Market Update 080812 http://biz.yahoo.com/mu/update.html 4:15 pm : Several negative items out of the financial sector sent the stock market tumbling more than 1% on Tuesday, overshadowing the third consecutive drop in crude prices and a decrease in the trade deficit.
The financial sector dropped 5.2%. The sector is down 22% from its 52-week high, although it is up 26% from its July 15 multiyear low.
UBS (UBS 20.35, -1.34) reported its fourth straight quarterly loss and is separating its business divisions into three independent units. Wachovia (WB 16.04, -2.17) reported a wider second quarter net loss in its SEC filing than was first reported.
JPMorgan Chase (JPM 37.99, -3.90) disclosed in a regulatory filing that trading conditions have deteriorated compared to the second quarter, noting that spreads on mortgage-backed securities have widened, causing losses of $1.5 billion since July. JPM had its 2008, 2009, and 2010 earnings estimates cut at brokerage firm Ladenburg Thalmann.
Morgan Stanley (MS 42.61, -2.78) said it is going to repurchase $4.5 billion in auction rate securities, but the New York Attorney General said the move is "too little, too late," according to media reports. Morgan Stanley's credit rating was downgraded to A1 from Aa3 at Moody's.
Goldman Sachs (GS 166.79, -11.21) had its earnings estimates cut by influential Oppenheimer analyst Meredith Whitney, citing customer volumes, weak global equity markets and weak advisory and underwriting revenue. In addition, Goldman had its earnings estimates cut at Deutsche Bank and Credit Suisse.
Although financials were the worst-performing sector by far, there was weakness in other areas as well. Eight of the ten sectors posted a loss, with utilities tumbling 2.1% after Constellation Energy (CEG 61.04, -12.00) said in a regulatory filing that it may have to post collateral if its senior unsecured credit ratings decline below contractual levels.
The tech sector (unch) outperformed on a relative basis. Shares of Apple (AAPL 176.87, +3.31) got a boost after Lehman Brothers said iPhone demand may surpass Wall Street's expectations. As a result, the tech-heavy Nasdaq Composite posted a narrower loss than its counterparts.
The materials sector (+0.5%) posted the largest gain. Agriculture chemical company Monsanto (MON 111.44, +3.56) gave a strong gross profit growth outlook for its corn seeds and traits business.
In typical fashion, crude prices traded in a volatile manner, rising as much as 1.3% before settling with a loss of 1.0% at $113.31 per barrel. There was no clear catalyst for the decline in oil prices.
In economic news, the June trade balance unexpectedly narrowed, which will provide a strong boost to third quarter GDP. Specifically, the real (price adjusted) trade deficit fell to $39.1 billion, from $43.1 billion in May.DJ30 -139.88 NASDAQ -9.34 NQ100 -0.01% R2K -0.8% SP400 -1.0% SP500 -15.73 NASDAQ Adv/Vol/Dec 1196/2.08 bln/1608 NYSE Adv/Vol/Dec 1061/1.11bln/2062
3:30 pm : The major indices fall to fresh session lows following a wave of selling-interest. Financials (-5.7%) are leading the market lower, although consumer discretionary stocks (-1.5%) also took a notable turn south.
Only the materials (+0.7%) and consumer staples (+0.5%) sectors remain in positive territory.DJ30 -147.20 NASDAQ -13.29 SP500 -15.58 NASDAQ Adv/Vol/Dec 1148/1.73 bln/1628 NYSE Adv/Vol/Dec 1062/826 mln/2049
3:00 pm : The S&P 500 trades in a choppy manner near session lows, while the Nasdaq continues to outperform near the unchanged mark.
Shares of exchange operators CME Group (CME 340.99, -9.20) and Nymex (NMX 77.10, -3.47) go on the retreat after the Chicago Tribune reports that tax issues may undermine the CME Group's $8.3 billion bid for Nymex. As the current deal stands, Nymex seat holders may be taxed as high as 32% instead of at the long-term capital gain rate of 15%, so Nymex members are pushing to renegotiate the deal, according to the Tribune's sources.
The financial sector is now down 4.6%.DJ30 -100.96 NASDAQ -2.75 SP500 -9.86 NASDAQ Adv/Vol/Dec 1222/1.52 bln/1556 NYSE Adv/Vol/Dec 1187/731 mln/1901
2:30 pm : Stocks catch a modest bid as oil prices go back on the decline in volatile fashion. Crude is now down 1.3% at $113.00 per barrel. The Nasdaq is posting a slight gain, while the Dow and S&P 500 remain in the red.
Airlines are posting a solid 4.0% gain, benefiting from the drop in oil prices and several airlines being upgraded to Overweight from Neutral or Underperform at JPMorgan.
The financial sector (-3.8%) extends its losses in broad-based weakness. Investment banks and brokerages are down 6.7%, followed by a 5.7% loss in the diversified financials group. Office REITs are outperforming on a relative basis with a decline of 0.6%.DJ30 -76.37 NASDAQ +0.47 SP500 -7.75 NASDAQ Adv/Vol/Dec 1198/1.43 bln/1555 NYSE Adv/Vol/Dec 1204/685 mln/1878
2:00 pm : The stock market continues to post a substantial loss as buyers have not been showing much interest. Despite this session's decline, stocks have had a nice run of late -- the S&P 500 is up 7.9% in less than a month.
Crude continues to fluctuate, now down 0.3% to $114.01 per barrel. DJ30 -104.38 NASDAQ -5.61 SP500 -9.63 NASDAQ Adv/Vol/Dec 1156/1.29 bln/1587 NYSE Adv/Vol/Dec 1125/614 mln/1932
1:30 pm : The major indices are on the decline, as the financial sector slips to session lows (-3.3%). Financials have been a laggard throughout the session, as the majority of news has been negative.
Only two of the 88 stocks within the sector are posting a gain -- Boston Properties (BXP 103.78, +0.29) and Freddie Mac (FRE 5.66, +0.06). JPMorgan Chase (JPM 38.98, -2.91) is the main laggard after stating that it has $1.5 billion in losses since July related to deteriorating trading conditions.DJ30 -98.35 NASDAQ -4.86 SP500 -9.84 NASDAQ Adv/Vol/Dec 1152/1.19 bln/1567 NYSE Adv/Vol/Dec 1149/571 mln/1895
1:05 pm : The major indices are making a bit of an upward push.
Large-cap tech stocks are outperforming as the Nasdaq 100 is up 0.5%. Leading the index higher is Apple (AAPL 178.36, +4.80). Yesterday, Apple indicated sales for iPhone-related applications on its App Store are performing very well. The stock has been trending higher during recent sessions.
Unlike yesterday's session, Treasuries have found favor. The benchmark 10-year Note is up 18 ticks and yielding 3.93%. Meanwhile, the 30-year Bond is up 26 ticks and yielding 4.55%.DJ30 -60.25 NASDAQ +0.37 SP500 -6.12 NASDAQ Adv/Vol/Dec 1178/1.10 bln/1502 NYSE Adv/Vol/Dec 1154/529 mln/1862
12:25 pm : The major indices trade with a loss, roughly in the middle of this session's trading range.
Goldman Sachs (GS 170.04, -7.96) had its 2008 and 2009 earnings estimates cut at Credit Suisse, marking the third major brokerage to cut Goldman's earnings forecast today. Credit Suisse cited challenging market conditions as a reason for the lowered estimate.
The utilities sector (-1.4%) is underperforming. Baltimore-based Constellation Energy (CEG 65.76, -7.28) tumbles 10%, after a delayed reaction to a regulatory filing released midday yesterday, which stated that the company would be required to post collateral if its senior unsecured credit ratings decline below contractual levels.DJ30 -67.90 NASDAQ -0.32 SP500 -6.46 NASDAQ Adv/Vol/Dec 1146/980 mln/1517 NYSE Adv/Vol/Dec 1163/471 mln/1845
12:00 pm : The stock market is posting a loss due to several negative developments out of the financial sector, although stocks have recovered from session lows as a decline in oil prices and a better-than-expected trade balance report helps limit selling interest.
Crude prices traded in volatile fashion, with stocks inversely following the moves, as has been the case of late. Prices rose as much as 1.3% and fell as much as 1.9%. Currently, crude prices are down 1.0% at $113.30 per barrel, with no apparent catalyst for the decline.
Financials are the main drag on the stock market, falling 2.9%. UBS (20.60, -1.09) reported its fourth straight quarterly loss and is separating its business divisions into three independent units.
JPMorgan (JPM 39.20, -2.71) disclosed in a regulatory filing that trading conditions have deteriorated compared to the second quarter, noting that spreads on mortgage-backed securities have widened, causing losses of $1.5 billion since July.
Morgan Stanley (MS 42.94, -2.49) said it is going to repurchase $4.5 billion in auction rate securities, but the New York Attorney General said the move is "too little, too late," according to media reports. Morgan Stanley was downgraded to A1 from Aa3 at Moody's.
Goldman Sachs (GS 170.33, -7.67) had its earnings estimates cut at Oppenheimer due to customer volumes, weak global equity markets and weak advisory and underwriting revenue. In addition, Goldman was cut to Hold from Buy at Deutsche Bank.
Six of the ten sectors are in negative territory, with utilities (-1.4%) the next worst performing area after financials.
The tech sector (+0.3%) is providing leadership. Apple (AAPL 177.67, +4.11) climbed 2.4% after Lehman Brothers said iPhone demand may top expectations. As a result, the Nasdaq 100 (+0.5%) is handily outperforming the broader market.
In economic news, the June trade balance unexpectedly narrowed, which will provide a strong boost to third quarter GDP. Specifically, the real (price adjusted) trade deficit fell to $39.1 billion, from $43.1 billion in May. DJ30 -73.52 NASDAQ -0.79 SP500 -6.82 NASDAQ Adv/Vol/Dec 1154/889 mln/1490 NYSE Adv/Vol/Dec 1188/430 mln/1798
11:30 am : Stocks catch a bid as crude prices go back on the decline. The S&P 500 posts a modest loss, while the Nasdaq trades with a slight gain.
Crude oil futures continue their volatile run, with prices dropping to a loss of 1.7% at $112.51 per barrel from the unchanged mark. There is no apparent catalyst for the quick drop in prices.
In other commodity trading, corn prices are down 1.2% after the USDA raised its production expectations. Soybean prices are up 0.6%, as the USDA lowered its production expectations. Commodities as a whole are up 0.4% this session.DJ30 -61.31 NASDAQ +2.47 SP500 -5.26 NASDAQ Adv/Vol/Dec 1200/745 mln/1419 NYSE Adv/Vol/Dec 1212/372 mln/1736
11:00 am : The stock market stabilizes modestly above session lows as selling pressure eases. Seven of the ten sectors trade with a loss.
McDonald's (MCD 64.52, -1.43) is in the red this session after being downgraded to Neutral from Buy at UBS. The downgraded was prompted by several factors that could limit earnings per share upside, such as the possibility of increasing U.S. job loss, slowing U.S. fast food industry, slowing trends in Europe and the recent run up in the stock that has sent the relative price to earnings ratio near historic highs.DJ30 -101.53 NASDAQ -8.59 SP500 -9.07 NASDAQ Adv/Vol/Dec 997/605 mln/1556 NYSE Adv/Vol/Dec 1093/302 mln/1803
10:30 am : The financial sector (-3.0%) falls to session lows, although the other sectors are managing to stave off most of the selling pressure, which is helping the S&P 500 limit its losses.
The Nasdaq briefly touches positive territory, before pulling back into the red. Apple (AAPL 178.22, +4.66) is posting a solid gain after Lehman noted that iPhone demand may be outpacing expectations. Nasdaq Component First Solar (FSLR 252.26, +4.26) gains nearly 2% after fellow solar company LDK Solar (LDK 40.47, +6.85) posted blowout earnings.
Treasuries are enjoying buying interest as stocks slip. The 10-year note climbs 18 ticks, sending its yield down to 3.92% from 3.99%.DJ30 -88.17 NASDAQ -6.31 SP500 -7.61 NASDAQ Adv/Vol/Dec 1045/427 mln/1458 NYSE Adv/Vol/Dec 1120/217 mln/1699
10:00 am : The stock market trades with a modest loss, with eight of the ten economic sectors in negative territory. The financial sector (-2.2%) is the main laggard, as no other sector is posting a loss of more than 1%.
The materials sector (+1.2%) is a pocket of strength. Agriculture company Monsanto (MON 111.69, +3.82) is providing leadership after saying that gross profit in its corn seeds and traits business is expected to grow by roughly 25% in 2008 and expects corn gross profit to grow by another 25% to 30% in 2009. In 2007, corn seeds and traits accounted for 33% of Monsanto's $8.6 billion in revenue.
The energy sector (+0.6%) is also enjoying some buying interest.
The energy and materials sectors have had a rough third quarter on sinking commodity prices, falling 17.5% and 7.7%, respectively. By comparison, the S&P 500 is up 1.5% this quarter.DJ30 -56.01 NASDAQ -9.38 SP500 -6.14 NASDAQ Adv/Vol/Dec 887/235 mln/1445 NYSE Adv/Vol/Dec 1072/133 mln/1656
09:40 am : The stock market gets off to a negative start, although losses are relatively well contained considering that oil prices rebounded and there are several negative items out of the financial sector.
Financials are posting a 2.3% loss. UBS (UBS 21.11, -0.58) reported its fourth straight quarterly loss and is separating its business divisions into three independent units. JPMorgan (JPM 40.45, -1.47) disclosed in a regulatory filing that trading conditions have deteriorated compared to the second quarter, noting that spreads on mortgage-backed securities have widened, causing losses of $1.5 billion since July. Morgan Stanley (MS 43.98, -1.42) said it is going to repurchase $4.5 billion in auction rate securities, but the New York Attorney General said the move is "too little, too late," according to media reports. Morgan Stanley was downgraded to A1 from Aa3 at Moody's.
Goldman Sachs (GS 171.45, -6.55) had its earnings estimates cut at Oppenheimer due to customer volumes, weak global equity markets and weak advisory and underwriting revenue. In addition, Goldman was cut to Hold from Buy at Deutsche Bank.
Crude oil is trading with a gain of 0.2% at $114.56, after rebounding from a loss of 1.7%. Crude pared its losses as the dollar (-0.1%) gave up its gains and on reports that BP shut down a pipeline in Georgia due to safety concerns.
On the positive side, the June trade balance unexpectedly narrowed, which will provide a strong boost to third quarter GDP. Specifically, the real (price adjusted) trade deficit fell to $39.1 billion, from $43.1 billion in May.DJ30 -68.06 NASDAQ -8.17 SP500 -4.58
09:14 am : S&P futures vs fair value: -5.6. Nasdaq futures vs fair value: -3.5.
08:58 am : S&P futures vs fair value: -3.2. Nasdaq futures vs fair value: -3.0. Stock futures indicate a slightly lower start to the trading day. Crude oil (unch at $114.45) climbs to the unchanged mark as the dollar (unch) gives up its gains and reports indicate that BP (BP) temporarily shut down a pipeline in the Georgian Black Sea port due to safety concerns. In earnings news, retailer TJX Cos (TJX) reported a 24% year-over rise in second quarter earning per share to $0.47, which topped Wall Street's forecast by a penny. TJX recently hit a fresh 52-week high as consumer snap up bargains, while retailers as a whole are down 21% from their 52-week high.
08:35 am : S&P futures vs fair value: -3.2. Nasdaq futures vs fair value: -1.2. Futures suggest a slightly lower open after having a mostly muted reaction to the latest trade balance reading. The June trade deficit narrowed to $56.8 billion from the previous month's deficit of $59.2 billion. Economists forecast a deficit of $62 billion.
Separately, Goldman Sachs (GS) had its earnings estimates cut at Oppenheimer. Goldman's 2008 full year earnings estimate was cut to $14.32 per share from $15.5 (consensus $16.77) and 2009 was cut to $14.90 per share from $16.30 (consensus $19.75). The primary catalysts for the downward revision are customer volumes, weak global equity markets and weak advisory and underwriting revenue. In addition, Goldman was downgraded to Hold from Buy at Deutsche Bank.
08:05 am : S&P futures vs fair value: -1.8. Nasdaq futures vs fair value: +1.0. Futures suggest a muted open as a drop in oil prices helps to offset negative news out of the financial sector. UBS (UBS) reported its fourth straight quarterly loss and is separating its business divisions into three independent units. JPMorgan (JPM) disclosed in a regulatory filing that trading conditions have deteriorated compared to the second quarter, noting that spreads on mortgage-backed securities have widened, causing losses of $1.5 billion quarter-to-date. Morgan Stanley (MS) said it is going to repurchase $4.5 billion in auction rate securities, but New York Attorney General said the move is "too little, too late," according to media reports. Morgan Stanley was downgraded to A1 from Aa3 at Moody's. With regard to oil, prices are down 0.8% to $113.58 per barrel as the dollar climbs 0.3% and Russia says it is ending its current military operation against Georgia.
06:14 am : S&P futures vs fair value: -4.5. Nasdaq futures vs fair value: -5.5.
06:14 am : FTSE...5532.50...-9.30...-0.2%. DAX...6590.43...-19.23...-0.3%.
06:14 am : Nikkei...13303.60...-127.31...-1%. Hang Seng...21640.89...-218.45...-1.0%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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