Market Update 081016 http://biz.yahoo.com/mu/update.html 4:35 pm : Stocks swung widely with record volatility Thursday. The Dow was down almost 380 points at its session low, but was able to complete a near 800 point swing to close 400 points higher with a 4.7% gain. It finished at its high.
The Volatility Index hit an all-time high of 81 during the session. It registered that mark as stocks traded at their session low, but retreated to below 70 late in the session as stocks advanced in their final run of the session.
The session's gains were broad based, but the financial sector was a general laggard. It closed 1.7% higher.
Swiss banking giant UBS (UBS 17.33, +0.67) showed relative strength after the Swiss government said it will inject the equivalent roughly $5 billion into the firm and the Swiss central bank will purchase nearly $60 billion worth of toxic assets. The moves mirror those made by governments and central banks across the globe to restore the financial system and credit markets.
Further reflecting the difficult conditions facing financial firms, Citigroup (C 15.90, -0.33) and Merrill Lynch (MER 18.35, +0.11) both posted losses for the latest quarter. The losses stem largely from asset write-downs and other impairment charges.
Outside the financial sector, the global leader in handset sales, Nokia (NOK 15.54, +0.43), met earnings expectations, as did health insurer UnitedHealth (UNH 22.63, +0.96). Conglomerate United Technologies (UTX 52.88, +3.63) topped earnings expectations with its results.
Online auction site eBay (EBAY 14.97, -0.36) beat the consensus, but issued downside guidance for the fourth quarter. Its shares fell, but that didn't stop the Nasdaq from outperforming its counterparts. Fellow Nasdaq components Yahoo! (YHOO 12.99, +1.24) and Microsoft (MSFT 24.19, +1.53) advanced on reports that suggested Microsoft may still have an interest in Yahoo.
Airlines fared extremely well, Southwest Airlines (LUV 12.49, +0.93) and Continental Airlines (CAL 15.75, +2.91) both announced better-than-expected third quarter earnings per share results, helping lift the Amex Airline Index 21%. Meanwhile, competitors UAL (UAUA 10.30, +2.59) and US Airways (LCC 6.78, +1.49) rode the tailwind of their large-cap brethren. Their gains helped the Russell 2000 advance 6.9%.
Lower oil prices also bode well for airlines. During the session, oil futures fell below $70 per barrel for a time, but settled closer to $72 per barrel. Concerns of a global slowdown continue to cut the price of the commodity, as did today's word that crude inventories grew by 5.61 million barrels. Analysts expected a build less than half that.
Despite oil's slide, the energy sector made the strongest gains, advancing 7.8% on strength in oil and gas exploration and production companies (+12.1%). The sector's advance comes in stark contrast to its 15.5% dive in the prior session.
In economic news, filings for jobless benefits declined 16,000 to 461,000, which was below the consensus 470,000 claims. The four-week moving average ticked up to 483,250 from 482,500 and leaves things on track for a 10th consecutive month of nonfarm payroll declines.
Industrial production for September decreased 2.8%, which is worse than the 0.8% downturn that was anticipated. It was the largest decline since 1974, but excluding extraordinary happenings industrial production would have been positive.
The core rate for CPI dropped to 0.1% in September and will probably stay at that level, or even drop to zero for the next few months. Total CPI was flat and may well be flat to down for several more months given the drop in energy prices. DJ30 +401.35 NASDAQ +89.38 NQ100 +5.5% R2K +6.9% SP400 +3.9% SP500 +38.59 NASDAQ Adv/Vol/Dec 1862/3.35 bln/905 NYSE Adv/Vol/Dec 2195/2.0 bln/954
3:30 pm : Stocks recently moved to their best level of the session, but have pulled back a bit since. The upswing has put each of the major indices back into position to register a week-to-date gain.
At current levels, the Dow is looking to make the largest week-to-date advance in percentage terms. On Monday, the Dow posted its largest point gain ever and the largest percent gain since 1933.
McDonald's (MCD 54.53, +2.98) and Wal-Mart (WMT 54.40, +4.35) are providing leadership to the Dow.DJ30 +248.74 NASDAQ +51.53 SP500 +22.32 NASDAQ Adv/Vol/Dec 1686/2.83 bln/1055 NYSE Adv/Vol/Dec 1849/1.51 bln/1281
3:00 pm : The session is entering its final hour of trade and the major indices have made their way into positive ground to trade with solid gains. They remain off their best levels of the session, however.
Shortly after the opening bell the Dow was up 1.7%, the Nasdaq was up 2.4%, and the S&P 500 was up 1.9%.
Consumer staples (+1.7%) are sporting some of the strongest gains of the session. The defensive-oriented sector is also the best performer this year, though it was unable to completely resist the forceful selling pressures seen in recent market mayhem. It is down 20% year-to-date.DJ30 +61.41 NASDAQ +25.95 SP500 +1.44 NASDAQ Adv/Vol/Dec 1508/2.54 bln/1211 NYSE Adv/Vol/Dec 1430/1.36 bln/1688
2:30 pm : The major indices continue to chop along. The session has traded with a generally negative bias.
Dow Jones reports that Microsoft (MSFT 22.50, -0.16) has no interest in acquiring Yahoo! (YHOO 12.83, +1.08) and there are no discussions. When reports surfaced earlier that Microsoft thought a purchase of Yahoo sill made sense, shares of YHOO spiked higher. Despite the response by Microsoft, shares of YHOO remain elevated.
The broader tech sector (-1.0%) is back in the negative. It has traded between a gain of 1.9% and a loss of 4.7%.DJ30 -72.08 NASDAQ +1.74 SP500 -11.78 NASDAQ Adv/Vol/Dec 1303/2.34 bln/1391 NYSE Adv/Vol/Dec 1125/1.25 bln/1980
2:00 pm : Stocks are making a move upward again. The challenge is whether the major indices can limit selling pressure into the remaining hours of the session. As for the Dow, it has already swung nearly 400 points from its session low to the current level.
Recent gains are generally broad based, but financials continue to flounder. The sector remains down 3.5%. Though that is a substantial loss, it is better than the 6.8% decline it saw earlier.DJ30 +20.79 NASDAQ +23.67 SP500 -0.04 NASDAQ Adv/Vol/Dec 1459/2.18 bln/1230 NYSE Adv/Vol/Dec 1378/1.17 bln/1699
1:30 pm : The Dow and S&P 500 have been unable to hold gains. The Nasdaq, though still in positive ground, is retreating.
Despite broad declines, airline stocks are flying higher. In addition to sharply lower oil prices (69.95, -4.59), Southwest Airlines (LUV 12.30, +0.74) and Continental Airlines (CAL 15.04, +2.20) both announced third quarter earnings per share results that bested expectations. Their positive earnings surprise has spread to other carriers, helping to lift the Amex Airline Index more than 12%.
The industry's relative strength this session has also helped small-cap carriers like UAL (UAUA 8.84, +1.49) and US Airways (LCC 6.28, +0.99) surge. Their movement is helping the Russell 2000 (+1.0%) outperform the larger indices.DJ30 -54.96 NASDAQ +7.07 SP500 -7.62 NASDAQ Adv/Vol/Dec 1353/1.99 bln/1306 NYSE Adv/Vol/Dec 1215/1.08 bln/1863
1:00 pm : Stocks continue to trade with a generally negative bias. Decliners in the S&P 500 outnumber advancers by 3-to-2.
Financial stocks continue to show weakness. The sector is down 3.9% as the life and health insurance industry trades 10.5% lower.
Showing strength in the sector is residential REITs (+2.3%) and retail REITs (+0.9%).DJ30 -74.31 NASDAQ -1.70 SP500 -10.72 NASDAQ Adv/Vol/Dec 1270/1.81 bln/1362 NYSE Adv/Vol/Dec 1168/997 mln/1915
12:35 pm : Stocks made a concerted advance into positive territory recently. The Dow and the S&P 500 are now oscillating near the neutral line. The Nasdaq, however, is showing relative strength.
The tech-heavy Nasdaq is being led by Cisco (CSCO 17.14, +0.57) and Yahoo! (YHOO 13.36, +1.61). Yahoo is growing after Microsoft (MSFT 22.81, +0.15) made statements that a deal with the search company could still make sense. As a result, Google (GOOG 325.59, -13.58) is showing considerable weakness.DJ30 -18.88 NASDAQ +10.59 SP500 -5.22 NASDAQ Adv/Vol/Dec 1393/1.60 bln/1222 NYSE Adv/Vol/Dec 1339/895 mln/1719
12:00 pm : Volatility continues to move higher as investors remain uncertain, and at times fearful, of the future. As a result, the Volatility Index hit an all-time high of 81 earlier in the session.
The spike in volatility has come hand in hand with selling efforts that are extending the prior session's losses -- losses that have erased Monday's 11.6% surge in the S&P 500.
Stocks actually traded with gains early on, but weakness in the financial sector (-3.4%) spread to the broader market and took the major indices into the red.
Helping protect UBS (UBS16.90, +0.24) from further deterioration amid asset write-downs and earnings losses, the Swiss government and central bank are giving the company the equivalent of nearly $60 billion. The move comes as part of a global effort to stem weakness in the financial system.
The weakness in the broader financial system and, in turn, the markets has hedge funds facing continued pressure and redemption calls. Highland Capital is closing and unwinding its flagship fund, Crusader, according to CNBC reports.
Meanwhile, Citigroup (C 15.29, -0.94) and Merrill Lynch (MER 17.72, -0.52) showed continued weakness of their own by announcing losses earlier this morning. Both firms continue to be hit by asset write-downs or other impairment charges.
Elsewhere in earnings news, eBay (EBAY 14.22, -1.11) beat the consensus, but warned for the fourth quarter. Nokia (NOK 15.54, +0.43) and UnitedHealth (UNH 21.67, +0.00) met expectations, while United Technologies (UTX 48.95, -0.30) beat.
Separately, filings for jobless benefits declined 16,000 to 461,000, which was below the consensus 470,000 claims. Still, the labor market is soft as evidenced by the four-week moving average ticking up to 483,250 from 482,500. The level of claims leaves things on track for a 10th consecutive month of nonfarm payroll declines.
Industrial production for September decreased 2.8%, which is worse than the 0.8% downturn that was anticipated. This is the largest decline since 1974. Although, excluding extraordinary happenings industrial production would have been positive in September.
The core rate for CPI dropped to just 0.1% in September. This is a modest piece of positive news related to weak economic demand. The core rate dropped to 0.2% in August and now 0.1% in September. It will probably stay at this level and may even drop to zero for the next few months. Total CPI was flat and may well be flat to down for several more months given the drop in energy prices.
Oil is down to $70 per barrel, or off by nearly 6%, after news that weekly crude inventories grew by 5.61 million barrels, which is more than double the consensus forecast. DJ30 -127.99 NASDAQ -7.09 SP500 -14.26 NASDAQ Adv/Vol/Dec 1080/1.35 bln/1506 NYSE Adv/Vol/Dec 1002/777 mln/2049
11:30 am : Stocks have pulled up from their session lows, when the S&P 500 was down 4.6%. Losses remain deep, however, with all ten of the major economic sectors trading with losses in excess of 1%.
Sporting the least significant decline is the consumer staples sector. It is down 1.4% as companies like Archer Daniels Midland (ADM 16.53, +0.44) and Hershey (HSY 33.72, +0.75) provide leadership. Gains in HSY come despite news the company fell short of the consensus earnings per share estimate in the latest quarter.DJ30 -305.77 NASDAQ -42.84 SP500 -30.76 NASDAQ Adv/Vol/Dec 729/1.12 bln/1814 NYSE Adv/Vol/Dec 608/633 mln/2430
11:05 am : The major indices remain in negative territory as participants continue their selling efforts. The uncertainty guiding traders' hands has pushed volatility to new highs. The Volatility Index, or VIX, which is often referred to as the Fear Index, is currently at 79; it has never been higher.
Losses around the world are also deep. The Dow Jones World Index, excluding the U.S., is down 7.0%. Japan's Nikkei shed 11.4% and China's Hang Seng fell 4.8%. London's FTSE is off 4.4% and Germany's DAX is currently down 3.6%.
Weekly crude inventories had a build of 5.61 million barrels, which is more than double the consensus forecast. Oil is now near $71 per barrel, down 4%.DJ30 -299.87 NASDAQ -4.366 SP500 -31.86 NASDAQ Adv/Vol/Dec 690/902 mln/1785 NYSE Adv/Vol/Dec 605/531 mln/2377
10:30 am : Stocks have fallen into the red, reversing early gains and extending the prior session's massive downturn. The losses experienced by the S&P 500 during the prior session were the worst since the crash of 1987.
Stocks in the S&P 500 are now down 0.4% week-to-date. Recall, though, that the S&P 500 surged 11.6% this past Monday.
Weakness in the current session is largely owed to the financial sector (-4.1%). However, financials are still up 1.7% week-to-date, thanks to heavy gains earlier in the week.DJ30 -160.09 NASDAQ -21.78 SP500 -16.74 NASDAQ Adv/Vol/Dec 1225/621 mln/11168 NYSE Adv/Vol/Dec 1093/375 mln/1794
10:05 am : After a sharp climb, stocks are now descending. The early gains are being undermined by a weak financial sector (-1.8%) as every other sector had been trading with solid gains.
Financials remain under sharp scrutiny as banks and other financial outfits report their latest quarterly earnings results. Citigroup (C 15.70, -0.53) and Merrill Lynch (MER 18.09, -0.15) both reported billions in losses this morning amid continued write-downs.
Separately, the Philadelphia Fed Survey, an assessment of regional manufacturing conditions, came in with a reading of -37.5 for October. It was expected to come in at a reading of -10. The prior reading was a positve 3.8.DJ30 +33.69 NASDAQ +20.13 SP500 +3.89 NASDAQ Adv/Vol/Dec 1627/345 mln/662 NYSE Adv/Vol/Dec 1884/226 mln/914
09:45 am : Stocks are sporting solid gains in the early going. The major indices have fluctuated in the first few minutes, but recently made a strong jump.
The morning's strongest gains are seen in the energy sector (+3.1%). The sector was hit hard by intense selling pressure in the prior session, in which it fell 15.5%.
The advance by energy comes in the face of further declines in oil prices. Oil futures are currently down 1.2% and trading below $74 per barrel. The drop in oil futures brings their price to roughly half of their record highs.DJ30 +65.63 NASDAQ +18.54 SP500 +8.18 NASDAQ Adv/Dec 1562/641 NYSE Adv/Dec 1795/888
09:15 am : S&P futures vs fair value: +10.30. Nasdaq futures vs fair value: +1.50. The upbeat tone indicated by stock futures has eased a bit, but an upward start is still indicated. Industrial production for September decreased 2.8%, which is worse than the 0.8% downturn that was anticipated. The prior reading was revised a bit lower to indicate a 1.0% downturn. Capacity utilization for September totaled 76.4%, which is below the 77.9% that was expected and the prior reading of 78.7%. Separately, CNBC reports that hedge fund Highland Capital is closing and unwinding its flagship fund, Crusader.
09:02 am : S&P futures vs fair value: +15.50. Nasdaq futures vs fair value: +6.50. The tone in premarket trading has improved. Stock futures in both the S&P 500 and the Nasdaq 100 have a lead over fair value. Overnight U.S. dollar LIBOR rates fell more than 20 basis points to a bit below 1.94%. The one-month rate fell 8 basis points to 4.28%. Net long-term Treasury International Capital (TIC) flows for August totaled $14.0 billion, which is below the $30.0 billion that was widely expected.
08:30 am : S&P futures vs fair value: +7.60. Nasdaq futures vs fair value: -9.50. A mixed start is now indicated by stock futures. UnitedHealth (UNH) posted third quarter earnings and revenue results that were in-line with expectations. It also issued an in-line outlook. Baxter (BAX) announced better-than-expected earnings per share results for its latest quarter. The medical equipment company also issued upside guidance for the full year. Conglomerate United Technologies (UTX) also served up a batch of better-than-expected earnings per share results, despite falling a bit short of the consensus revenue estimate. UTX also lifted the low end of its full-year outlook. After yesterday's close, eBay (EBAY) disappointed its investors by issuing downside guidance for the fourth quarter, despite issuing an upside earnings per share surprise for the third quarter. In the latest batch of economic data, the September Consumer Price Index (CPI) was flat, which is better than the 0.1% increase that economists were expecting. The prior reading was unrevised at -0.1%. Excluding food and energy, the CPI was up 0.1%, which is better than the the 0.2% increase that was widely expected and also better than the prior reading of a 0.2% increase. Jobless claims for the week ending October 11 totaled 461,000. That was below the 470,000 claims that were expected and down from the prior week's 477,000 claims.
08:00 am : S&P futures vs fair value: -2.60. Nasdaq futures vs fair value: -18.80. Futures currently indicate a downward start to the trading session. Nokia (NOK) posted in-line earnings per share results for its fiscal third quarter. The global leader in handsets sees a sequential volume increase in the fourth quarter and expects its market share will be flat to slightly up. Merrill Lynch (MER) posted a loss of $5.56 per share in the third quarter. The firm incurred $5.7 billion in net write-downs. Citigroup (C) reported a loss of $0.60 per share. Revenue was down a sharp 23% year-over-year and the bank was hit with $4.4 billion in pretax write-downs. The Swiss government and central bank will inject the equivalent of $5.3 billion of capital into UBS (UBS) and assume $60 billion of risky assets from the financial giant, according to The Wall Street Journal.
06:28 am : S&P futures vs fair value: +5.70. Nasdaq futures vs fair value: -9.00.
06:28 am : Nikkei...8458.45...-1089.00...-11.40%. Hang Seng...15230.52...-767.80...-4.80%.
06:28 am : FTSE...3947.79...-131.80...-3.20%. DAX...4740.89...-120.70...-2.50%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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