Market Update 081128 http://biz.yahoo.com/mu/update.html 1:30 pm : Despite choppy, listless trading, stocks managed to finish at their session high with a gain of nearly 1%. The session's advance helped contribute to a 12% gain for the week. Stocks still shed 7.5% for November, however.
Volume was light Friday, thanks partly to shortened session. Less than 1 billion shares traded hands on the New York Stock Exchange.
The session's choppy action had stocks trading in mixed for much of the session. A late rally helped eight of the 10 economic sectors finish in positive ground.
Financial stocks (+2.9%) outperformed on a relative basis. Bank of America (BAC 16.25, +0.82) made gains despite having its target price cut by analysts at UBS. Meanwhile, the British government took a majority stake in Royal Bank of Scotland (RBS 17.58, +0.85) after investors snubbed a state-backed capital raising plan for the bank.
Citigroup (C 8.29, +1.24) made impressive gains of its own. According to a report, analysts at Barclays believe Citi will continue to see normalized earnings of more than $20 billion, and also believe the recent government injection will curtail risk. The bank's card unit may carry risk going forward as cardmembers contend with rising unemployment and uncertain economic conditions.
Such headwinds have many retailers expecting a slow holiday shopping season. The holiday shopping season officially kicked off today, Black Friday, as consumers flock to stores in search of bargains. Retailers ended the session 1.6% lower.
Global handset maker Nokia (NOK 14.17, -0.45) said it will no longer sell mobile phones in Japan, except for certain high-end models. According to Nokia's latest quarterly filing, device volume in the Asia-Pacific region contracted quarter-over-quarter, despite continued growth in greater China. Nokia recently stated that it expected global volume to slow amid weaker consumer spending.
Auto makers have also been contending with a challenging environment, but their performance this session was impressive. Auto makers surged 19.0% as a group. Their advance followed reports that General Motors (GM 5.24, +0.43) is studying whether to divest such brands as Saturn, Pontiac, and Saab in order to save money and reduce overlap. Recent strength in the industry is also owed to what is expected to be a forthcoming bailout plan for auto makers.
Industrial stocks (+2.7%) also made strong gains during the session, led by General Electric (GE 17.17, +0.98). GE gained despite word that Korea-based LG Electronics will not acquire GE's the home appliance unit, ending months of speculation.
Energy (-1.5%) was the worst performing economic sector. It dropped as a result of sliding oil prices. Oil was most recently down 4.0% to $50.25 per barrel, or down almost 65% from its record high. The drop in oil prices has many expecting OPEC to order a cut in production during its meeting this weekend.
With stocks continuing to trade in a volatile manner, investors have been seeking out the relative safety of Treasuries, which has pushed the yield of the 10-year Note to historical lows near 2.95%. DJ30 +102.43 NASDAQ +3.47 NQ100 -0.6% R2K +0.9% SP400 +1.0% SP500 +8.56 NASDAQ Adv/Vol/Dec 1703/764 mln/892 NYSE Adv/Vol/Dec 2071/787 mln/966
12:30 pm : General Electric (GE 17.04, +0.85) is currently a leader in the S&P 500. The stock is making its largest advance of the week after reports indicated Korean outfit LG Electronics will not acquire GE's home appliance unit, ending months of speculation.
Large-cap tech names like Microsoft (MSFT 20.21, -0.28), Apple (AAPL 92.31, -2.69), and Research In Motion (RIMM 42.10, -2.60) are all weighing on the Nasdaq, causing it to underperform its peers.
The Nasdaq is the only one of the three headline indices trading with a loss this session, and it has suffered considerably this year. The Nasdaq is down more than 42% year-to-date, while the Dow has shed 34% and the S&P 500 has sunk 39% for the year.DJ30 +42.70 NASDAQ -11.40 SP500 +1.27 NASDAQ Adv/Vol/Dec 1273/541 mln/1278 NYSE Adv/Vol/Dec 1755/436 mln/1248
12:05 pm : Stocks continue struggling to find direction, though the major indices recently improved to some of their best levels of the session. The session's action has been choppy from the start with no earnings or economic data guiding market participants.
Trading is expected to remain volatile heading into the close (U.S. stock market closes early at 1:00 PM ET), and volume is expected to be light as many traders take a long holiday weekend.
Financial stocks have been gaining despite the session's turbulence. The sector is up 1.8%, currently.
Citigroup (C 8.30, +1.25) is surging this session. The stock traded at its lowest point in decades last week, but has registered gains in every session this week. Assessing Citi, Barclays stated that it continues to see normalized earnings of more than $20 billion, and believes the recent government injection curtails risk. However, the main risk going forward is likely in the bank's card unit.
The threat of looming losses at financial institutions has pushed many investors away from the sector. Such was the case with Royal Bank of Scotland (RBS 16.84, +0.11). Since investors barely participated in a state-backed capital raising plan for the bank, the British government had to step in to fund the rest of the offering, according to reports.
Bank of America (BAC 15.93, +0.50) has also been performing well, even though the company had its target price cut by analysts at UBS. In its analysis, UBS noted that tighter credit availability, uncertainty regarding the near-term prospects of the Merrill Lynch (MER 12.79, +0.58) deal, and the risk of additional writedowns.
Reports indicate that General Motors (GM 5.30, +0.49) is studying whether to divest its Saturn, Pontiac, and Saab brands. The move would possibly save money and reduce overlap.
Energy (-2.5%) is down as oil futures slide. Oil is down 4.9% to $51.75 per barrel. Its slide comes ahead of an OPEC meeting scheduled for this weekend, in which many expect OPEC to further cut production.
With uncertainty contuing to surround stocks, interest has been directed toward Treasuries. The 10-year Note is up six ticks and yielding 2.96%, which is near its lowest level in decades.DJ30 +54.96 NASDAQ -9.40 SP500 +3.13 NASDAQ Adv/Vol/Dec 1256/462 mln/1264 NYSE Adv/Vol/Dec 1770/381 mln/1206
11:30 am : Stocks are spiking higher on a sudden buying effort. The move has taken the S&P 500 and the Dow back into positive ground.
However, at its current level, the broad-based S&P 500 has shed 8.4% this month. Meanwhile, the tech-rich Nasdaq is off by 11.7% for November, and the blue-chip Dow is down 6.2% month-to-date.
November's slide, though substantial, is not quite as bad as that of October. The S&P 500 dropped nearly 17% in October, which is one of the worst monthly performances on record.DJ30 +22.07 NASDAQ -11.15 SP500 +0.34 NASDAQ Adv/Vol/Dec 1145/382 mln/1302 NYSE Adv/Vol/Dec 1625/323 mln/1310
11:00 am : Stocks continue to chop along. The S&P 500 has traded with a 0.1% gain, marking its session high, and a 0.7% loss, marking its session low.
The lack of direction this session reflects an apparent lack of leadership. Market participants are trading without the influence of economic data or earnings announcements.
The economic sectors continue to trade in mixed fashion.DJ30 -4.30 NASDAQ -16.68 SP500 -2.98 NASDAQ Adv/Vol/Dec 1070/312 mln/1355 NYSE Adv/Vol/Dec 1501/266 mln/1402
10:30 am : Stocks fight to climb higher after turning markedly lower. The action has been choppy from the start.
Energy (-3.1%) is down more than any other economic sector. Its drop shadows that of oil futures, which are down 3.5% to $52.60 per barrel. Oil prices are under pressure ahead of an OPEC meeting this weekend. Many expect OPEC to further cut oil production as demand wanes amid a slower global economy.
A cut in oil supplies would presumably help provide a floor for oil prices. Oil is already down 45% year-to-date.DJ30 -11.70 NASDAQ -16.70 SP500 -4.86 NASDAQ Adv/Vol/Dec 976/227 mln/1362 NYSE Adv/Vol/Dec 1330/211 mln/1516
10:00 am : The S&P 500 and the Nasdaq extend their losses, while the Dow Jones Industrial Average tries to resist selling efforts.
Citigroup (C 7.64, +0.59) and General Motors (GM 5.30, +0.49) are two of the biggest gainers in the Dow. GM is reportedly studying divesting some of its brands as part of an ongoing strategic review to save money in a challenging operating environment.DJ30 +3.11 NASDAQ -16.62 SP500 -2.99 NASDAQ Adv/Vol/Dec 817/128 mln/1405 NYSE Adv/Vol/Dec 1145/131 mln/1577
09:45 am : The major indices opened the session in negative ground, but improved their position as a result of some buying interest. Selling pressure has picked back up, though, as stocks are trading in mixed fashion.
Half of the economic sectors are showing gains. Financials are sporting the largest advance, up 1.2%.DJ30 +10.44 NASDAQ -9.73 SP500 -1.27 NASDAQ Adv/Dec 908/1219 NYSE Adv/Dec 1270/1367
09:15 am : S&P futures vs fair value: -6.10. Nasdaq futures vs fair value: -16.00. Just a few minutes remain before the opening bell sounds and stock futures continue to suggest a downward start. Volume is expected to be light this session as many traders extend their Thanksgiving holiday into a long weekend.
09:02 am : S&P futures vs fair value: -5.80. Nasdaq futures vs fair value: -12.50. Stock futures continue to lag fair value, suggesting the stock market will open with losses. The CRB Commodity Index is down just 0.1% early on as underlying commodities trade in mixed fashion. Oil futures are down 1.7% to $53.50 per barrel, but gold is up 0.3% to $810.80 per ounce.
08:30 am : S&P futures vs fair value: -6.90. Nasdaq futures vs fair value: -14.80. Stock futures continue to indicate a downward start. BHP Billiton (BHP) offered a dour near-term outlook for the metal commodities market, which has been underscored by waning demand. The outlook came after the company recently dropped its takeover bid for Rio Tinto (RTP). On a related note, Reuters reports that Alcoa (AA) will not look to raise its stake in Rio Tinto. Meanwhile, ArcelorMittal (MT) is planning to cut up to 9,000 jobs, affecting approximately 3% of its global workforce, in a move to save on operating expenses. Nokia (NOK) will stop selling many of its mobile phones in Japan, but will continue to market certain luxury brands there. The announcement comes after the company projected a decline in worldwide sales volume this year.
08:00 am : S&P futures vs fair value: -7.70. Nasdaq futures vs fair value: -11.50. Stock futures indicate a downward start to the trading session. The British government is taking a near 58% stake in Royal Bank of Scotland (RBS); investors hardly participated in a state-backed capital raising plan, leaving the government to fund the rest, according to reports. Chesapeake Energy (CHK), a natural gas producer, made regulatory filings to sell 50 million shares of common stock at $15.82 per share, which is a near 22% discount to the prior session's closing price. In another filining, Chesapeake registered to sell up to $1 billion worth of common stock for general corporate purposes. Bloomberg.com reports that General Motors (GM) is studying whether to divest its Saturn, Pontiac, and Saab brands in order to possibly save money and reduce overlap. GM and its fellow U.S. automakers continue to await official decisions regarding potential government funding for their operations.
06:17 am : S&P futures vs fair value: -0.80. Nasdaq futures vs fair value: +0.50.
06:17 am : Nikkei...8512.27...+138.90...+1.70%. Hang Seng...13888.24...+336.20...+2.50%.
06:17 am : FTSE...4233.75...+7.70...+0.20%. DAX...4635.83...-29.90...-0.60%.
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