Market Update 080828 http://biz.yahoo.com/mu/update.html 4:20 pm : Thursday marked another low volume session for stocks, but the lack of buying conviction didn't stop the major indices from trending more than 1% higher to finish near session highs. The advance was prompted by encouraging economic data, retreating oil prices, and leadership from the financial sector.
Trading volume on the NYSE failed to break one billion shares for the ninth straight session. Volume typically exceeds the one billion shares mark with relative ease. The lack of trading suggests there may be little conviction behind the stock market's recent moves. Nonetheless, the session's advance remains pleasing to bullish investors.
Stocks took off early following the announcement of second quarter GDP data. Growth was revised upward to 3.3% from a previously reported 1.9%. Exports and personal consumption played a key role and suggested the economy is faring far better than many headlines suggest. Additionally, trends in the data suggest third quarter GDP will expand at a similar rate.
Initial jobless claims for the week ending Aug. 23 fell 10,000 to 425,000. Meanwhile, the four-week moving average retreated to 440,250 from 446,250. The numbers reflect soft labor conditions and indicate a modest decline for August nonfarm payrolls is likely.
Crude futures climbed as much as 2% early on, moving higher on fear that Hurricane Gustav will disrupt Gulf production. As those fears subsided and a larger-than-expected build in natural gas inventories was announced oil dropped as much as 3.4%. It closed more than 2% lower, near $115.55.
Crude's retreat pushed the energy sector into the red. It finished 0.8% lower and was the only sector in the S&P 500 unable to post a gain.
Softer oil prices helped consumer discretionary stocks. Specifically, retailers fared well. Although, their performance is also attributable to a batch of better-than-expected earnings per share results from group members Genesco (GCO 35.58, +2.59), Coldwater Creek (CWTR 7.49, +0.55), Men's Wearhouse (MW 21.61, +1.60), Tiffany & Co. (TIF 43.85, +4.24), and Zale Corp. (ZLC 27.92, +4.77). The session's prevailing sense of optimism helped participants look past mixed outlooks from several of the retailers. Even Sears Holdings (SHLD 90.62, +3.64) climbed higher, despite missing the consensus earnings per share estimate.
The financial sector was the primary beneficiary of the session's buying efforts. It closed 4.5% higher. Providing the most influence were diversified financial service companies, which finished with a 5.4% gain.
Fannie Mae (FNM 7.95, +1.47) and Freddie Mac (FRE 5.28, +0.53) were a couple of the highest fliers, though. Fannie announced last evening it is shaking-up its management team to control credit losses, conserve capital, and provide liquidity to the mortgage market. Thrifts and mortgage lenders closed with a 10.9% advance.
Of the major indices, the Dow posted the largest advance. Its only component to finish lower was Coca-Cola (KO 53.12, -0.67), which was downgraded at Credit Suisse to Neutral from Outperform.
Week-to-date, the Dow is up 0.7%, the S&P 500 is up 0.6%, but the Nasdaq is down 0.2%.DJ30 +212.67 NASDAQ +29.18 NQ100 +0.8% R2K +2.0% SP400 +1.6% SP500 +19.02 NASDAQ Adv/Vol/Dec 2078/1.63 bln/753 NYSE Adv/Vol/Dec 2485/956 mln/646
3:30 pm : Stocks are fetching strong gains as the stock market heads into the final leg of afternoon trading. All three of the major indices remain more than 1% higher.
The only Dow component trading with a loss is Coca-Cola (KO 52.99, -0.80); the other 29 components are trading higher. As for the S&P 500, 85% of its members have advanced. 63% of the Nasdaq's members are sporting gains.
Volume remains exceptionally light on the NYSE, as has been the case for much of this week. A lack of volume behind the stock market's swings suggests there may be a lack of conviction to the moves.DJ30 +191.67 NASDAQ +26.20 SP500 +15.74 NASDAQ Adv/Vol/Dec 2022/1.23 bln/798 NYSE Adv/Vol/Dec 2355/616 mln/701
3:00 pm : The financial sector continues to show its strength. It is trading at a session high, up 3.6%. Diversified financial service players continue to provide the most leadership in the sector. The industry is up 4.1%.
Gains remain broad-based as energy is the only sector to trade with a loss. Its decline, however, has eased. After being down 2.3% it is now trading with a 1.0% loss.DJ30 +181.98 NASDAQ +26.43 SP500 +14.76 NASDAQ Adv/Vol/Dec 2010/1.13 bln/788 NYSE Adv/Vol/Dec 2353/570 mln/685
2:30 pm : Stocks continue to trend upward. The major indices are testing session highs.
Crude prices remain lower, down 2.2% to $115.50. The CRB Commodity Index is also down; it has shed 1.8%.
The dollar has reversed its slide this session and is now posting a slight gain. The dollar index is up 0.1% Thursday, and up 0.6% year-to-date.
The dollar's weakness in previous months provided a boon to U.S. exports, which helped second quarter GDP. Yet as the U.S. economy shows its resilience amid concerns of a global slowdown the dollar begins to look more attractive.DJ30 +192.15 NASDAQ +26.93 SP500 +15.73 NASDAQ Adv/Vol/Dec 1931/1.03 bln/842 NYSE Adv/Vol/Dec 2267/520 mln/763
2:00 pm : Nine of the ten major economic sectors are trading higher, supporting the session's advance.
Retailers continue to perform well, up 1.8% this session. Their advance has been helped by a batch of better-than-expected earnings per share results from group members. Coldwater Creek (CWTR 7.33, +0.39) was one such company announcing a positive upside surprise.
Many investors have been concerned about the financial health of apparel retailers amid a weakened economic environment. Yet CWTR has negligible long-term debt and a healthy coverage ratio. On the other hand, fellow women's retailer Talbots (TLB 13.33, +0.64) carries a debt-to-equity ratio of around 0.6 and reported a loss earlier this week.DJ30 +188.82 NASDAQ +23.99 SP500 +14.24 NASDAQ Adv/Vol/Dec 1924/917 mln/830 NYSE Adv/Vol/Dec 2283/473 mln/740
1:30 pm : Stocks continue to sport strong gains but remain off their session highs.
The advance has given the Dow a week-to-date advance of 0.5% and the S&P 500 a week-to-date advance of 0.3%. The Nasdaq is down 0.4% this week.
Selling pressure in Treasuries has eased. The 10-year Note is now down 7 ticks after being down 15 ticks just recently. The 30-year Bond is trading at the unchanged mark.DJ30 +166.91 NASDAQ +20.75 SP500 +13.05 NASDAQ Adv/Vol/Dec 1756/767 mln/927 NYSE Adv/Vol/Dec 2148/402 mln/843
1:05 pm : Broad-based gains continue to support the major indices. Typical of recent sessions, volume remains relatively light.
The Amex Airline Index is up 8.1%. Meanwhile, Dow Jones Transports are up 2.0% this session. Their ascent is due, largely, to the pullback in oil prices. Lower oil and fuel prices reduce operating expenses within the respective industries.
The year-to-date performance of the two industries is mixed, however. Amex Airline Index is down 30%, reflecting the challenge carriers face against fuel costs and implementing price hikes. Transports are up almost 12% this year.DJ30 +166.91 NASDAQ +20.75 SP500 +13.05 NASDAQ Adv/Vol/Dec 1756/767 mln/927 NYSE Adv/Vol/Dec 2148/402 mln/843
12:30 pm : Strong gains persist across the major indices. The Dow remains the best performing major index, even outperforming small and mid-cap indices.
Not all of the Dow's components are faring well, though. Coca-Cola (KO 53.06, -0.73) has fallen out of favor after Credit Suisse downgraded the stock to Neutral from Outperform. Chevron (CVX 86.14, -0.48) is also a lagging component as oil prices trade lower.
The Russell 2000 is up a healthy 1%. Its leading movers include bond insurer Ambac (AMK 6.13, +0.89) and retail jeweler Zale Corp. (ZLC 27.00, +3.85). Industrial flow equipment company Flowserve (FLS 137.65, +4.58) is leading the S&P 400 index higher.DJ30 +191.83 NASDAQ +24.37 SP500 +14.78 NASDAQ Adv/Vol/Dec 1734/689 mln/907 NYSE Adv/Vol/Dec 2114/362 mln/844
12:10 pm : Stocks are sporting solid gains midway through the session. The overall tone has been upbeat since the opening bell, thanks largely to some encouraging economic data, a recent retreat in oil prices, and leadership from financials.
Second quarter real GDP growth was revised upward to 3.3% from a previously reported 1.9%. Exports played a key role, as did personal consumption. The revised GDP number shows the economy is faring far better than many pessimists believed. Moreover, trends in the data suggest third quarter GDP will expand at a similar rate.
Initial claims for the week ending Aug. 23 fell 10,000 to 425,000. The four-week moving average, meanwhile, dipped to 440,250 from 446,250. The numbers reflect soft labor conditions and portend another modest decline in August nonfarm payrolls.
Crude oil had been up as much as 2% in the early going, but has since retreated to a loss of 2.5% to trade just above $115 per barrel. Crude prices have climbed during recent sessions as traders act on fear that Hurricane Gustav will force a production halt, causing an imbalance between supply and demand.
The energy sector is down more than 2.0% as a result of crude's decline.
Conversely, the slide in oil prices combined with better-than-expected earnings results from a handful of retailers, including Genesco (GCO 34.80, +1.81), Coldwater Creek (CWTR 7.36, +0.42), Men's Wearhouse (MW 21.69, +1.68), Tiffany & Co. (TIF 43.47, +3.86), and Zale Corp. (ZLC 27.07, +3.92), has helped the retail space gain ground. The positive upside surprise, along with the GDP data, suggests that consumers continue to spend and that conditions at some retailers are not as poor as feared. Still, some of the companies issued mixed outlooks. Shares of Sears Holdings (SHLD 89.77, +2.79) are also performing well, though the company missed the consensus earnings per share estimate.
Leadership has come from the financial sector. It is currently up 3%.
Fannie Mae (FNM 7.36, +0.88) and Freddie Mac (FRE 5.30, +0.55) are gaining attention following Fannie's announcement that it is shaking-up its management team to control credit losses, conserve capital, and provide liquidity to the mortgage market. Meanwhile, bond insurer MBIA (MBI 14.71, +2.73) is soaring after the company announced it is going to reinsure a $184 billion par value portfolio of municipal bonds insured by Financial Guaranty Insurance Company. DJ30 +179.94 NASDAQ +20.40 SP500 +13.44 NASDAQ Adv/Vol/Dec 1677/599 mln/909 NYSE Adv/Vol/Dec 2001/312 mln/940
11:35 am : The energy sector has fallen to a fresh session low, down 1.6%. Broad-based advances are helping limit the impact of energy's retreat. Energy is the third largest economic sector in the S&P 500, behind technology (+0.8%) and financials (+2.2%), respectively.
The session's overall tone has been largely upbeat since the opening bell. Sentiment was helped by a GDP report that indicated the U.S. economy is much stronger than many feared.
The strength of the U.S. economy has also helped the dollar. The greenback is trading near the unchanged mark after being down as much as 0.6%, according to the Dollar Index.DJ30 +149.41 NASDAQ +20.04 SP500 +9.88 NASDAQ Adv/Vol/Dec 1649/475 mln/893 NYSE Adv/Vol/Dec 2056/248 mln/812
11:00 am : Stocks have extended their gains. Each of the major indices is trading near their session highs.
The advance follows a retreat in oil prices. Crude had been up as much as 2% early on, but recently fell as much as 0.5%. It is currently trading just below the unchanged mark.
The energy sector is faltering as a result. It is currently down 0.7%, near its session low. The energy sector is still up 0.8% week-to-date. Although, until the session's decline, energy had been sporting the strongest week-to-date advance.
Oil exploration and production companies have been behind the moves. The industry group is up 2.6% week-to-date, despite a 2.8% drop this session.DJ30 +137.36 NASDAQ +19.10 SP500 +10.00 NASDAQ Adv/Vol/Dec 1636/376 mln/818 NYSE Adv/Vol/Dec 1888/191 mln/930
10:30 am : The Dow Jones Industrial Average is outperforming the S&P 500 and the Nasdaq. Only four Dow components are trading lower.
The Dow's best performer is Caterpillar (CAT 71.11, +1.55). The company stated it expects weakness in rich countries in coming periods, but believes China will still be strong, according to Reuters.
The advance in crude prices has softened. Oil futures are now trading near the unchanged mark, or a bit above $118. Earlier they were trading near $120. Week-to-date, oil remains 3.4% higher.
Energy is trading off earlier levels as well. Energy had been up as much as 0.8% shortly after opening, but is now trading near the unchanged mark.DJ30 +97.06 NASDAQ +11.00 SP500 +7.83 NASDAQ Adv/Vol/Dec 1400/241 mln/940 NYSE Adv/Vol/Dec 1798/122 mln/943
10:00 am : Gains fluctuate, but stocks continue to sport a solid advance.
Distillers and vintners compose one of the worst performing industry groups. The underwhelming showing is largely attributable to Brown Forman (BFB 72.04, -4.98). The maker of whiskeys and spirits announced earlier today earnings per share results that missed the consensus estimate, despite year-over-year accretion.
One of the better performing groups is thrifts and mortgages. Its advance is owed to Fannie Mae (FNM 6.85, +0.36) and Freddie Mac (FRE 5.09, +0.34). Fannie announced after yesterday's close a shake-up affecting its chief financial officer, chief risk officer, and chief business officer. Fannie's chief executive, however, remains unaffected. The new appointments will be responsible for controlling credit losses, conserving capital, and providing liquidity to the mortgage market.DJ30 +103.65 NASDAQ +13.69 SP500 +9.23 NASDAQ Adv/Vol/Dec 1356/97 mln/748 NYSE Adv/Vol/Dec 1849/48 mln/581
09:45 am : Stocks have opened in positive territory. All three of the major indices are sporting solid gains.
All ten of the major economic sectors are moving higher. Consumer staples (+0.1%) is currently the primary laggard, while the influence of financials (+1.2%) provides leadership. Telecom (+1.6%) is the best performing sector, though.
The interest in stocks, bolstered by a better-than-expected second quarter GDP reading and a reduction in weekly jobless claims, has put pressure on Treasuries. The resiliance of the U.S. economy is encouraging to equity investors looking for a higher return than offered by government debt. The benchmark 10-year Note is down 10 ticks.DJ30 +90.79 NASDAQ +14.56 SP500 +9.49
09:15 am : S&P futures vs fair value: +8.0. Nasdaq futures vs fair value: +9.0. Stock futures remain improved from earlier levels, continuing to indicate a positive start to trading Thursday. Sentiment improved with better-than-expected GDP data, offsetting the threat of higher oil prices.
09:00 am : S&P futures vs fair value: +8.3. Nasdaq futures vs fair value: +11.3. Stock futures remain improved from earlier levels and indicate an upward start. Clothing and apparel retailers Genesco (GCO), Coldwater Creek (CWTR), and Men's Wearhouse (MW) all announced better-than-expected earnings results for the latest quarter, excluding extraordinary items. Their respective outlooks, however, were mixed. Genesco issued upside guidance, and Coldwater Creek announced a forecast that is in-line with the consensus forecast. Men's Wearhouse issued downside guidance. Meanwhile, Sears Holdings (SHLD) missed the consensus earnings per share estimate of $0.33, by bringing in just $0.21 per share, excluding reserves. Williams-Sonoma (WSM) bested the consensus earnings per share estimate by $0.01, bringing in $0.08 per share, but it issued downside guidance.
08:30 am : S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +4.5. Stock futures are bouncing higher on news that second quarter GDP has been upwardly revised to reflect growth of 3.3% from the rate of 1.9% indicated in the advance reading last month. Economists, on average, expected the revised number to come in at 2.7%. The personal consumption component was up 1.7%. It was expected to come in at 1.6% after the advance reading of 1.5%. Core personal consumption expenditures increased 2.1%, which is in stride with the rate that was forecast by economists and the advance reading. The GDP price index was 1.2%, which is more than the 1.1% rate that was widely expected and that was also posted initially. Separately, initial jobless claims for the week ending August 23 totaled 425,000, down from the prior week's 435,000 claims and even with the level economists estimated. Continuing claims climbed to 3.423 million from the previous week's 3.359 million continuing claims. The consensus estimate called for continuing claims of 3.39 million.
08:00 am : S&P futures vs fair value: +0.2. Nasdaq futures vs fair value: -3.0. Stock futures currently indicate a relatively flat start to Thursday's action. Oil futures continue to move higher, approaching $120 per barrel. Oil prices have advanced in recent sessions amid persistent concerns Hurricane Gustav will force a production halt. On the earnings front, retail jewelers Tiffany & Co. (TIF) and Zale Corp. (ZLC) both posted better-than-expected results. Tiffany earned $0.63 per share, besting the consensus of $0.55 per share, while Zale posted a loss of $0.48 per share, which was less severe than the loss of $0.57 per share that analysts forecast. Due at the bottom of the hour is the preliminary second quarter GDP report, which will garner attention from economists seeking revisions to the advanced second quarter GDP report released last month.
06:21 am : S&P futures vs fair value: +0.1. Nasdaq futures vs fair value: -1.0.
06:21 am : FTSE...5543.90...+18.50...+0.3%. DAX...6318.25...-2.78...-0.0%.
06:21 am : Nikkei...12768.25...+15.29...+0.1%. Hang Seng...20972.29...-492.43...-2.3%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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