Market Update 080729 http://biz.yahoo.com/mu/update.html 4:15 pm : The stock market rallied on Tuesday, lifted by a drop in oil prices, several better-than-expected quarterly earnings reports, an increase in consumer confidence, and speculation that the latest capital raise from a major financial firm is a sign that the worst is over for Wall Street.
Stocks finished the day at session highs following a late-day surge in buying interest, led by financials. Nine of ten sectors posted a gain. Defensive investments underperformed on a relative basis, with healthcare (+0.7%), telecom (+0.6%), and utilities (+0.4%) trailing the broader market. Likewise, the 10-year Treasury note slipped 15 ticks.
In an effort to reduce its risk exposure and shore up its balance sheet, Merrill Lynch (MER 26.32, +1.99) is selling $30.6 billion worth of U.S. ABS CDOs for only $0.22 on the dollar, or $6.7 billion. The assets were valued at $11.1 billion at the end of the second quarter, meaning the sale will result in a $4.4 billion pretax write-down. Merrill has taken $51.8 billion in write-downs and credit losses since the credit market turmoil began last year -- second only to Citigroup's (C 18.46, +1.03) $54.6 billion.
Merrill also raised $8.55 billion in a common stock offering at $22.50 per share, making the sale dilutive to existing shareholders. Merrill's stock fell 9.5% to a 10-year low shortly after the open, only to rebound and finish the day 8.2% higher. Merrill's stock dropped nearly 12% during the previous session on no specific news item, so the market may have already been pricing in some of the latest write-down and capital raising news.
The financial sector ended the session with a massive 7.5% gain, as traders speculated that the Merrill news indicated better times are ahead for financial firms. The sector also benefited from some short-covering, and a bit of a rebound trade following its 12% loss over the previous three sessions. Strength was broad-based, as only one of the 88 S&P 500 financial stocks posted a loss -- insurer XL Capital (XL 18.05, -0.32), which announced a dilutive capital raise.
Crude prices fell 2.3% to $121.87 per barrel as the dollar rose 0.9%. This sparked buying interest in consumer discretionary (+3.3%), retailers (+4.1%) and airlines (+11.4%). Conversely, the energy sector (-0.8%) posted a loss.
Earnings reports were mostly better than expected. Some of the bigger names that topped earnings estimates included Amgen (AMGN 62.22, +1.74), Colgate-Palmolive (CL 74.23, +5.67), U.S. Steel (X 165.42, +20.09), Valero Energy (VLO 33.30, +1.49) and Waste Management (WMI 35.92, +0.85).
In economic news, the Conference Board said that July consumer confidence rose roughly 2% month-over-month to 51.9 -- the first gain in six months. The increase in confidence came as oil prices retreated from record highs and the stock market rebounded from its July 15 low. Rising confidence levels are a plus for the stock market, although the survey only has weak correlation with actual spending, so Briefing.com does not put too much stock in the report.
Despite Tuesday's massive 2.4% advance, the Dow is only up 0.2% this week, as it had a lot of ground to make up after falling 239 points on Monday. DJ30 +266.48 NASDAQ +55.40 NQ100 +2.4% R2K +2.7% SP400 +2.1% SP500 +28.83 NASDAQ Adv/Vol/Dec 1997/2.31 bln/837 NYSE Adv/Vol/Dec 2461/1.40 bln/696
3:30 pm : The stock market surges to its best level of the session, with the Dow now making up nearly the entirety of yesterday's 239 point drop. The recent push higher is broad-based, although buyers continue to show notable interest in the financial sector (+6.0%).
Wednesday brings another barrage of earnings reports, including results from Visa (V 74.69, +4.14) and Walt Disney (DIS 31.01, +0.51). On the economic front, the July ADP private employment report is set for release at 8:15 ET. The report has a history of being inaccurate compared to the governments jobs report (set for release Friday), although the ADP reading still has a tendency to move the market.DJ30 +232.94 NASDAQ +52.33 SP500 +24.33 NASDAQ Adv/Vol/Dec 2006/1.92 bln/811 NYSE Adv/Vol/Dec 2405/991 mln/734
3:00 pm : Stocks take a brief dip and then go back on the rise. The S&P 500 is posting a hefty gain of more than 1.5%.
Retailers are up 2.9% this session, benefiting from the improved sentiment and pullback in oil prices. Coach (COH 26.05, -0.33), however, is posting a loss. Coach reported in-line quarterly earnings, but said it believes the consumer malaise in the U.S. will remain well into calendar 2009 and significantly impact its business. The company still expects to achieve profitable growth, although at a lower rate.DJ30 +186.29 NASDAQ +46.79 SP500 +19.54 NASDAQ Adv/Vol/Dec 1988/1.75 bln/807 NYSE Adv/Vol/Dec 2369/906 mln/775
2:30 pm : The stock market continues to post a large gain. Within the S&P 500, only 85% of stocks are posting a gain. Financials and tech dominate the leadership board, with Bank of America (BAC 30.20, +2.14), JPMorgan (JPM 39.64, +1.98), Wells Fargo (WFC 29.63, +1.70) and Microsoft (MSFT 25.98, +0.49) topping the list.
Energy stocks represent the bulk of the laggards, with ConocoPhillips (COP 80.30, +1.48) and Halliburton (HAL 43.95, -1.94) showing the most weakness.DJ30 +201.32 NASDAQ +48.94 SP500 +21.66 NASDAQ Adv/Vol/Dec 1988/1.61 bln/776 NYSE Adv/Vol/Dec 2388/836 mln/749
2:00 pm : The stock market trades at a new session high, as nine of the ten sectors post a gain. Only the energy sector (-0.9%) remains in the red, although it has cut its loss in half.
The 2.5% drop in oil prices is giving a large 4.0% boost to transports, with airlines up 12%. Still, the Amex Airline Index is down 37% this year as nearly every major airline has reported a second quarter loss due to the spike jet fuel prices. Southwest Airlines (LUV 15.75, +0.73) is an exception, managing to post a profit thanks to the company previously hedging its risk by locking in lower fuel prices.DJ30 +213.40 NASDAQ +51.87 SP500 +22.33 NASDAQ Adv/Vol/Dec 2021/1.48 bln/725 NYSE Adv/Vol/Dec 2394/758 mln/733
1:35 pm : The stock market has made its way to a new session high. The session's tone has been largely influenced by the financial sector, which is up 4.5% currently.
The strongest names in the financial sector include big banks and money centers like Bank of America (BAC 30.11, +2.05) and JPMorgan Chase (JPM 39.35, +1.69). After hitting a 52-week low in mid-July, the stocks have rebounded 63% and 35%, respectively. The financial sector is up roughly 23% since mid-July.DJ30 +188.89 NASDAQ +49.53 SP500 +20.03 NASDAQ Adv/Vol/Dec 1987/1.36 bln/734 NYSE Adv/Vol/Dec 2327/692 mln/785
1:00 pm : The stock market continues to post strong gains, with eight of the ten economic sectors in positive territory.
Market breadth is bullish, with advancing issues outpacing declining issues by nearly 3-to-1 on the NYSE and by 5-to-2 on the Nasdaq. Most of the declining issues are energy or utility names. Volume is average.
Treasuries are are on the decline as the stock market advances. The 10-year note is down 16 ticks, sending its yield up to 4.07%.DJ30 +183.92 NASDAQ +45.37 SP500 +18.78 NASDAQ Adv/Vol/Dec 1965/1.25 bln/745 NYSE Adv/Vol/Dec 2261/629 mln/825
12:30 pm : Stocks trade near their recently reached session high. The market's advance is broad-based, although financials are posting the largest gain (+4.0%).
Within the sector, only two of 88 stocks are posting a loss. Merrill Lynch (MER 24.10, -0.23) is down 1.0% after announcing more write-downs and a capital raise, although it has recovered from its multi-year low of $22.00 that was hit in the early-going.
Meanwhile, insurer XL Capital (XL 17.16, -1.21) is down 6.6% on word that it is paying bond insurer Security Capital Assurance (SCA 0.905, +0.385) $1.8 billion, which will eliminate XL's exposure to SCA (XL holds 40% of SCA). In order to fund the transaction, XL is raising $2.5 billion in capital at $16 per share.DJ30 +172.09 NASDAQ +47.95 SP500 +18.30 NASDAQ Adv/Vol/Dec 1968/1.13 bln/722 NYSE Adv/Vol/Dec 2271/575 mln/802
12:05 pm : Stocks post steep gains at midday thanks to a barrage of better-than-expected earnings reports, a steep drop in crude prices, and a gain in consumer confidence. The bullish news is overshadowing disappointment that a Wall Street firm is selling assets at a steep discount and made highly dilutive common stock sale.
Eight of the ten economic sectors are posting a gain, with the financial sector (3.5%) posting the largest advance.
In an effort to reduce its risk exposure and shore up its balance sheet, Merrill Lynch (MER 24.12, +0.21) is selling $30.6 billion U.S. CDOs for only $0.22 on the dollar, or $6.7 billion. The assets were valued at $11.1 billion at the end of the second quarter, meaning the sale will result in a $4.4 billion pretax write-down. Merrill has taken $51.8 billion in write-downs and credit losses since the credit market turmoil began last year.
Merrill also raised $8.55 billion in a common stock offering at $22.50 per share, making the sale extremely dilutive for existing shareholders. Merrill's stock dropped nearly 12% yesterday on no specific news item, and is down 1.0% this session.
Citigroup (C 17.62, +0.23) is also garnering attention, after the firm had its earnings estimates lowered at Deutsche Bank. Deutsche believes that Citi will write-down an additional $8 billion in assets following Merrill's actions. Citi has taken a total of $54.6 billion in write-downs and credit losses -- more than any other firm.
The financial sector is still showing strength, though, as the news is contained to MER. The sector is rebounding from its 12% loss over the previous three sessions. Strength is broad-based, with 98% of stocks within the sector trading higher.
There is also notable strength in consumer discretionary names. The sector is benefiting from a 2.4% drop in crude oil prices and an increase in the latest consumer confidence reading. Conversely, the energy sector (-1.4%) is trading lower.
Crude's decline comes as the dollar advances 0.9% against a basket of currencies, which is weighing on commodities as a whole (-1.2%).
Despite the decline in commodity prices, the material sector (+1.9%) is providing leadership. The sector is benefiting from blowout earnings from U.S. Steel (X 166.59, +21.26).
As a whole, earnings reports were better than expected. Some of the names that topped Wall Street's estimates include, Amgen (AMGN 63.09, +2.60), Colgate-Palmolive (CL 73.02, +4.46), Valero Energy (VLO 32.26, +0.45) and Waste Management (WMI 35.94, +0.87).
In economic news, the Conference Board said that July consumer confidence rose roughly 2% month-over-month to 51.9 -- the first gain in six months. The increase in confidence came as oil prices retreated from record highs and the stock market rebounded from its July 15 low. Rising confidence levels are a plus for the stock market, although the survey only has weak correlation with actually spending, so Briefing.com does not put too much stock in the report.
Despite this session's hefty advance, the Dow still has roughly 61 points to recover from Monday's 240 point drop. The Nasdaq, however, has recouped Monday's loss, thanks to strength in large-cap tech.DJ30 +178.53 NASDAQ +52.77 SP500 +18.89 NASDAQ Adv/Vol/Dec 1952/1.00 bln/718 NYSE Adv/Vol/Dec 2254/509 mln/788
11:30 am : The stock market trades with solid gains, modestly below session highs. The Nasdaq is handily outperforming, with a gain of roughly 2% compared to the S&P 500's advance of 1.2%.
The Nasdaq is benefiting from strength in large-cap tech, and also a large advance in yesterday's best-performing stock, Amgen (AMGN 63.17, +2.67). The biotech firm reported second quarter earnings of $1.14, which topped the consensus estimate by $0.12. The company also raised its fiscal year 2008 earnings guidance. In the previous session, AMGN soared 12% on a positive report related to the company's osteoporosis drug.DJ30 +128.74 NASDAQ +45.97 SP500 +14.53 NASDAQ Adv/Vol/Dec 1896/849 mln/740 NYSE Adv/Vol/Dec 2179/431 mln/823
11:05 am : The major indices climb to new highs, as investors remain encouraged by several better-than-expected earnings results and a steep drop in crude prices.
Crude prices extend their decline, now down 3.1% to $120.83 per barrel. Crude prices have dropped 22% since July 11, although they are still up 44% since last August.
Some of the selling interest in crude, and commodities in general (-0.9%), is spurred by a 0.8% gain in the dollar. The dollar is up 1.0% against the euro and is up 0.7% against the yen.
In deal news, Fording Canadian Coal Trust (FDG 88.37, +5.88) is selling all of its assets to Teck Cominco (TCK 39.86, +0.43) for $14.1 billion in cash and stock. Both firms are based in Canada.DJ30 +133.12 NASDAQ +47.46 SP500 +14.34 NASDAQ Adv/Vol/Dec 1891/703 mln/691 NYSE Adv/Vol/Dec 2168/357 mln/798
10:30 am : Investor sentiment remains bullish as crude prices fall 2.7% to $121.40. As a result, the only sector in negative territory is energy (-1.8%).
Strikingly, the financial sector is rallying 1.9% despite disappointment regarding Merrill Lynch's (MER 23.07, -1.25) write-downs and capital raise. In addition, Citigroup (C 17.16, -0.26) had its earnings estimates lowered at Deutsche Bank, as the firm expects $8 billion in write-downs at Citi following Merrill's actions.
But negative sentiment is being contained to MER and C, as 95% stocks within the sector are posting a gain. The advance is being led by Wells Fargo (WFC 28.82, +0.89), Goldman Sachs (GS 177.91, +5.01) and Hartford Financial Services (HIG 62.49, +4.23). Hartford, a property and casualty insurance company, reported better-than-expected second quarter earnings and raised its full year outlook.DJ30 +119.85 NASDAQ +39.23 SP500 +13.46 NASDAQ Adv/Vol/Dec 1808/481 mln/651 NYSE Adv/Vol/Dec 2073/246 mln/795
10:05 am : Better-than-expected earnings reports help the stock market extend its gains, overshadowing investor disappointment regarding Merrill Lynch's (MER 23.22, -1.12) latest batch of write-downs and capital raises. Stocks get an added boost from an encouraging consumer confidence reading.
The Conference Board said that consumer confidence rose roughly 2% to 51.9 in July, compared to the consensus estimate of 50.1. This marks the first increase in confidence since December.
Steel stocks (+9%) are soaring this session after U.S. Steel (X 165.99, +20.66) blew past Wall Street's earnings estimate. Substantial steel price increases outpaced increased input costs. The company earned $5.65 per share, which was well ahead of the $2.91 consensus.
Colgate Palmolive (CL 72.50, +3.94) is up nearly 6% after posting second quarter earnings per share of $0.98. The result marks a 17% year-over-year increase and tops the consensus estimate by four cents.DJ30 +99.57 NASDAQ +31.69 SP500 +10.69 NASDAQ Adv/Vol/Dec 1637/283 mln/663 NYSE Adv/Vol/Dec 1970/144 mln/809
09:45 am : The stock market gets off to a positive start. Earnings have been mostly better-than-expected, but grasping the most headlines is news that Merrill Lynch (MER 22.71, -1.62) is raising billions in fresh capital.
In an effort to reduce its risk exposure and shore up its balance sheet, Merrill is selling $6.7 billion in U.S. CDOs and is raising $8.5 billion in a common stock offering. The sale of CDOs comes at a price -- they are being sold at $0.22 on the dollar compared to their gross notional value, and the price is $4.4 billion less than what Merrill valued them at the end of the second quarter. In addition, Merill is providing 75% of the financinig for the sale.
The common stock offering was priced at $22.50 per share, making it extremely dilutive for existing shareholders. Merrill's stock dropped nearly 12% yesterday on no specific news item, and is down 7% this session.
In earnings news, Amgen (AMGN 63.20, +2.71), Colgate-Palmolive (CL 63.24, +2.76), Valero Energy (VLO 31.74, -0.07), Waste Management (WMI 35.49, +0.43), U.S. Steel (X 161.39, +16.06) all topped expectations.DJ30 +53.45 NASDAQ +18.70 SP500 +6.16
09:15 am : S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +9.8.
09:01 am : S&P futures vs fair value: +5.7. Nasdaq futures vs fair value: +10.5. Futures have a muted response to an in-line home price reading. The S&P CaseShiller 20-City Home Price Index fell 15.8% year-over-year in May, which was very close to the expected decline of 16%. In deal news, Fording Coal (FDG) is selling all of its assets to Teck Cominco (TCK), with unit holders to receive $14.1 billion. In overseas earnings, French telecommunication giant Alcatel-Lucent (ALU) reported an unexpected second quarter loss, and announced that its CEO is stepping down. Sony (SNE) reported a 47% drop in net profit from the prior year due to intense competition, although the results topped expectations. The company issued downside revenue guidance for fiscal year 2008.
08:30 am : S&P futures vs fair value: +5.2. Nasdaq futures vs fair value: +10.8. Futures suggest a higher start to the trading day. U.S. Steel (X) is up 5.6% in premarket trading after reporting second quarter of $5.65 per share, easily beating the $2.91 consensus. The company benefited from substantial price increases that outpaced increases in input costs.
08:00 am : S&P futures vs fair value: +6.4. Nasdaq futures vs fair value: +13.2. Stock futures suggest a slightly higher start to the trading day.
In an effort to shore up its balance sheet, Merrill Lynch (MER) is selling $30.6 billion gross notional amount of U.S. CDOs for $6.7 billion, or 22 cents on the dollar, which will result in a $4.4 billion pretax write-down. Merrill also announced plans to raise $8.5 billion in a common stock offering.
In earnings news, Amgen (AMGN) topped expectations by $0.12, and raised its fiscal year 2008 earnings guidance. Waste Management (WMI), Teva Pharmaceuticals (TEVA) and Valero Energy (VLO) also reported earnings that topped estimates.
06:14 am : S&P futures vs fair value: -1.7. Nasdaq futures vs fair value: -1.8.
06:14 am : FTSE...5291.70...-20.90...-0.4%. DAX...6277.60...-73.55...-1.2%.
06:14 am : Nikkei...13159.45...-194.33...-1.5%. Hang Seng...22258.00...-429.21...-1.9%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
Market Data 
Markets 
AI
