Market Update 081125 http://biz.yahoo.com/mu/update.html 4:25 pm : Tuesday marked a choppy day of trade as investors digested $800 billion in government efforts to shore up consumer lending and several economic reports. The S&P 500 settled with a 0.7% gain after trading up as much as 2.0% and down as much as 2.0%.
In an effort to reduce the cost and increase the availability of credit for purchasing a house, the Federal Reserve created a program that will purchase up to $600 billion in direct obligations and mortgage-backed securities of housing-related government-sponsored enterprises.
Separately, the Fed created a new facility aimed at reducing the cost and increasing the availability of auto loans, student loans, credit cards, and small business loans. The Federal Reserve will lend up to $200 billion in its Term Asset-Backed Securities Loan Facility to help facilitate the issuance of asset-backed securities.
Stocks related to asset-backed securities and housing benefited from the news. Homebuilders spiked 20% on hopes that lower mortgage rates will spur increased demand. SLM Corp (SLM 9.62, +1.72), which provides education finance, surged 22%.
In economic news, third quarter real GDP was revised to a 0.5% annual rate of decline from a 0.3% rate, which met expectations. Third quarter personal consumption expenditures was revised to -3.7% from -3.1%.
Consumer confidence rose by are large-than-expected amount in November, but remains at an extremely depressed state as the economic turmoil takes a toll on sentiment. November consumer confidence rose 6.1 to 44.9 from October when confidence fell to an all-time low of 38.8, according to the Conference Board. Economists expected confidence of 39.5
The November Richmond Fed Manufacturing Index, a regional manufacturing survey, fell to -38 from -26 in October, which was worse than the expected reading of -27. This represents contraction in manufacturing in the Richmond region.
Home prices continue to show weakness, with prices in 20 major metro areas falling 17.4% in September compared to the previous year, according to S&P/Case-Shiller.
Eight of the ten sectors posted a gain. Materials (+3.2%), financials (+2.5%) and telecom (+2.1%) saw the most buying interest
The tech sector (-1.5%) underperformed, with Hewlett-Packard (HPQ 33.61, -2.09) dropping 6% despite reporting fiscal fourth quarter earnings and fiscal year 2009 guidance that was in-line with the company's preannouncement last week. Cisco (CSCO 15.38, -1.02) was a laggard after announcing that it will shut down most of its U.S. and Canadian operations during the last week in December as part of its cost saving efforts, according to reports. As a result, the tech-heavy Nasdaq posted a loss.
Small- and mid-cap stocks outperformed their large-cap counterparts, with the Russell 2000 advancing 1.5% and the S&P 400 gaining 1.9%.
In commodity trading, oil prices dropped 6.4% to $51.00 per barrel.
Long-term Treasuries rallied, with the 10-year note climbing more than two points to send its yield down to 3.08% and the 30-year bond rose three points to send its yield down to 3.61%.DJ30 +36.08 NASDAQ -7.29 NQ100 -1.0% R2K +1.5% SP400 +1.9% SP500 +5.58 NASDAQ Adv/Vol/Dec 1529/2.46 bln/1195 NYSE Adv/Vol/Dec 2153/1.88 bln/1005
3:30 pm : The major indices trade in mixed fashion. Strength in telecom (+2.5%) and materials (+2.6%) is helping to offset weakness in tech (-1.3%) and consumer staples (-1.2%).
Tomorrow before the open investors will digest quarterly earnings reports from Deere (DE 32.96, -0.22) and Tiffany & Co (TIF 19.43, -1.62). There will be six economic reports released, including the weekly initial jobless claims, personal income and spending, Chicago PMI and new home sales. In addition, the weekly energy inventory report will be released.DJ30 +12.74 NASDAQ -13.54 SP500 +2.86 NASDAQ Adv/Vol/Dec 1219/1.86 bln/1484 NYSE Adv/Vol/Dec 1806/1.18 bln/1337
3:00 pm : Stocks make a sudden, sharp spike into positive territory, lifting the major indices near their best level of the afternoon. The move does not appear to be motivated by any particular news item.
Oil remains under pressure as crude futures are down 6.1% to $51.20 per barrel. The drop in oil prices is weighing on oil and gas equipment and services companies (-2.7%).
Schlumberger (SLB 45.51, -0.88) is a key laggard in the group. Shares of SLB are nearly 17% above their 52-week low, which was reached just last week. The stock is nearly 60% off its 52-week high. The stock has slumped as investors remain wary of the impact falling crude prices may have on demand for Schlumberger's services.DJ30 +7.88 NASDAQ -17.40 SP500 +2.22 NASDAQ Adv/Vol/Dec 1179/1.65 bln/1527 NYSE Adv/Vol/Dec 1785/1.06 bln/1336
2:30 pm : The major indices fall to session lows and then recover some ground. Only telecom (+0.4%) is in the green.
Financials (-1.7%) fall to intraday lows after the Federal Reserve said that between Oct. 16 and Oct. 23 seven of the 12 Fed districts did not want to change the discount rate on October 29, when the rate was cut by 50 basis points to 1.25%, according to Bloomberg. Sentiment changed toward the final days of the month, however, as the 50 basis point cut was unanimously approved. The discount rate is interest rate charged to commercial banks and other depository institutions on loans received from the Fed.
The financial sector was up as much as 4.3% in early trade.DJ30 -112.71 NASDAQ -36.89 SP500 -12.40 NASDAQ Adv/Vol/Dec 987/1.51 bln/1685 NYSE Adv/Vol/Dec 1505/972 mln/1643
2:00 pm : The S&P 500 recovers to the unchanged mark and then runs into some resistance. The 10-year note continues to advance, now up more than two points to send its yield down to 3.08%.DJ30 -73.84 NASDAQ -29.80 SP500 -7.10 NASDAQ Adv/Vol/Dec 1146/1.36 bln/1508 NYSE Adv/Vol/Dec 1685/885 mln/1419
1:30 pm : The major indices pare some losses, although the tech sector (-2.5%) remains under pressure. The tech sector is down 47% this year, making it the third worst performing sector.
The main laggards are Microsoft (MSFT 19.90, -0.79), Hewlett-Packard (HPQ 33.01, -2.69) and Cisco (CSCO 15.47, -0.93). The latter company said it would shut down most of its U.S. and Canadian businesses for five days as part of its previously announced $1 billion cost saving effort, according to Reuters.DJ30 -55.28 NASDAQ -23.69 SP500 -3.35 NASDAQ Adv/Vol/Dec 1140/1.25 bln/1503 NYSE Adv/Vol/Dec 1672/819 mln/1441
1:00 pm : The major indices fall to session lows in broad-based selling interest. Only utilities (+0.2%) and telecom (+0.6%) remain in the green.
There does not appear to be a specific catalyst for the selling interest.
At the same time, oil prices approach session lows with a decline of 6.3% at $51.08 per barrel.DJ30 -106.02 NASDAQ -31.08 SP500 -9.32 NASDAQ Adv/Vol/Dec 1046/1.13 bln/1587 NYSE Adv/Vol/Dec 1493/744 mln/1600
12:30 pm : Stocks are back on the defensive with six of the ten sectors posting a loss.
President-elect Obama said an economic stimulus should both stimulate the economy in the near-term and promote long-term economic growth. Obama also plans to reform the budget. He is scheduled to give another press conference tomorrow.DJ30 -65.00 NASDAQ -26.34 SP500 -6.22 NASDAQ Adv/Vol/Dec 1222/1.01 bln/1459 NYSE Adv/Vol/Dec 1660/676 mln/1415
12:00 pm :
[BRIEFING.COM] The stock market has traded in choppy fashion as investors digest several economic reports and news that the government is taking steps to shore up consumer lending.
At midday, the stock market is posting a modest gain as strength in financials (+1.5%) helps to offset weakness in tech (-1.2%).
The Federal Reserve created a program that will purchase direct obligations of housing-related government-sponsored enterprises such as Fannie Mae (FNM 0.51, +0.17) and Freddie Mac (FRE 0.60, +0.15). The Fed is taking this action to reduce the cost and increase the availability of credit to purchase houses. The Fed will purchase up to $100 billion in direct GSE obligations and up to $500 billion in mortgage-backed securities.
In addition, the Fed created a Term Asset-Backed Securities Loan Facility so market participants can meet the credit needs of households and small businesses by supporting asset-backed securities collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration. The New York Fed will extend $200 billion in loans for the consumer credit facility, while the Treasury will extend $20 billion in TARP funds.
In economic news, consumer confidence rose in November, but remains at extremely depressed states as the economic turmoil takes a toll on sentiment. November consumer confidence rose 6.1 to 44.9 from October when confidence fell to an all-time low of 38.8, according to the Conference Board. Economists expected confidence of 39.5.
The preliminary GDP report revised the contraction in the economy during the third quarter to 0.5% from 0.3%, which matched expectations. Third quarter consumption was revised to -3.7% from -3.1%, which was a larger decline than the expected reading of -3.2%.
The November Richmond Fed Manufacturing Index, a regional manufacturing survey, fell to -38 from -26 in October, which was worse than the expected reading of -27. This represents contraction in manufacturing in the Richmond region.
Home prices continue to show weakness, with prices in 20 major metro areas falling 17.4% in September compared to the previous year, according to S&P/Case-Shiller.
In corporate news, BHP Billiton (BHP 38.58, +5.16) withdrew its $68 billion hostile takeover bid for Rio Tinto (RTP 99.07, -46.92) due to global events and fall in commodity prices and deepening global crisis, according to the Wall Street Journal.
Hewlett-Packard (HPQ 34.77, -0.93) is a laggard despite posting fiscal fourth quarter results and fiscal year 2009 earnings guidance that met its preannouncement made earlier this month.
Oil prices are under pressure, dropping 5.9% to $51.30 per barrel. Commodities as a whole are down 1.8%.
President-elect Obama is currently holding a news conference on his economic plans. DJ30 +24.61 NASDAQ -13.18 SP500 +3.04 NASDAQ Adv/Vol/Dec 1263/905 mln/1308 NYSE Adv/Vol/Dec 1864/612 mln/1183
11:30 am : The S&P 500 trades near the unchanged mark while the Nasdaq posts a loss of more than 1%. President-elect Obama is expected to lay out more of his economic strategy in a few minutes.
NYSE market breadth is slightly positive with advancers outpacing decliners by 6-to-5, while Nasdaq breadth is slightly negative with decliners outpacing advancers by 5-to-4.DJ30 +10.03 NASDAQ -19.74 SP500 +0.452 NASDAQ Adv/Vol/Dec 1118/762 mln/1420 NYSE Adv/Vol/Dec 1637/529 mln/1376
10:55 am : The September House Price Index, released about 15 minutes ago by the Federal Housing Finance Agency, fell 1.3% month-over-month, which was more than the 0.7% decline that economists forecast. This marks the 17th straight month of price declines.
The major indices fall into negative territory in a broad-based pullback. Five of the ten sectors are now posting a loss, with notable weakness in tech (-1.9%) and financials (-0.7%).
The energy sector (-0.7%) is also a laggard as crude prices drop 5.8% to $51.36 per barrel.DJ30 -10.43 NASDAQ -25.53 SP500 -2.96 NASDAQ Adv/Vol/Dec 1130/603 mln/1349 NYSE Adv/Vol/Dec 1576/425 mln/1405
10:35 am : The S&P 500 and Dow sport solid gains of more than 1%, while the Nasdaq underperforms with a modest loss due to weakness in tech (-0.6%).
Within the tech sector, 40 of the 73 components are posting a loss. Hewlett-Packard (HPQ 34.77, -0.93) is a laggard despite posting fiscal fourth quarter results and fiscal year 2009 earnings guidance that met its preannouncement made earlier this month. Google (GOOG 276.48, +19.04), up 7.40%, is helping to limit the tech sector's loss after the Wall Street Journal reported the Internet giant is planning to significantly reduce the number of contract workers it uses, but does not have plans to lay off employees.
Treasury Secretary Paulson said issuance of asset backed securities dropped sharply in 2008 and essentially came to a halt in October, resulting in millions of Americans being unable to find affordable financing as asset backed securities encompass credit cards, auto loans and student loans, among other items. As a result, the Treasury is providing $20 billion in credit protection to the Fed's $200 billion Term Asset Backed Securities Loan Facility. The facility aims to increase liquidity in asset backed securities, which will in turn decrease the cost and increase the availibility of credit card, auto, and student loans.
Treasuries with longer maturities are posting gains this session. The 10-year note is up more than a point to send its yield down to 3.16%. The 30-year bond is up nearly three points to send its yield down to 3.64%.DJ30 +101.07 NASDAQ -10.26 SP500 +8.64 NASDAQ Adv/Vol/Dec 1319/474 mln/1089 NYSE Adv/Vol/Dec 2019/346 mln/935
10:05 am : Stocks slip from opening levels and then recover some ground as two economic reports are released. The Nasdaq is posting a loss as large-cap tech (-0.4%) underperforms.
Just hitting the wires, consumer confidence rose in November, but remains at extremely depressed states as the economic turmoil takes a toll on sentiment.
Specifically, November consumer confidence rose 6.1 to 44.9 from October when confidence fell to an all-time low of 38.8, according to the Conference Board. Economists expected confidence of 39.5.
The November Richmond Fed Manufacturing Index, a regional manufacturing survey, fell to -38 from -26 in October, which was worse than the expected reading of -27. This represents contraction in manufacturing in the Richmond region.
Meanwhile, Treasury Secretary Paulson will soon speak about the government's latest plans to shore up the financial system.DJ30 +105.93 NASDAQ -5.92 SP500 +10.27 NASDAQ Adv/Vol/Dec 1218/253 mln/1052 NYSE Adv/Vol/Dec 1749/207 mln/1073
09:35 am : The stock market gets off to a strong start, benefiting from efforts by the government to spur consumer lending.
The Federal Reserve created a program that will purchase direct obligations of housing-related government-sponsored enterprises, such as Fannie Mae (FNM 0.50, +0.16) and Freddie Mac (FRE 0.63, +0.18). The Fed is taking this action to reduce the cost and increase the availability of credit to purchase houses. The Fed will purchase up to $100 billion in direct GSE obligations and up to $500 billion in mortgage-backed securities.
In addition, the Fed created a Term Asset-Backed Securities Loan Facility so market participants can meet the credit needs of households and small businesses by supporting asset-backed securities collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration. The New York Fed will extend $200 billion in loans for the consumer credit facility, while the Treasury will extend $20 billion in TARP funds.DJ30 +105.69 NASDAQ +4.70 SP500 +13.48
09:15 am : S&P futures vs fair value: +19.20. Nasdaq futures vs fair value: +9.80.
09:01 am : S&P futures vs fair value: +18.10. Nasdaq futures vs fair value: +11.80. Futures climb to session highs and then hold their advance as a home price report is released. The September S&P/CaseShiller 20 city home price index fell 17.4% year-over-year, which was a larger decline than the expected reading of -16.9%.
08:30 am : S&P futures vs fair value: +13.00. Nasdaq futures vs fair value: +5.30. Futures suggest a higher start to the trading day as investors remain encouraged by the government's latest programs to prop up consumer lending. Preliminary third quarter GDP was revised to -0.5% from the advance third quarter reading of -0.3%. The revision matched expectations. Preliminary third quarter consumption was revised to -3.7% from -3.1%, a larger decline than the the expected reading of -3.2%.
08:25 am : S&P futures vs fair value: +8.00. Nasdaq futures vs fair value: +2.50. Futures rebound on word of two new government initiatives to support lending to consumers. The Federal Reserve created a program to purchase direct obligations of housing-related government-sponsored enterprises, such as Fannie Mae (FNM) and Freddie Mac (FRE). The Fed is taking this action to reduce the cost and increase the availability of credit to purchase houses. In addition, the Fed created a Term Asset-Backed Securities Loan Facility so market participants can meet the credit needs of households and small businesses by supporting asset-backed securities collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration. The New York fed will extend $200 billion in loans for the consumer credit facility, while the Treasury will extend $20 billion in TARP funds.
08:00 am : S&P futures vs fair value: -4.80. Nasdaq futures vs fair value: -13.30. Futures suggest a modestly lower start to the session. The Treasury is going to unveil a new facility to support consumer loans at 10:00 AM ET, according to reports. President-elect Obama is set to make another economic announcement today. In earnings news, Hewlett-Packard reported fiscal fourth quarter earnings that met its preannouncement. Homebuilder Dr Horton (DHI) posted its fifth straight quarterly loss on lower-than-expected revenue. Hormel Foods (HRL) reported better-than-expected fourth quarter results, but issued downside guidance for fiscal year 2009. Starbucks (SBUX) said in a regulatory filing that it expects negative same-store sales in 2009. BHP Billiton (BHP) withdrew its $68 billion hostile takeover bid for Rio Tinto (RTP) due to global events and fall in commodity prices and deepening global crisis, according to the Wall Street Journal.
06:37 am : S&P futures vs fair value: +0.40. Nasdaq futures vs fair value: -8.00.
06:36 am : Nikkei...8323.93...+413.10...+5.20%. Hang Seng...12878.93...+420.70...+3.40%.
06:36 am : FTSE...4178.17...+25.20...+0.60%. DAX...4527.11...-27.20...-0.60%.
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