Market Update 080609 http://biz.yahoo.com/mu/update.html 4:25 pm : After a volatile day of trade Monday, the major indices ended the session in mixed fashion. The S&P 500 gained one point, as strength in energy (+2.7%) helped offset weakness in financials (-2.3%).
This result is somewhat disappointing, considering the S&P 500 could only muster a 0.1% gain after falling more than 3% on Friday -- especially taking into consideration that the session's economic data topped expectations and that crude prices posted a steep decline.
Large-cap tech was under pressure, which caused the Nasdaq to fall 0.6%. A better-than-expected same-store sales report from McDonald's (MCD 59.33, +2.38) and speculation that Alcoa (AA 42.17, +2.95) could be a takeover target helped lift the Dow to a 0.6% gain.
Selling interest within financials was fueled by a disappointing earnings preannouncement from Lehman Brothers (LEH 29.62, -2.67). Lehman expects a massive $2.8 billion second quarter loss and plans to raise $6.0 billion in new capital in common and preferred stock offerings -- which is on the high end of previous speculation. The $4.0 billion common stock offering was priced at $28 per share, a 13% discount to Friday's closing price. The firm also priced a $2.0 billion public offering of 2 million shares of 8.75% noncumulative mandatory convertible preferred stock.
The financial sector traded as high as 0.8% in a rebound bid following Friday's decline of roughly 5%, but plummeted to a new five-year low after New York Fed President Geithner said global inflation will probably require tighter policy.
This isn't an earth-shattering revelation since Geithner is simply stating the obvious. Nevertheless, his remarks fit neatly with commentary of late from other Fed officials who are sounding more hawkish about keeping inflation in check than they have in the recent past.
There were some positive items on Monday. Crude oil fell 2.9% to $134.54 as investors took some profits following Friday's 8.4% spike. The dollar gained 0.65% in the wake of hawkish Fed comments, which also played a role in crude's retreat. A Saudi official said the current price of oil is not supported by fundamentals, although OPEC has been expressing this view long before oil hit $100.
In economic news, April pending home sales unexpectedly rose 6.3% on a seasonally adjusted annual rate, according to the National Association of Realtors. Economists expected sales to fall 0.4%.
In corporate news, Honeywell (HON 54.81, +0.80) announced that it signed a definitive agreement to sell its Aerospace Consumable Solutions business to B/E Aerospace (BEAV 29.96, +2.98) for $1.05 billion. Honeywell feels the Consumables Solutions unit no longer fits with Honeywell Aerospace's focus on advanced technologies.
Apple (AAPL 181.61, -4.03) traded in a volatile manner leading up to and following its unveiling of the new iPhone, which is set for release on July 11. AT&T (T 37.56, -0.65), which will remain the exclusive carrier of the phone, got clipped after announcing it expects the phone will pressure its margins and earnings. DJ30 +70.51 NASDAQ -15.10 NQ100 -0.5% R2K -0.7% SP400 -0.1% SP500 +1.08 NASDAQ Dec/Adv/Vol 1952/913/2.13 bln NYSE Dec/Adv/Vol 2004/1111/1.36 bln
3:35 pm : The financial sector extends its losses, falling 3.2% to session lows. The sector hit 302.68, which marks a new five-year low.
Meanwhile, enthusiasm fades over Apple's (AAPL 178.18, -7.40) new iPhone, as its stock trades with a loss of more than 4%. On a related note, AT&T (T 37.10, -1.12) announced that it plans to offer the next generation iPhone, and will remain the exclusive carrier. The company expects the deal to pressure its margins and earnings, which sent its stock and telecom (-2.2%) into negative territory.DJ30 +28.14 NASDAQ -28.04 SP500 -5.10 NASDAQ Dec/Adv/Vol 2063/781/1.01 bln NYSE Dec/Adv/Vol 2124/986/1.01 bln
2:55 pm : The stock market is posting a slight loss, as continued weakness in financials (-2.5%) is preventing the market from making it back to positive territory.
The tech sector (-0.7%) pares a portion of its losses as Apple (AAPL 180.85, -4.79) CEO Steve Jobs unveils the new iPhone 3G at an Apple conference. Jobs said the new iPhone will have a better battery life and a built-in GPS. The phone will be available in 22 countries on July 11. The eight gigabyte version will be priced at $199 and the 16 gigabyte will be priced at $299. Apple stock is down 2.6% this session, but is well off its low when it was down 5.3%.DJ30 +28.82 NASDAQ -30.17 SP500 -4.90 NASDAQ Dec/Adv/Vol 2026/811/1.50 bln NYSE Dec/Adv/Vol 2018/1056/861 mln
2:30 pm : The major indices fall to session lows and then recover a bit, with the Dow briefly touching negative ground.
Meanwhile, crude oil prices are trading at session lows. Crude is down 3.0% to $134.35 per barrel. Commodities as whole are down 0.8%, although corn gained 1%, hitting a record high for the third straight session.DJ30 +36.47 NASDAQ -32.94 SP500 -4.31 NASDAQ Dec/Adv/Vol 2066/760/1.35 bln NYSE Dec/Adv/Vol 2072/985/781 mln
2:00 pm : A fresh wave of broad-based selling interest sends the major indices to session lows. The Dow is holding onto a slight gain, although its advance is modest. Strength in energy (+1.8%) is unable to offset weakness in the two largest sectors -- tech (-1.2%) and financials (-2.2%).
Within the financial sector, 83% of stocks are posting a loss. Thrifts & mortgage stocks (-5.5%) are posting the largest decline, with Washington Mutual (WM 6.69, -0.85) down 11% and MGIC Investment Corp (MTG 10.62, -0.71) down 6.3%.DJ30 +35.90 NASDAQ -36.27 SP500 -5.64 NASDAQ Dec/Adv/Vol 1957/847/1.18 bln NYSE Dec/Adv/Vol 1943/1090/678 mln
1:30 pm : The major indices have suffered a sharp contraction in the the past half-hour after news wires ran headlines that noted New York Fed President Geithner said global inflation will probably require tighter policy.
This isn't an earth-shattering revelation since Geithner is simply stating the obvious. Nevertheless, his remarks fit neatly with commentary of late from other Fed officials who are sounding more hawkish about keeping inflation in check than they have in the recent past.
The added understanding that Dallas Fed President Fisher was doing an interview at the same time with CNBC, and voiced his support for Geithner's remarks, also contributed to the knee-jerk selling interest.
The financial sector, down 0.7% at the last report, is now down 1.7%. DJ30 +48.61 NASDAQ -27.74 SP500 -0.77 NASDAQ Dec/Adv/Vol 1779/1009/984 mln NYSE Dec/Adv/Vol 1711/1298/561 mln
1:00 pm : The split nature of today's stock market persists with the Nasdaq holding in negative territory and the blue chip averages sporting gains.
The advance in the broader market has been spearheaded by the energy and materials sector, but unlike Friday's broad-based sell-off, the participation on the upside today isn't that pronounced. This evidence presents itself in the advance-decline line at the NYSE, which actually favors declining issues by a small margin at this juncture.
As far as participation goes, the financial sector (-0.7%) is the most conspicuous laggard. Its performance will be watched closely in afternoon trading since the sector has the influence either to help the broader market build on today's modest gains or to see those gains evaporate.DJ30 +100.06 NASDAQ -12.20 SP500 +6.62 NASDAQ Dec/Adv/Vol 1700/1081/886 mln NYSE Dec/Adv/Vol 1603/1385/504 mln
12:30 pm : Investors are hesitant to send the market higher, as the major indices continue to trade in a mixed and choppy fashion. Financials (-0.5%) are trading near session lows, although some financial names are showing strength.
Global commercial finance company CIT Group (CIT 9.92, +0.73) is getting a nice boost after announcing this morning that it has agreed to a $3 billion long-term committed financing facility provided by Goldman Sachs. CIT believes the transaction will help strengthen its balance sheet. The company has been hit hard by the credit market turmoil, with its stock down 84% from its 52-week high.DJ30 +91.76 NASDAQ -16.61 SP500 +5.80 NASDAQ Dec/Adv/Vol 1680/1030/834 mln NYSE Dec/Adv/Vol 1568/1406/486 mln
11:55 am : The stock market is posting a modest gain at midday. A better-than-expected housing report and a drop in crude prices are fueling the buying interest. However, weakness in tech and financials is limiting the broader market's advance.
A second quarter earnings preannouncement from Lehman Brothers (LEH 29.97, -2.32) topped headlines this morning. The struggling Wall Street firm expects a massive $2.8 billion second quarter loss and plans to raise $6.0 billion in new capital in common and preferred stock offerings -- which is on the high end of previous speculation. The $4.0 billion common stock offering was priced at $28 per share, a 13% discount to Friday's closing price. The firm also priced a $2.0 billion public offering of 2 million shares of 8.75% noncumulative mandatory convertible preferred stock.
This news has weighed on the financial sector, which is underperforming with a loss of 0.2%.
Meanwhile, the tech sector (-0.6%) is facing selling pressure as shares of Apple (APPL 183.61, -2.03) and Google (GOOG 555.13, -11.87) fall. The weakness in large-cap tech is causing the Nasdaq 100 to retreat 0.6%.
The rest of the stock market is faring better, with seven of the ten economic sectors posting a gain. The energy and materials sectors are leading the way with advances of 2.6% and 1.5%, respectively. A bit of a rebound bid following Friday's steep losses, as well as a 1.3% drop in crude prices is helping to lift the market.
Also giving the market a boost is word that April pending home sales unexpectedly rose 6.3% on a seasonally adjusted annual rate, according to National Association of Realtors. Economists expected sales to fall 0.4%.
In corporate news, Honeywell (HON 55.43, +1.42) announced that it signed a definitive agreement to sell its Aerospace Consumable Solutions business to B/E Aerospace (BEAV 28.95, +1.97) for $1.05 billion. Honeywell feels the Consumables Solutions unit no longer fits with Honeywell Aerospace's focus on advanced technologies.
Dow component McDonald's (MCD 59.20, +2.25) said its global same-store sales rose 7.7% in May, topping the Briefing.com consensus estimate of 3.6%. International comparable sales rose 16.0%, or 9.1% in constant currencies. U.S. comparable sales rose 4.2%.DJ30 +82.68 NASDAQ -15.95 SP500 +5.24 NASDAQ Dec/Adv/Vol 1662/1024/748 mln NYSE Dec/Adv/Vol 1499/1439/431 mln
11:30 am : The major indices are on the rise, but continue to trade in mixed fashion. Large-cap tech is taking a toll on the Nasdaq 100 (-0.8%).
Financials (+0.1%) have managed to make it back to positive ground, although the sector's advance is slight.DJ30 +105.19 NASDAQ -14.88 SP500 +6.97 NASDAQ Dec/Adv/Vol 1597/1041/667 mln NYSE Dec/Adv/Vol 1445/1498/384 mln
11:00 am : The Dow and S&P 500 give up a portion of their gains, while the Nasdaq extends its loss.
Technology stocks Apple (AAPL 181.97, -3.67) and Google (GOOG 553.95, -13.05) are acting as the biggest drags. Financials (-0.3%) have retreated into the red after being up as much as 0.8%. Lehman Brothers (LEH 29.50, -2.79) is the main laggard, and AIG (AIG 33.53, -0.40) is also under pressure after The Wall Street Journal reported major shareholders are not happy with current management.
Diversified technology and manufacturing company Honeywell (HON 55.20, +1.19) is outperforming this session. The company announced that it signed a definitive agreement to sell its Aerospace Consumable Solutions business to B/E Aerospace for $1.05 billion. Honeywell feels the Consumables Solutions unit no longer fits with Honeywell Aerospace's focus on advanced technologies.DJ30 +70.43 NASDAQ -19.75 SP500 +4.24 NASDAQ Dec/Adv/Vol 1606/995/557 mln NYSE Dec/Adv/Vol 1444/1432/322 mln
10:30 am : The major indices are trading in mixed fashion. The Dow is handily outperforming the Nasdaq and S&P 500.
Dow component McDonald's (MCD 59.48, +2.53) said its global same-store sales rose 7.7% in May, topping the Briefing.com consensus estimate of 3.6%. International comparable sales rose 16.0%, or 9.1% in constant currencies. U.S. comparable sales rose 4.2%.DJ30 +100.63 NASDAQ -8.30 SP500 +7.06 NASDAQ Dec/Adv/Vol 1322/1199/401 mln NYSE Dec/Adv/Vol 1178/1649/235 mln
10:05 am : Just hitting the wires, April pending home sales unexpectedly bounced 6.3% on a seasonally adjusted annual rate, according to National Association of Realtors. Economists expected sales to fall 0.4%. The reading is the highest since October, but is still 13% below one year ago.
The major indices get a boost from the better-than-expected report, although the Nasdaq is in the red. The tech sector (-0.5%) is facing selling pressure, with Apple (AAPL 181.83, -3.81) in negative territory as the Apple Worldwide Developers Conference kicks off. Barron's reported this morning that production of the new iPhone is behind schedule.
The energy (+1.6%) and materials (+1.3%) are providing leadership.DJ30 +81.25 NASDAQ -12.98 SP500 +4.87 NASDAQ Dec/Adv/Vol 1186/1539/251 mln NYSE Dec/Adv/Vol 1186/1539/158 mln
09:40 am : Stocks open on a modestly higher note, although the gain is slight compared to last Friday's massive losses. Crude prices have eased 2.3% to $135.48 per barrel.
Lehman Brothers (LEH 29.49, -2.80) is once again a focal point this morning. The struggling Wall Street firm preannounced a massive $2.8 billion second quarter loss and plans to raise $6.0 billion in new capital in common and preferred stock offerings -- which is on the high end of previous speculation. The $4.0 billion common stock offering was priced at $28 per share, a 13% discount to Friday's closing price. The firm also priced a $2.0 billion public offering of 2 million shares of 8.75% noncumulative mandatory convertible preferred stock.
Moody's lowered Lehman's credit ratings to negative from stable, citing the second quarter loss and decline in hedge effectiveness.DJ30 +41.44 NASDAQ +0.83 SP500 +4.45
09:16 am : S&P futures vs fair value: +5.0. Nasdaq futures vs fair value: flat.
09:01 am : S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +5.0. Futures continue to indicate a higher open to the trading day, but the positive opening is slight, especially when considering the scope of Friday's losses. McDonald's reported May same-store sales rose 7.7%, topping the 3.6% Briefing.com consensus estimate. Financial services company CIT Group (CIT) is getting a lift in premarket action on word that the company it has agreed to a $3 billion long-term committed financing facility with Goldman Sachs (GS).
08:32 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +5.2. Stock futures suggest a slightly higher start to the trading day. In deal news, Honeywell (HON) announced that it signed a definitive agreement to sell its Consumables Solutions business to B/E Aerospace (BEAV) for $1.05 billion.
08:05 am : S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +3.8. Futures point to a modestly higher open for the stock market following last Friday's steep losses. As previously speculated, Lehman Brothers (LEH) preannounced a massive $2.8 billion second quarter loss, and announced plans to raise $6 billion in capital. Stock futures dipped on this news, but have since recovered. Meanwhile crude has slipped 1.0% to $137.14 per barrel, which follows its record run last Friday.
06:23 am : S&P futures vs fair value: +2.5. Nasdaq futures vs fair value: +5.5.
06:21 am : FTSE...5912.80...+6.00...+0.1%. DAX...6795.84...-7.97...-0.1%.
06:21 am : Nikkei...14181.38...-308.06...-2.1%. Hang Seng...Holiday.........
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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