Market Comments ~~ Markets traded trading on market makers at-will with neg D persisting intraday trend supports. This kind of markets shows high risk even though Paulson and the Fed assure that we are in safe and sound economy.
Knowing truth about financial markets, economic conditions, oil price, market manipulation; we can only conclude that we are in bad situation. We can all pretend that we are in healthy bull market.
One needs to know limits and I keep my sanity when oil goes over $100 and still hype to $150-$200. This is irrational like a life is gasping for last breadths. We need to see change in current economic mix. Maybe the election will provide change. We need to see a big operational change to cure the financial and economic sickness which we have. It is like "Mad" money as per Cramer.
Market actions were driven by price-push up during this week regardless what TA were showing. It was intraday up trend momentum week.
Market Dispatches5/16/2008 10:00 PM ET Higher gas prices ahead as crude nears $128
Oil jumps after Goldman Sachs predicts it will average $140 for the second half of 2008. Traders bet that Chinese demand for diesel will push prices higher. Energy stocks shoot higher and help the markets end flat. By Charley Blaine and Elizabeth Strott
The price of crude oil hit new highs on Friday, which will squeeze consumer wallets perhaps as early as this weekend.
Crude hit an intraday high of $127.82 a barrel and a new closing high of $126.29 in New York, up 1.8% from Thursday. Crude is up 33 cents a barrel on the week and up 11.3% on the year.
The increase will put pressure on retail gas prices. AAA's daily survey Friday showed the retail price of unleaded gasoline averaging $3.787 a gallon, up 1 cent from Thursday and up 67 cents, or 22%, from a year ago.
The national average price could hit $3.82 a gallon this week or early next week, Tom Kloza of Oil Price Information Service, which does the survey work for AAA, said in a blog post today. That would bring the daily national tab for gasoline to $1.5 billion, up from $1.285 billion a year ago and $832 million in 2005.
Crude's gain was great for energy stocks but not so great for the rest of the market. Retail and financial stocks were among the weaker performers.
* Get free, real-time stock quotes on MSN Money
The Select Sector SPDR-Energy (XLE, news, msgs) exchange-traded fund was up 3.7% to $88.95. The ETF mirrors the energy component of the Standard & Poor's 500 Index and was the main reason the S&P 500 closed up 2 points on the day to 1,425.
The Dow Jones industrials, meanwhile, finished down 6 points at 12,987, and the Nasdaq Composite Index was off 5 points to 2,529. The Nasdaq and S&P 500 had hit five-month highs on Thursday.
Oil giants Chevron (CVX, news, msgs) and ExxonMobil (XOM, news, msgs) were the top performers among the 30 Dow stocks, up 1.9% to $100.38 and 1.5% to $92.67, respectively. Chevron's close was an all-time high, and the stock is up 20% since rejoining the Dow on Feb. 19.
Weakness in Apple (AAPL, news, msgs), Microsoft (MSFT, news, msgs) and eBay (EBAY, news, msgs) kept the Nasdaq-100 Index ($NDX.X) in check all day. The index finished unchanged at 2,031. Apple was down 1.1% to $187.62. EBay was off 2.4% to $31.17, and Microsoft dropped 1.5% to $29.9. (Microsoft is the publisher of MSN Money.)
Crude will affect markets next week, and it's possible that crude could move lower. The Bush administration announced Friday afternoon that it will temporarily stop adding oil to the nation's Strategic Petroleum Reserve.
And Saudi Arabia will increase crude production next month in response to rising demand from its customers and a request by President Bush, according to wire reports. The country will raise output by 300,000 barrels a day to 9.45 million barrels a day in June, Saudi Oil Minister Ali al-Naimi said in Riyadh on Friday, after a meeting between Bush and Saudi Arabia's King Abdullah.
The Saudi decision was seen more as a rebuff to Bush than as a concession. The decision to boost production was made a month ago, Saudi officials said. Plus, as the Financial Times noted, the Saudis pointedly waited until Bush had left the meeting before it made the announcement. That left U.S. officials in the embarrassing position of having already briefed reporters not to expect any movement from the Saudis.
"It's just a token increase but it shows that the Saudis realize just how important it is for the president to not come back empty-handed," said Peter Beutel, president of Cameron Hanover, an energy consulting firm.
Meanwhile, pressure seems to be building on OPEC to do something about oil prices.
"I think OPEC has to deal with this issue, because this is hitting all the poorest countries that are oil importers," Ecuador President Rafael Correa told Reuters in the Peruvian capital of Lima.
But late Friday, crude was up an additional 33 cents to $126.62.
Only 11 Dow stocks were higher Friday, along with 218 S&P 500 stocks and 43 stocks in the Nasdaq-100. A good week for stocks; is more ahead? For all of Friday's tumult, stocks finished with a good week -- their best since mid-April -- and could move higher.
The Dow was up 1.9% on the week but down 2.1% on the year. The S&P 500 was up 2.7% on the week and is down just 3% on the year. The Nasdaq was up 3.4% on the week and down 4.7% on the year. In January, the Dow was down more than 12%. At the S&P's bottom in March, the index was down as much as 14%.
What's important about the closes is that market continued to push higher, with the S&P 500 pushing toward its 2007 closing level of 1,468. The Nasdaq may have ended lower, but the close was still above its 200-day moving average of about 2,516.
The markets for the week Close for week Wk. ago close % chg. YTD. chg. Dow Jones industrials 12,986.80 12,745.88 1.89% -2.10% S&P 500 1,425.35 1,388.28 2.67% -2.93% Nasdaq Composite 2,528.85 2,445.52 3.41% -4.65% Russell 2000 741.17 720.05 2.93% -3.25% Crude oil per barrel $126.29 $125.96 0.26% 31.58% 10-yr. Treasury yield 3.85% 3.77% 2.20% -4.58% Gold per troy ounce $899.90 $885.80 1.59% 7.39%
Why crude moved higher Crude jumped after a Goldman Sachs report suggested that increasing Chinese demand for diesel fuel would push crude prices over $140 a barrel for the second half of 2008.
Goldman raised its price outlook for the second half of this year to $141 a barrel, from $107. Analysts said China may increase fuel imports to generate power after a May 12 earthquake. Other commodities, like gold and platinum, also surged as the dollar moved lower. Gold closed at $899.90 an ounce in New York, up 2.3% from Thursday. Gold is up 7.4% this year.
Goldman's reports have carried weight with oil traders around the world. Earlier this month, Goldman analyst Arjun Murti said in a report that crude at $150 to $200 looked likely over the next six to 24 months.
"At this point nobody wants to bet against Goldman," Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA in New York, told Bloomberg.
Higher crude helped energy stocks moved higher, however. In addition to gains for Chevron and ExxonMobil, Apache (APA, news, msgs) was up 5.4% to $143.49. Driller Transocean (RIG, news, msgs) was up 3.3% to $160.54. Consumer confidence falls Consumers have been dismayed by the economy this month.
The Reuters/University of Michigan's preliminary reading on May consumer confidence declined to a reading of 59.5 -- the lowest level in 28 years -- from a reading of 62.6 in April.
Economists had expected a reading of 61. The average reading in 2007 was 85.6.
Energy prices -- New York close Fri. Thur. Chg. Month chg. YTD chg. Crude oil (NYMEX) (per barrel) $126.29 $124.12 $2.17 11.31% 31.58% Heating oil (per gallon) $3.7028 $3.6224 $0.0804 16.55% 39.76% Natural gas (per million BTU) $11.0880 $11.3990 -$0.3110 2.26% 48.18% Unleaded gasoline (per gallon) $3.2235 $3.1658 $0.0577 9.97% 29.42%
Some hope for housing There was finally a little bit of good news about the housing sector Friday.
Housing starts rose a surprising 8.2% from March to April, to a seasonally adjusted 1.032 million annual rate, the Commerce Department reported Friday. Economists had expected a decline of 1.4% to an annual rate of 934,000. Single-family home starts fell to a seasonally-adjusted annual rate of 646,000 units, the worst level since January 1991.
* MSN's Stock Challenge: Win $15,000!
Building permits also rose, up 4.9% last month to an annual rate of 978,000. Economists had been looking for a 1.8% decline.
Single-family permits rose 4%, the first increase in more than a year. Building permits are an indication of future activity.
Don't get too excited about these numbers yet. It takes several months for a trend to emerge. Besides investors were clearly not excited. The Philadelphia Housing Sector Index ($HGX.X) was unchanged on Friday at 146 -- up 24% from its bottom in January but still down 50% from its high in July 2005.
Lennar (LEN, news, msgs) fell 2.1% to $20.01. D.R. Horton (DHI, news, msgs) was down 1.9% to $15.49, but Pulte Homes (PHM, news, msgs) was up 1.9% to $14.72.
Besides, the gains for starts and permits come after one of the most brutal crashes in homebuilding since the Depression.
Single-family starts are down 42% from a year ago and 58% from April 2005. Overall starts are down 31% from a year ago and 50% from April 2005.
A survey Thursday showed that only 6% of homebuilders said they believed the current market was in good shape. A whopping 69% said the housing market was in trouble, according to the National Association of Home Builders/Wells Fargo monthly index. Nordstrom, Kohl's give cautious outlooks Nordstrom (JWN, news, msgs) late Thursday reported lower first-quarter profit, as the department store struggled to deal with the slowing economy.
Nordstrom earned $119 million, or 54 cents a share, down from $157 million, or 60 cents a share, a year ago. Analysts had expected earnings of 54 cents a share. Kohl's (KSS, news, msgs) also reported a decline in profit for the quarter. Kohl's earned $153 million, or 49 cents per share, a drop from the $209 million, or 64 cents per share, last year. But the results also topped Wall Street's estimates of 45 cents per share.
"These beats tell me the retailers are doing what they're supposed to be doing," Patricia Edwards, managing director at investment firm Wentworth, Hauser and Violich, told Reuters. "The trick is how long can they keep this running in this type of environment."
Retailers have been slammed by the slowing economy, as consumers cut back on discretionary purchases. Consumer spending makes up about 70% of the U.S. economy, so what consumers do is critical to the health of industries like retail.
Unfortunately, both Nordstrom and Kohl's are worried that the economy will continue to weaken.
Kohl's lowered its full-year earnings forecast to $2.95 to $3.15 a share, down from a previous forecast of $3.15 to $3.50 a share. The consensus estimate is for $3.11 a share.
Nordstrom cautioned that its 2008 earnings would be between $2.65 and $2.80 per share, lower than a previous target of $2.75 to $2.90 per share and below Wall Street's estimate of $2.82 per share.
Nordstrom shares were up 3.1% to $38.44 Friday; Kohl's shares were down 2.4% to $49.27.
Separately, Goldman Sachs cut its view on the retail sector to "neutral" from "attractive," citing its oil forecast and the likelihood of rising gas prices as a result of higher oil costs.
Short hits from the markets -- 4 p.m. Fri. Thur. Chg. Month chg. YTD chg. Treasurys 13-week Treasury bill 1.800% 1.790% 0.010 34.33% -42.68% 5-year Treasury note yield 3.116% 3.111% 0.005 2.74% -9.81% 10-year Treasury note yield 3.850% 3.843% 0.007 2.42% -4.58% 30-year Treasury bond yield 4.579% 4.576% 0.003 1.82% 2.69% Currencies U.S. Dollar Index 72.960 73.490 -0.530 0.33% -4.87% British pound in dollars $1.9577 $1.9489 0.0088 -1.53% -1.59% Dollar in British pounds £0.5108 £0.5131 -0.0023 1.55% 1.61% Euro in dollars $1.5586 $1.5451 0.0135 -0.22% 6.64% Dollar in euros € 0.6416 € 0.6472 -0.0056 0.22% -6.23% Dollar in yen ¥104.05 ¥104.68 -0.63 0.12% -6.97% Canadian dollar in U.S. dollars $1.001 $1.000 $0.0009 0.70% 0.80% U.S. dollar in Canadian dollars $0.999 $1.000 -$0.0006 -0.67% -0.83% Commodities Gold $899.90 $882.10 $19.90 4.02% 7.39% Copper $3.8265 $3.7385 $0.09 -2.00% 25.83% Silver $16.9600 $16.6850 $0.28 2.21% 13.67% Corn $5.9100 $5.9900 -$0.08 -1.54% 29.75% Crude oil (NYMEX) (per barrel) $126.29 $124.12 $2.17 11.31% 31.58%
Yahoo backs its board The saga continues.
Yahoo (YHOO, news, msgs) late Thursday said billionaire investor Carl Icahn has a "significant misunderstanding" about the merger negotiations with Microsoft. "We do not believe it is in the best interests of Yahoo stockholders to allow you and your hand-picked nominees to take control," Yahoo Chairman Roy Bostock said in a letter to Icahn.
* Yahoo responds to Icahn
Earlier, Icahn sent an open letter to Yahoo's board, stating that it is "quite obvious" that Microsoft's $33-per-share offer is superior to the prospects of Yahoo as a stand-alone company.
Yahoo shares closed down 9 cents to $27.66 on Friday.
Icahn has said he has bought about 59 million Yahoo shares and has lined up a 10-person slate of nominees to replace Yahoo's board. Shareholders will meet July 3.
Hedge fund Paulson & Co., run by John Paulson, said late Thursday that it owns 50 million shares of Yahoo -- a 3.6% stake in the Internet giant. In a statement, Paulson said a Microsoft-Yahoo combo would be a stronger competitor to Google (GOOG, news, msgs).
* Read Icahn's letter to Yahoo
Microsoft withdrew a $47.5 billion offer for Yahoo on May 3 after the two companies could not agree on a price. Yahoo, Google still talking? In related news, Yahoo is still in talks with Google about a search advertising partnership, the New York Post reported.
"They can call it anything they want, but at the end of the day, it's still rigged so that Google wins every time," Michael Kassan, founder of advertising consulting firm Media Link and a strategic adviser to Microsoft, told the newspaper.
Separately, Yahoo announced a deal with British advertising giant WPP Group (WPPGY, news, msgs) that will allow WPP to buy digital display ads across the Web more efficiently.
News 
Market Data 
Discover 
AI
