Market Update 081029 http://biz.yahoo.com/mu/update.html 4:40 pm : The stock market settled with a 1.1% loss Wednesday after late-session surge made in the final hour following an FOMC rate cut was reversed in the final minutes of trade after headlines hit the wires that raised concerns regarding General Electric's (GE 19.20, -0.29) revenue in 2009. Meanwhile, commodities made one of the strongest gains on record as the dollar got hammered.
Specifically, the S&P 500 was up 3.1% with 10 minutes left in the session and then quickly sank to a 1.8% loss before settling with a decline of 1.1%. Small and mid-cap stocks outperformed with gains of 1.7% and 1.8%, respectively.
With regard to GE, Dow Jones reported that the conglomerate is aiming to keep 2009 profit the same as 2008, even if revenue declines 10-15%. The profit outlook is good news given the current consensus estimate anticipates a 9% decline year-over-year. However, the revenue view doesn't say much about the economic outlook and implies that GE will cost cuts to meet its profit goal.
This was disappointing to the market when thinking of the demand outlook for this global company, sparking a sweeping decline in other multi-national companies in the final minutes of the trading session.
After the close, however, CNBC noted that GE said the comment was not new and shares of GE were trading up in the after hours session.
The Federal Open Market Committee cut the fed funds rate by 50 basis points to 1.00%. This marks the lowest level since June 2004. The discount rate was reduced by 50 basis points to 1.25%. Both actions were unanimously approved. The Fed said the pace of economic activity has "markedly" slowed as consumer expenditures declined, while inflation pressures are expected to moderate due to the drop in commodity prices and weaker economic prospects.
The FOMC believes that over time this action, along with the Fed's other measures, will help promote moderate economic growth. The announcement did not give any surprises, and left the possibility for further rate cuts.
Separately, the Fed established temporary currency swap lines with the central banks of Brazil, Mexico, South Korea and Singapore. The move is meant to improve liquidity and complement the Fed's current swap lines with ten other central banks.
Seven of the ten sectors posted a loss.
Consumer staples stocks trailed the broader market even though Procter & Gamble (PG 61.33, -1.90), Kraft (KFT 28.47, -0.41 ) and Kellogg (K 50.02, -0.66) all reported better-than-expected quarterly earnings results.
The telecom (-3.3%) sector was laggard after Qwest (Q 2.33, -0.27) reported worse than expected quarterly earnings and said it was cutting 1,200 jobs, or 3% of its workforce.
The consumer discretionary sector outperformed on a relative basis with a decline of 0.1%. Casino and gaming stocks soared 11.5% after MGM Mirage (MGM 13.75, +3.42) reported an earnings drop and outlook that was better-than-feared.
Commodities rallied across the board in a rebound trade that was compounded by a 2.7% drop in the dollar. Crude oil prices spiked 9.8% to $68.90 per barrel, getting an added lift after the government's weekly energy report showed a smaller-than-expected increase in crude inventory levels.
As a result, the energy (+2.3%) and material (+2.7%) posted the largest gain this session.
In economic news, September durable goods orders rose 0.8%, better than the expected decline of 1.1%. Excluding transportation, durable goods orders fell 1.1%, which was better than the expected decline of 1.5%. However, nondefensive capital goods excluding aircraft, which is a proxy for business investments, fell 1.4%. DJ30 -74.16 NASDAQ +7.74 NQ100 +0.4% R2K +1.7% SP400 +1.8% SP500 -10.42 NASDAQ Adv/Vol/Dec 1610/2.78 bln/1138 NYSE Adv/Vol/Dec 1954/1.62 bln/1145
3:30 pm : Stocks spike to session highs in a broad-based move. Only telecom (-0.4%) remains in the red.
The energy sector is up 6.8% as crude prices rally 10% to $69.08 per barrel.
Small- and mid-cap stocks are showing notable strength. The Russell 2000 is up 4.8% and the S&P 400 is up 5.1%. By comparison, the S&P 500 is up roughly 2.5%.
Thursday is set to be another busy session with the advance third quarter GDP and initial claims reports being released at 8:30 AM ET. A barrage of companies will report earnings after the close this session and before the open tomorrow, including Visa (V 53.31, +3.37), CVS Caremark (CVS 26.98, -0.84), Exxon Mobil (XOM 79.96, +2.10) and Motorola (MOT 5.79, -0.05).DJ30 +222.18 NASDAQ +49.70 SP500 +23.16 NASDAQ Adv/Vol/Dec 1939/2.14 bln/799 NYSE Adv/Vol/Dec 2394/1.12 bln/696
3:00 pm : As is typically the case, the stock market trades in a volatile fashion following the FOMC policy announcement. The S&P 500 and Dow are posting slight gains while the Nasdaq is outperforming with an advance of more than 1%.
The Nasdaq is benefiting from strength in Apple (AAPL 107.15, +7.24), which is gaining on speculation it will use its $24.5 billion in cash and short-term investments to buy back shares. Meanwhile, for-profit education provider Apollo Group (APOL 66.19, +7.30) is up 13% following its better-than-expected quarterly results, and casino operator Wynn Resorts (WYNN 42.39, +9.51) spikes 29% following better-than-feared earnings from MGM Mirage (MGM 13.80, +3.47).DJ30 +21.58 NASDAQ +17.36 SP500 +2.90 NASDAQ Adv/Vol/Dec 1702/1.88 bln/996 NYSE Adv/Vol/Dec 2042/1.00 bln/1028
2:35 pm : The stock market trades in a volatile fashion following the 50 basis point fed funds rate cut. The Dow has declined more than 100 points from preannouncement levels.
The 1.00% fed funds rate is the lowest target level since between June 25, 2003 and June 30, 2004 when the rate was also 1.0%.
The FOMC said the pace of economic activity appears to have slowed "markedly," noting a decline in consumer spending. Meanwhile, business equipment spending and industrial production have weakened in recent months, and slowing foreign economies may hurt U.S. exports. The Fed also believes the financial market turmoil will pressure spending.
The committee expects inflation to moderate in coming quarters consistent with price stability, citing the decline in commodity prices and weaker prospects for economy activity.DJ30 -57.19 NASDAQ +0.68 SP500 -5.45 NASDAQ Adv/Vol/Dec 1632/1.65 bln/1059 NYSE Adv/Vol/Dec 1949/883 mln/1106
2:20 pm : The FOMC cut the fed funds rate by 50 basis points to 1.00%, which was widely expected. The discount rate was cut 50 basis points to 1.25%. The action was unanimously approved, with the Fed citing increased economic risks and improving inflation expectations.
The stock market has a negative response immediately after the announcement.DJ30 -14.34 NASDAQ +13.97 SP500 -3.00 NASDAQ Adv/Vol/Dec 1615/1.48 bln/1053 NYSE Adv/Vol/Dec 2016/791 mln/1041
2:00 pm : Stocks trade near session highs with the FOMC set to make its policy announcement in about 15 minutes. A 50 basis point cut to 1.50% is widely expected.
The Fed's last move was on Oct. 8 when it made an emergency intermeeting rate cut of 50 basis point. At that time, the Fed said a slowdown in the pace of economic activity and moderating inflation pressures warranted the move, which was unanimously approved by all FOMC voting members.
At the same time, the Bank of Canada, Bank of England, European Central Bank, Sweden central bank and the Swiss National Bank all cut their benchmark rates.DJ30 +91.19 NASDAQ +21.59 SP500 +9.55 NASDAQ Adv/Vol/Dec 1697/1.41 bln/978 NYSE Adv/Vol/Dec 2179/759 mln/876
1:30 pm : The major indices trade with decent gains. The S&P 500 was up 1.3% at is recently reached highs and down 1.4% at its lows.
Bond insurers Ambac (ABK 2.62, +0.35) and MBIA (MBI 8.29, +1.13) spike higher after CNBC reports that NY Insurance Superintendent Eric Dinallo is pushing for bond insurer involvement with the Treasury's Troubled Asset Relief Program.
The financial sector is up 0.2%.DJ30 +77.57 NASDAQ +21.45 SP500 +7.18 NASDAQ Adv/Vol/Dec 1631/1.26 bln/1008 NYSE Adv/Vol/Dec 2024/691 mln/1024
12:55 pm : Reuters reports issues have been resolved regarding a deal between General Motors (GM 6.78, +0.53) and Cerberus, which owns Chrysler. The final form of a GM and Chrysler merger will depend on financing and government support, according to the report. GM CEO Rick Wagoner would lead the merged company.
GM declined to comment on the reports that it is considering approaching Toyota Motor (TM 72.96, +1.98), according to Reuters.
The stock market climbs to its session highs, with a gain of about 0.9%.DJ30 +90.24 NASDAQ +22.22 SP500 +8.48 NASDAQ Adv/Vol/Dec 1649/1.13 bln/963 NYSE Adv/Vol/Dec 2052/625 mln/984
12:30 pm : The major indices trade with a slight gain as strength in energy stocks (+4.5%) offsets weakness in utilities (-1.8%) and healthcare (-1.2%).
General Motors (GM 6.53, +0.28) may ask for help in turning around its business from Toyota Motor (TM 72.33, +1.35), Dow Jones reports, citing a Kyodo News report. Toyota may buy assets, help secure funding and/or expand business partnerships, according to the report. Earlier today GM said sales in the third quarter fell 11.4% year-over-year.DJ30 +46.67 NASDAQ +8.78 SP500 +3.74 NASDAQ Adv/Vol/Dec 1530/997 mln/1064 NYSE Adv/Vol/Dec 1898/561 mln/1099
11:55 am : Stocks are flat, commodities are rallying and the dollar is being clipped ahead of the FOMC policy announcement at 2:15 PM ET.
Fed funds futures fully price in a 50 basis point rate cut, and suggest a 48% chance of a 75 basis point cut. The fed funds target rate is currently at 1.50%, although the effective fed funds rate has been under 1.00% for the last nine sessions.
The dollar is getting hammered, falling 2.6% against a basket of world currencies as the euro gains 3.5% and the pound rallies 4.5%.
The weakness in the dollar is helping to fuel a rally in commodities (+5.9%). Crude oil prices are up 9.0% to $68.38, aided by a lower-than-expected increase in inventory levels.
The gain in crude and other commodities is helping the energy (+5.2%) and material (+2.4%) sectors outperform.
In economic news, September durable goods orders rose 0.8%, better than the expected decline of 1.1%. Excluding transportation, durable goods orders fell 1.1%, which was better than the expected decline of 1.5%. However, nondefensive capital goods excluding aircraft, which is a proxy for business investments, fell 1.4%.
Quarterly earnings results were mostly better-than-expected, although several companies issued downside guidance. Procter & Gamble (PG 61.21, -2.02), Kraft (KFT 29.02, +0.14) and Kellogg (K 50.89, +0.21) all posted better-than-expected results. Corning (GLW 10.52, -0.90), Garmin (GRMN 22.34, +0.92) and Moody's (MCO 21.07, +0.46) all beat, but issued downside outlooks. Office Depot (ODP 2.00, +0.11), MGM Mirage (MGM 13.06, +2.73) and Qwest (Q 2.38, -0.22) reported worse-than-expected earnings. The latter company also said it plans to cut 3% of its workforce, or 1,200 jobs.
Overseas markets rose, aided by the late session rally in U.S. stocks on Tuesday. The Euro Stoxx 600 is up 6.4%, with leadership in banking stocks. Japan's Nikkei rose 7.7%, boosted by continued reports that the Bank of Japan may cut its benchmark lending rate by 25 basis points to 0.25%. DJ30 +35.84 NASDAQ +0.02 SP500 +0.67 NASDAQ Adv/Vol/Dec 1462/867 mln/1085 NYSE Adv/Vol/Dec 1818/489 mln/1160
11:25 am : Stocks continue their choppy trade, with the Dow recovering to a slight gain while the Nasdaq and S&P 500 post modest losses.
The financial sector (-1.9%) is a laggard. Goldman Sachs (GS 92.02, -1.55), which underperformed yesterday, is again under selling pressure.
Health insurer Aetna (AET 24.76, -3.04) is down 11% after the company reported in-line third quarter earnings, but issued downside guidance for fiscal year 2008.
The dollar continues to tumble, now down 2.5%. Meanwhile, commodities rally 4.6%.DJ30 +17.20 NASDAQ -7.08 SP500 -2.18 NASDAQ Adv/Vol/Dec 1365/741 mln/1133 NYSE Adv/Vol/Dec 1743/419 mln/1213
11:00 am : Stocks head back toward session lows. The S&P 500 is now down more than 1% and only the energy sector (+2.3%) remains in the green.
The Dow is outperforming on a relative basis thanks to strength in energy company Chevron (CVX 71.70, +1.69). Crude prices are trading slightly below their preinventory report levels with a gain of 5.7% at $66.30 per barrel.DJ30 -54.48 NASDAQ -18.93 SP500 -10.82 NASDAQ Adv/Vol/Dec 1283/617 mln/1149 NYSE Adv/Vol/Dec 1584/352 mln/1329
10:35 am : The Department of Energy just reported that crude oil inventory levels for the week ended rose 493,000 barrels, which was smaller than the expected increase of 1.6 million. This marks the fifth straight increase. Gasoline inventories fell 1.5 million barrels. Crude prices were up 6.4% to $66.70 per barrel just prior to the release.
Stocks recover to positive territory and then retreat to a slight loss.DJ30 +21.42 NASDAQ -3.84 SP500 -2.82 NASDAQ Adv/Vol/Dec 1489/490 mln/905 NYSE Adv/Vol/Dec 1788/279 mln/1091
10:00 am : The major indices are posting a loss, although the scope of this session's decline is modest when compared to yesterday's massive rally.
Three of the ten sectors are posting a gain. The energy sector (+3.0%) is leading the way as it trades higher in conjunction with a rise in crude oil prices (+5.7% to $66.28).
Consumer discretionary (-2.1%) is a laggard as retailers fall 2.5%. Struggling retailer Office Depot (ODP 1.74, -0.15) reported a 7.1% drop in revenue and an unexpected loss in the third quarter, sending shares 8% lower.
The dollar is taking a beating after rallying the past few weeks. It is down 1.8% against a basket of currencies as the euro (+2.8%) and pound (+3.5%) rally. Conversely, the yen, which has recently soared against world currencies, is down 0.5% against the dollar on continued reports that the Bank of Japan may cut its benchmark lending rate.DJ30 -28.44 NASDAQ -12.91 SP500 -5.94 NASDAQ Adv/Vol/Dec 1222/246 mln/1016 NYSE Adv/Vol/Dec 1517/156 mln/1240
09:40 am : Stocks open on a negative note ahead of FOMC policy announcement at 2:15 PM ET following the surge of nearly 11% on Tuesday.
Fed funds futures fully price in a 50 basis point rate cut, and suggest a 50% chance of a 75 basis point cut. The fed funds target rate is currently at 1.50%.
Earnings have been mostly positive, but like previous days, many companies are giving downside earnings outlooks. Consumer staple stocks Procter & Gamble (PG 62.77, -0.46), Kraft (KFT 29.41, +0.53) and Kellogg (K 51.25, +0.57) all posted better-than-expected results. Corning (GLW 10.01, -1.41), Garmin (GRMN 23.45, +2.02) and Moody's (MCO 20.04, -0.57) all beat, but issued downside outlooks. Office Depot (ODP 1.73, -0.16) and Qwest (Q 2.31, -0.29) reported worse-than-expected earnings.
Commodities are rallying, with notable strength in metals (+6.1%) and energy (+4.8%). Crude prices are up 5.7% to $66.16 per barrel ahead of the government's weekly energy report at 10:35 AM ET.DJ30 -95.98 NASDAQ -26.40 SP500 -12.56
09:16 am : S&P futures vs fair value: -0.50. Nasdaq futures vs fair value: +0.50. A flat start expected. Commodities are rallying as the dollar falls 1.3% -- silver (+10.1%), copper (+7.9%), nickel (+7.8%), RBOB gasoline (+6.2%), crude oil (+6.4%).
09:04 am : S&P futures vs fair value: -3.40. Nasdaq futures vs fair value: -4.00. Futures fall back into the red and now suggest a modestly lower start to the trading day. MGM Mirage (MGM) reported a more than 50% drop in third quarter earnings per share, which was worse than expected. General Motors (GM) said compared to the previous year total sales were down 11.4% in the third quarter, as a 18.9% drop in the U.S and a 12.3% drop in Europe offset some strength in developing countries. More corporations are poised to cut jobs. Telecom company Qwest (Q) will cut 1,200 jobs, or 3% of its workforce. Motorola (MOT) is expected to announce thousands of layoffs as early as Thursday when it reports earnings, The Wall Street Journal reports. Wabco Holdings (WBC), an auto parts company, will reduce its workforce by 1,000 positions, or 16%.
08:30 am : S&P futures vs fair value: +3.50. Nasdaq futures vs fair value: +6.80. S&P 500 futures gain a few points on a better-than-expected durable goods orders report. September durable goods orders rose 0.8%, better than the expected decline of 1.1%. Excluding transportation, durable goods orders fell 1.1%, which was better than the expected decline of 1.5%. Meanwhile, crude prices are rallying, up 5.8% to $66.41 per barrel. Kellogg (K) posted better than expected third quarter earnings and issued in-line guidance for fiscal year 2008.
08:00 am : S&P futures vs fair value: +2.00. Nasdaq futures vs fair value: +8.50. Futures recover early losses and currently point to slightly higher open ahead of the FOMC announcement at 2:15 PM ET. Fed funds futures fully price in a 50 basis point rate cut, and suggest a 42% chance of a 75 basis point cut. In earnings news, Procter & Gamble (PG) earned $1.03 in its fiscal third quarter, a 14% year-over-year increase, which was $0.05 better than expectations. Comcast (CMCSA), Kraft (JFT) and Newmont Mining (NEM) also topped expectations. Corning (GLW) and Garmin (GRMN) and Moody's (MCO) beat for their latest quarter, but issued downside guidance. Office Depot (ODP) and Qwest (Q) reported worse-than-expected earnings. In overseas trading, Japan's Nikkei rose 7.7% on continued reports that the Bank of Japan will cut its benchmark rate by 25 basis points. The Euro Stoxx 600 is up 5.1% with banks leading the way.
06:28 am : S&P futures vs fair value: -12.00. Nasdaq futures vs fair value: -12.50.
06:28 am : Nikkei...8211.90...+590.00...+7.70%. Hang Seng...12702.07...+105.80...+0.80%.
06:28 am : FTSE...4094.94...+168.60...+4.30%. DAX...4727.02...-96.40...-2.00%.
Market Data 
Markets 
AI
