Market Update 080903 http://biz.yahoo.com/mu/update.html 4:25 pm : Wednesday marked a choppy session for Wall Street, with the major indices settling in mixed fashion following a late-session recovery effort. The trading action came as traders digested volatile crude prices, a better-than-expected manufacturing reading and the Fed's Beige Book.
In the end, the Dow rose 0.1%, while the S&P 500 and Nasdaq fell 0.2% and 0.7%, respectively. The Nasdaq's underperformance was largely due to some warnings out of the tech sector.
The tech sector fell 1.7%. Shares of Corning (GLW 17.04, -2.46) were pummeled after the company issued a third quarter earnings warning due to lower-than-expected LCD glass shipments. The company cited an industry inventory glut. Semiconductor stocks fell 4.2%, after Corning's outlook raised demand concerns about LCD TVs, monitors and notebook computers. In addition, several semiconductor companies presented at the Citigroup Global Tech Conference.
Financials ( +1.4%) were an area of strength. Bond insurer Ambac Financial (ABK 8.61, +1.54) confirmed that it received regulatory approval from the Commissioner of Insurance of the State of Wisconsin to capitalize and restart Connie Lee Insurance, which will provide insurance for the municipal bond market. Lehman Brothers (LEH 16.85, +0.72) was once again in focus, with continued speculation that the struggling bank will be taken over or receive a capital infusion.
The consumer discretionary (+0.5%) sector outperformed, benefiting from a 1.6% rise in retail stocks. Staples (SPLS 25.17, +0.40) reported a 16% year-over-year drop in its second quarter earnings per share, which matched Wall Street's forecast. Meanwhile, shares of General Motors (GM 11.36, +0.71) rose 6.7% after the automaker posted a smaller-than-expected decline in August sales.
In other corporate news, Coca-Cola (KO 51.67, -0.29) is buying a Chinese juice company in a deal valued at roughly $2.4 billion.
Shares of ConAgra (CAG 19.62, -1.84) fell 8.6% after the food company gave an earnings warning due to underperformance in its consumer business.
In economic news, factory orders remain surprisingly strong, with the fifth straight month of positive growth. July factory orders rose 1.3% (consensus +1.0%). Excluding transportation, orders rose 1.0%. In addition, unfilled orders were up 0.7%, marking the 29th increase in the last 30 months, and indicating that manufacturing sector will remain busy. Orders in June were revised higher to 2.1% from 1.7%.
The Fed's Beige Book -- a collection of anecdotal economic reports from the 12 Federal Reserve districts -- showed an economic slowdown in most districts. At the same time, most districts continued to report price pressures due to the elevated costs of energy, food and other commodities. Wage pricing pressures were moderate, as the sluggish economic environment has allowed businesses to limit their salary increases.
Crude oil prices traded in a volatile manner, falling as much as 2.3% before recovering to settle the day with a 0.3% loss at $109.42 per barrel. Commodities as a whole fell 0.5%.DJ30 +15.96 NASDAQ -15.51 NQ100 -0.9% R2K +0.5% SP400 -0.2% SP500 -2.60 NASDAQ Adv/Vol/Dec 1477/2.13 bln/1302 NYSE Adv/Vol/Dec 1614/1.21 bln/1491
3:30 pm : Stocks recover some losses as the financial sector (+1.0%) rallies to session highs. The buying interest in financials is mostly broad-based, although the thrifts & mortgages (+2.7%) group is garnering a good deal of interest.
The Dow and S&P 500 post a modest loss. The Nasdaq is trailing, as semiconductors (-4.5%) remain under pressure.
The Dollar Index (unch) gave up its early gains, but its advance over the previous few sessions has sent it into positive territory for the year, up 1.8%. If the Dollar Index posts a gain in 2008, it would mark the first yearly gain in three years after falling 8.3% in both 2007 and 2006.DJ30 -18.48 NASDAQ -19.54 SP500 -6.08 NASDAQ Adv/Vol/Dec 1440/1.72 bln/1334 NYSE Adv/Vol/Dec 1425/885 mln/1629
3:00 pm : A recovery attempt is met with selling resistance, sending the major indices back on the defensive. NYSE volume is on the light side with 791 million shares exchanging hands, although the current level is well ahead of last week's very low average volume.
GM (GM 11.28, +0.63) reported a 20% year-over-year decline in August North American vehicle sales. The results were better than the expected 29% decline. GM feels that the market bottom was in July, although they are not looking for a large improvement.
Commodities have pared a large portion of their intraday losses. The CRB Index is down 0.6% after being down as much as 1.8%. Crude prices are down 0.3% to $109.35 per barrel.DJ30 -45.02 NASDAQ -22.21 SP500 -8.68 NASDAQ Adv/Vol/Dec 1373/1.53 bln/1377 NYSE Adv/Vol/Dec 1394/791 mln/1676
2:30 pm : Stocks trade in a volatile manner as market participants digest the Fed's Beige Book. The report said economic activity has been slow in most of the 12 Federal Reserve districts.
The stock market heads toward session lows with all ten economic sectors in negative territory.DJ30 -52.92 NASDAQ -20.58 SP500 -9.69 NASDAQ Adv/Vol/Dec 1377/1.40 bln/1336 NYSE Adv/Vol/Dec 1340/723 mln/1698
2:05 pm : Stocks had been paring losses, but the trend has reversed on the release of the Fed's Beige Book, which is a survey of anecdotal regional economic activity.
The Fed sees moderate wage pressure as hiring slows and that almost all districts are seeing price pressures. Fed also says mortgage loan demand is weakening and economic activity has been slow.
All three of the major indices have slipped on the news. DJ30 -32.89 NASDAQ -17.97 SP500 -7.02 NASDAQ Adv/Vol/Dec 1412/1.29 bln/1296 NYSE Adv/Vol/Dec 1365/664 mln/1675
1:30 pm : Stocks make a modest recovery effort. Crude oil prices have pared some losses, currently down 0.6% to $109.15 per barrel after trading with a loss of 2.3% in earlier trade.
Market breadth is mixed. Decliners outpace advancers by 6-to-5 on the NYSE, while advancers outpace decliners by 10-to-9 on the Nasdaq Composite. The Nasdaq contains a lot of small-cap stocks, which are improving its market breadth as the Russell 2000 Index is outperforming with a 0.3% gain.DJ30 -38.75 NASDAQ -19.49 SP500 -7.94 NASDAQ Adv/Vol/Dec 1400/1.14 bln/1260 NYSE Adv/Vol/Dec 1375/590 mln/1638
1:00 pm : The major indices trade near session lows, with only the financial sector (+0.2%) in positive territory.
Ford (F 4.59, +0.08) reported a 27% year-over-year drop in August North American vehicle sales, which was worse than the expected 21% decline. Consumer preference continues to shift to smaller vehicles, resulting in 53% decline in SUV sales and a 39% drop in truck sales.
Toyota (TM 89.66, +0.83) also reported a drop in August North American sales, with a year-over-year decline of 9.4%. The Lexus Division saw a sales decline of 9.1%.
Separately, Boston Fed President Rosengren said that a low fed funds rate provides much less stimulus than usual during a credit crunch. Rosengren noted that the U.S. economy is expected to soften in the second half of 2008, so the unemployment rate could rise above 6%.DJ30 -69.77 NASDAQ -20.98 SP500 -10.32 NASDAQ Adv/Vol/Dec 1335/1.04 bln/1325 NYSE Adv/Vol/Dec 1297/543 mln/1710
12:30 pm : The stock market stabilizes near recently reached session lows.
Within the S&P 500, 353 stocks are posting a loss. Weakness is led by tech names, which take up eight of the top ten laggard spots. Exxon Mobil (XOM 77.74, +0.42) and Procter & Gamble (PG 71.14, +0.67) are showing leadership.DJ30 -65.45 NASDAQ -21.06 SP500 -9.38 NASDAQ Adv/Vol/Dec 1312/948 mln/1334 NYSE Adv/Vol/Dec 1271/497 mln/1711
12:00 pm : Stocks are posting significant declines at midday after the fourth straight drop in crude prices and a better-than-expected manufacturing sector reading was unable to counter selling pressure.
Weakness is broad-based with all ten of the economic sectors posting a loss. Commodity and technology related stocks are down the most.
Crude prices (-1.4% at $108.23) have declined for the fourth straight day, marking a 36% retreat from the July 11 all-time high. Commodities as a whole are down 1.3%.
As a result, the energy (-1.2%) and materials (-1.6%) sectors are on the defensive. Coal and consumable fuels is the weakest group, falling 7.3% after slipping 10.4% in the previous session.
The tech sector (-2.1%) is the main laggard. Shares of Corning (GLW 17.56, -1.94) are down 10% after the company issued a third quarter earnings warning due to lower-than-expected LCD glass shipments. Semiconductor stocks (-3.0%) are also under pressure as the Citigroup Global Tech Conference gets underway.
The financial sector (-0.2%) is holding up reasonably well thanks to some relative strength in REITs and specialized finance (+0.9%).
Retailers are bucking the negative trend with a modest gain of 0.5%. Staples (SPLS 25.08, +0.31) reported a 16% year-over-year drop in its second quarter earnings per share, but the stock is posting a gain after the company forecast earnings per share growth in the low single digits. The 1.4% drop in crude prices is also benefiting retail stocks.
In deal news, Coca-Cola (KO 51.81, -0.15) is buying a Chinese juice company in a deal valued at roughly $2.4 billion.
In economic news, factory orders remain surprisingly strong, with the fifth straight month of positive growth. July factory orders rose 1.3% (consensus +1.0%). Excluding transportation, orders rose 1.0%. Orders in June were revised higher to 2.1% from 1.7%. DJ30 -85.57 NASDAQ -23.44 SP500 -10.72 NASDAQ Adv/Vol/Dec 1265/815 mln/1339 NYSE Adv/Vol/Dec 1179/432 mln/1757
11:30 am : The major indices fall toward session lows in broad-based weakness. Only three sectors are posting a gain, led by financials (+0.5%).
Retailing stocks are holding up well, with a gain of 1.5%. Staples (SPLS 25.58, +0.81) reported a 16% year-over-year drop in its second quarter earnings per share, but the stock is posting a gain after the company forecast low single-digit earnings per share growth in 2008. The 1.9% drop in crude prices is also benefiting retail stocks.
Commodity related stocks are once again under pressure, with the CRB Index falling 1.2%. The energy sector is down 1.3% and the materials sector is down 1.6%.DJ30 -28.66 NASDAQ -7.99 SP500 -5.12 NASDAQ Adv/Vol/Dec 1449/677 mln/1120 NYSE Adv/Vol/Dec 1435/361 mln/1465
11:00 am : The stock market fluctuates near the unchanged mark. Six of the ten sectors are posting a loss, with tech (-0.9%) and utilities (-0.9%) the worst performing areas. The consumer discretionary sector (+0.6%) is posting the largest gain thanks to strength in retailers (+1.4%).
Standard & Poor's downgraded the credit ratings of regional banks First Horizon (FHN 11.05, -0.64) and National City (NCC 4.93, -0.13). Zions Bancorp (ZION 30.13, +0.68) and Regions Financial (RF 10.98, -0.07) had their ratings affirmed, but their outlooks were revised to negative from stable.
The financial sector is up 0.2%.DJ30 -12.13 NASDAQ -2.04 SP500 -2.41 NASDAQ Adv/Vol/Dec 1492/535 mln/1007 NYSE Adv/Vol/Dec 1554/283 mln/1288
10:30 am : The stronger-than-expected factory order induced gains fade, as the major indices fall back into negative territory in choppy trading.
The tech sector (-1.1%) is the main laggard. Corning (GLW 17.97, -1.53) is one of the worst-performing tech names after announcing lower-than-expected LCD glass demand. Semiconductors (-1.7%) are also coming under selling pressure, presumably, less-than-expected LCD glass demand means there is lower-than-expected demand for notebook computers, flat panel monitors and LCD televisions.DJ30 -12.05 NASDAQ -5.02 SP500 -1.94 NASDAQ Adv/Vol/Dec 1345/398 mln/1076 NYSE Adv/Vol/Dec 1478/211 mln/1302
10:05 am : Factory orders remain surprisingly strong, with the fifth straight month of positive growth. Just hitting the wires, July factory orders rose 1.3% (consensus +1.0%). Excluding transportation, orders rose 1.0%. Orders in June were revised higher to 2.1% from 1.7%.
The stock market recovered some losses and then gets a modest boost on the release of the economic data. The major indices trade with a slight gain.
Financial stocks (unch) are in focus this morning. Goldman Sachs (GS 164.04, -1.28) had its third quarter and fiscal year 2008 earnings estimates cut at Credit Suisse. The firm cited the the widening in the cost of asset price declines/spread, weaker trading volumes, and sparse investment banking activity.
Lehman Brothers (LEH 16.40, +0.27) is once again in focus. A commodity hedge fund that Lehman has a 20% stake in will close down after losing 27% in August, according to Bloomberg.com. There are continued reports of possible interest in the struggling investment bank, including HSBC (HBC 78.25, -0.23).DJ30 +14.17 NASDAQ +4.14 SP500 +1.02 NASDAQ Adv/Vol/Dec 1195/214 mln/1063 NYSE Adv/Vol/Dec 1444/122 mln/1217
09:40 am : Stocks get off to a sluggish start, although declines are only modest.
Crude oil prices are down 1.2% to $108.41 per barrel, marking the fourth consecutive drop. Of note, the government's weekly energy inventory report is delayed until Thursday due to Labor Day.
In corporate news, shares of Corning (GLW 18.01, -1.49) are plummeting after the company issued a third quarter earnings warning due to lower-than-expected LCD glass shipments. Likewise, ConAgra (CAG 19.82, -1.64) issued downside earnings guidance for its next quarter due to underperformance in its consumer foods business.
Coca-Cola (KO 51.58, -0.38) is buying a Chinese juice company in a deal valued at roughly $2.4 billion.DJ30 -49.66 NASDAQ -10.16 SP500 -5.62
09:00 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -4.8. Futures are steadily recovering from their 7:30 ET premarket lows, although a lower start to the trading day is still indicated. ConAgra (CAG) is down 4.9% in premarket trading after giving an earnings warning due to underperformance in its consumer business. The food company was also downgraded to Underperform from Buy at Merrill Lynch. (Note: It was previously incorrectly reported that Credit Suisse downgraded ConAgra, this is incorrect, Credit Suisse's rating on ConAgra remains Neutral.)
08:31 am : S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -8.8. A lower start is expected. Shares of bond insurer Ambac Financial Group (ABK) are up 13% in premarket trading. The company confirmed that it received regulatory approval from the Commissioner of Insurance of the State of Wisconsin to capitalize and restart Connie Lee Insurance, which will provide insurance for the municipal bond market.
08:24 am : S&P futures vs fair value: -3.3. Nasdaq futures vs fair value: -5.8. The stock futures recovery effort runs into some resistance. Corning (GLW) issued downside earnings guidance for its third quarter, primarily due to lower-than-expected shipments of LCD glass. Shares are down 9% ahead of the open.
08:05 am : S&P futures vs fair value: -7.3. Nasdaq futures vs fair value: -12.5. Futures suggest a lower start to the trading session, recently falling to session lows. In earnings news, retailer Staples (SPLS) reported a drop in quarterly earnings, but the results met Wall Street's forecast. In corporate news, Coca-Cola (KO) offered to Buy a Chinese juice maker for $2.4 billion. Oil is down 1.4% to $108.18 per barrel following its steep drop in the previous session.
06:23 am : S&P futures vs fair value: -2.4. Nasdaq futures vs fair value: -6.0.
06:23 am : FTSE...5507.40...-113.30...-2.0%. DAX...6458.62...-59.85...-0.9%.
06:23 am : Nikkei...12689.59...+80.12...+0.6%. Hang Seng...20585.06...-457.40...-2.2%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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