 pm : The stock market is back on the decline, as financials (-1.1%) continue to show weakness. Market breadth is slightly negative, with decliners outpacing advancers by 7-to-6 on the NYSE and by 6-to-5 on the Nasdaq.
The industrials sector (+0.3%) has outperformed throughout the session. Industrial service company Fluor (FLR 189.58, +23.22) reported solid first quarter results and increased its full year earnings outlook, sending its shares up 14%.DJ30 -72.22 NASDAQ -6.50 SP500 -3.18 NASDAQ Dec/Adv/Vol 1527/1244/931 mln NYSE Dec/Adv/Vol 1634/1393/595 mln
12:30 pm : The major indices remain in the red, but are now only trading with a slight loss. The Dow is underperforming, as many of its components are underperforming, such as Hewlett-Packard (HPQ 43.64, -3.19), Wal-Mart (WMT 56.75, -1.27) and American Express (AXP 48.91, -1.04) to name a few.
Crude oil eases off its lifetime high of $126.98 per barrel on word the Senate has approved an amendment to suspend the filling of strategic petroleum reserves. Prices are still up for the day, with a gain of 1.1% to $125.57 per barrel.DJ30 -57.32 NASDAQ -3.30 SP500 -1.53 NASDAQ Dec/Adv/Vol 1466/1263/842 mln NYSE Dec/Adv/Vol 1570/1443/541 mln
12:00 pm : The stock market opened on a slightly higher note on a better-than-expected retail sales reading, but sentiment soon soured on concerns over a major acquisition within the tech sector, a cautious outlook from the world's largest retailer and weakness in financials. At midday the major indices are posting modest losses.
In corporate news, Wal-Mart (WMT 56.72, -1.30) topped its quarterly earnings expectations by one cent, but shares are under pressure after the company provided guidance that left more room for disappointment than a positive surprise.
Hewlett-Packard (HPQ 43.80, -3.03) preannounced second quarter earnings that were above expectations, and raised its full-year estimate. However, shares have taken their steepest drop in four years on fears that HP is overpaying for its $13.9 billion acquisition of Electronic Data Systems (EDS 24.43, +0.35).
Seven of the ten economic sectors are posting a loss.
Financials (-1.5%) have acted as the major drag on the broader market. Oppenheimer cut its earnings for full year 2008 and 2009 on Goldman Sachs (GS 190.11, -1.97), Merrill Lynch (MER 48.41, -0.74), Lehman Brothers (LEH 42.88, -1.67) and Morgan Stanley (MS 46.59, -1.06). Oppenheimer believes the outlook for financials is far bleaker than reflected in the market.
The energy sector (+1.0%) is one bright spot, after reversing its 1.0% loss in conjunction with a rebound in crude prices. Crude is currently trading up 1.8% at $126.53 per barrel, erasing yesterday's decline and marking a fresh all-time high.
In economic news, April retail sales, excluding autos, rose 0.5%, which topped the median estimate that called for growth of 0.2%. This growth was not caused from an increase in gasoline sales, as gas station sales declined 0.4% in April. When including autos, retail sales fell 0.2%, which matched expectations.
Separately, April import prices rose 1.8% month-over-month, which was more than the expected 1.6% rise. March business inventories rose 0.1%, compared to the 0.5% increase in the prior month. Economists expected growth of 0.4%.DJ30 -68.39 NASDAQ -8.73 SP500 -3.47 NASDAQ Dec/Adv/Vol 1536/1155/722 mln NYSE Dec/Adv/Vol 1696/1289/468 mln
11:25 am : Selling pressure eases, but the major indices remain in the red. Only three of the economic sectors are in positive territory. The energy sector has had a notable reversal, as it is currently up 0.6% after being down as much as 1.0%. Crude prices have rebounded from a 0.9% decline to a 1.2% advance.
Hewlett-Packard (HPQ 43.96, -2.87) is acting as a major drag on the stock market, with shares falling 6.2% -- the most in roughly four years. Traders fear Hewlett-Packard is overpaying for its $13.9 billion acquisition of Electronic Data Systems (EDS 24.44, +0.36).DJ30 -78.00 NASDAQ -12.94 SP500 -5.08 NASDAQ Dec/Adv/Vol 1583/1084/609 mln NYSE Dec/Adv/Vol 1700/1236/395 mln
11:00 am : The major indices fall to fresh session lows. With the exception of energy (unch), the decline has been broad-based. Financials are acting as the major drag, with the sector shedding 1.1%.
Earlier today, Oppenheimer cut its earnings for full year 2008 and 2009 on Goldman Sachs (GS 190.02, -2.06), Merrill Lynch (MER 48.62, -0.53), Lehman Brothers (LEH 43.30, -1.25) and Morgan Stanley (MS 46.60, -1.05). Oppenheimer believes the outlook for financials is far more bleak than reflected in the market.DJ30 -72.06 NASDAQ -12.26 SP500 -5.85 NASDAQ Dec/Adv/Vol 1543/1081/507 mln NYSE Dec/Adv/Vol 1685/1228/326 mln
10:30 am : The major indices are trading within a tight range, with slight losses. Telecom is providing early leadership with a gain of 0.6%.
The dollar is catching a bid, up 0.50% against a basket of leading world currencies. The euro is down 0.53% against the dollar, and the dollar is up 0.77% against the yen. The buck is up 3.57% from its March 17 all-time low, but is still down 4.39% this year.
Conversely, commodities are down 0.5%, with notable weakness in gold (-2.5%) and silver (-3.6%).DJ30 -30.53 NASDAQ -1.52 SP500 -1.90 NASDAQ Dec/Adv/Vol 1384/1157/362 mln NYSE Dec/Adv/Vol 1548/1311/250 mln
10:00 am : The major indices are trading with slight losses. Six of the ten economic sectors are trending lower, led by weakness in energy (-0.7%) and materials (-0.7%) -- the two best performing sectors this year. Within materials, Newmont Mining (NEM 44.71, -0.55) is seeing some weakness as gold prices slip 2.3%.
Just hitting the wires, March business inventories rose 0.1%, compared to the 0.5% increase in the prior month. Economists expected growth of 0.4%. The stock market has a muted reaction to the data.DJ30 -30.86 NASDAQ -3.61 SP500 -2.45 NASDAQ Dec/Adv/Vol 1326/1053/192 mln NYSE Dec/Adv/Vol 1515/1233/141 mln
09:45 am : The stock market opens on a modestly higher note, but quickly slips into the red near the unchanged open.
April retail sales, excluding autos, rose 0.5%, which topped the median estimate that called for growth of 0.2%. This growth was not caused from an increase in gasoline sales, as gas station sales declined 0.4% in April. Auto sales, however, were a weak point, as retail sales fell 0.2% when including autos. This was in-line with expectations.
Meanwhile, Fed Chairman Ben Bernanke spoke about the Fed's liquidity measures, but did not provide any information that the market did not already know.
In corporate news, Wal-Mart (WMT) topped its earnings expectations, as did Hewlett-Packard (HPQ) in a preannouncement. The latter company confirmed it is going to acquire Electronic Data Systems (EDS) for $13.9 billion, or $25.00 per share.DJ30 -19.05 NASDAQ -3.47 SP500 -0.77
09:16 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: -1.2.
08:55 am : S&P futures vs fair value: +4.1. Nasdaq futures vs fair value: +2.0. Futures are trading at their best levels of the session, and now point to a slightly higher start to the trading day. The market received a boost on the better than expected retail sales ex auto reading.
08:35 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -5.6. Futures still point to a lower open, but pare some of their losses on a better than expected retail sales reading. It was just reported that April retail sales fell 0.2%, matching the consensus estimate. When excluding autos, retail sales rose 0.5%, topping the expected rise of 0.2%. Meanwhile April import prices rose 1.8% month-over-month, which is more than the expected 1.6% rise. Fed Chairman Ben Bernanke did not give the market any surprises in his speech so far. He said the Fed is ready to increase its Term Auction Facilities as warranted, and that current market conditions are far from normal.
08:00 am : S&P futures vs fair value: -4.8. Nasdaq futures vs fair value: -8.8. The current indications suggest a lower open for the S&P 500 and Nasdaq, despite Wal-Mart (WMT) posting better than expected earnings results, and Hewlett-Packard (HPQ) preannouncing second quarter earnings that were above the consensus estimate and raising its full year 2008 guidance. HPQ confirmed it has entered into a definitive merger agreement to acquire Electronic Data Systems (EDS). Meanwhile, investors await a speech on liquidity measures from Fed Chairman Ben Bernanke at 8:20 ET. On the economic front, April import/export prices and April retail sales are set for release at 8:30 ET.
06:20 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -8.0.
06:19 am : FTSE...6157.90...-62.70...-1.0%. DAX...7017.36...-18.59...-0.3%.
06:19 am : Nikkei...13953.73...+210.37...+1.5%. Hang Seng...25552.77...+489.60...+2%.
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