Market Update 081203 http://biz.yahoo.com/mu/update.html 4:15 pm : Stocks managed to post a strong gain after a solid e-commerce sales report and encouraging news out of the financial sector helped offset dour private employment and services industry economic reports.
Trade was volatile, as has been the case of late. Stocks quickly recovered from opening losses, only to fall back into the red shortly before 2:00 PM ET. Then, a surge in buying interest sent the S&P 500 to a 2.6% gain to settle at session highs.
The Fed's Beige Book, a collection of anecdotal economic information, painted a bleak economic picture, which was widely expected. The small portion of good news -- the Philadelphia Fed said it saw loan volumes rise and the Dallas Fed said the government's capital investments have helped larger institutions feel less constrained in their lending -- helped the financial sector (+5.6%) lift the market out of the red and lead a late-session rally.
Homebuilders (+11.0%) exhibited strength on signs that the government's plan to utilize up to $500 billion to support the mortgage market is having a positive effect. The 30-year fixed rate mortgage dropped to 5.65% yesterday, according Bankrate.com, and the Mortgage Bankers Association said that mortgage applications rose by a record 112% last week.
Retailers (+6.3%) outperformed throughout the session. Shares of Amazon.com (AMZN 45.20, +4.01) spiked after comScore said e-commerce spending jumped 15% on Cyber Monday to $846 million, which marks the second highest online spending day on record. The four-day period from Black Friday to Cyber Monday saw e-commerce spending increase 13%. Since the start of November, $12.0 billion has been spent online, which is a 2% year-over-year decline, according to comScore.
In economic news, ADP reported that private nonfarm employment decreased 250,000 in November, which follows a downwardly revised reading of -179,000 in October. This was worse than the expected decline of 205,000. The ADP report has had a spotty record compared to the government's employment report. The government data, set for release on Friday, include both nonfarm private and public employment and is expected to show a decrease of 325,000 jobs.
November ISM services, a national nonmanufacturing survey, dropped to 37.3 from October's reading of 44.4. This marks the lowest level since the report started in 1997 and is well below the expected reading of 42.0. A number below 50 indicates contraction in the services industry.
In commodity trading, crude oil futures fell 0.2% to $46.86 per barrel despite the government's weekly energy report showing unexpected declines in both crude and gasoline stockpiles.
The S&P 500 has now gained in seven of the last eight sessions and is up 17.50% from its multi-year low reached on Nov. 21.DJ30 +172.60 NASDAQ +42.58 NQ100 +3.2% R2K +2.7% SP400 +2.5% SP500 +21.93 NASDAQ Dec/Adv/Vol 1075/1669/2.28 bln NYSE Dec/Adv/Vol 1048/2084/1.55 bln
3:30 pm : The stock market continues to trade in a choppy manner. It is posting a gain after finding support at the unchanged mark.
In international news, the Reserve Bank of New Zealand cut its benchmark lending rate by 150 basis points to 5.00%, as expected.DJ30 +38.08 NASDAQ +16.71 SP500 +5.01 NASDAQ Dec/Adv/Vol 1275/1436/1.82 bln NYSE Dec/Adv/Vol 1515/1592/1.13 bln
3:00 pm : Trade remains volatile as stocks recover more lost ground and then run into some resistance.
Commodities are down 1.0%. Oil is down 0.2% to $46.86 per barrel and gold is down 1.6% to $768.70 per ounce. The dollar is up 0.3%.DJ30 +30.99 NASDAQ +17.48 SP500 +4.33 NASDAQ Dec/Adv/Vol 1209/1485/1.62 bln NYSE Dec/Adv/Vol 1361/1739/1.00 bln
2:30 pm : Stocks are back in positive ground after falling into the red on sudden selling pressure. Wide swings have become the norm during the past few months as volatility has escalated amid ongoing investor uncertainty.
The Fed's Beige Book, a collection of anecdotal data from the 12 Federal Reserve districts, indicated economic activity weakened across all districts. Generally, districts reported decreased retail sales and weak housing markets characterized by reduced selling prices and low sales activity. Credit standards rose across the nation as loan delinquencies and defaults increased.
The districts also reported declines in energy, fuel, materials, and food product costs. As a corollary, energy (-1.3%) and materials (-1.5%) are the only two sectors still trading in the red.DJ30 +19.44 NASDAQ +6.78 SP500 +1.37 NASDAQ Dec/Adv/Vol 1342/1329/1.46 bln NYSE Dec/Adv/Vol 1409/1676/900 mln
2:05 pm : The stock market drops due to broad-based selling. There does not appear to be a specific selling catalyst. Richmond Fed President Lacker said that the risk of deflation is minor, which may explain the recovery in Treasuries. Only the telecom sector (+0.5%) remains in the green.
The stock market then has a slightly positive reaction as the Fed releases its collection of anecdotal economic information. According to the Fed's Beige Book, the economy weakened across all districts since the middle of October. The job market is weakening, according to the report.DJ30 -94.14 NASDAQ -9.94 SP500 -9.47 NASDAQ Dec/Adv/Vol 1600/1045/1.31 bln NYSE Dec/Adv/Vol 1917/1142/806 mln
1:30 pm : The S&P 500 falls into negative territory as all ten economic sectors go on the decline. The Nasdaq is holding on to a slight gain.
At the same time, the 10-year Treasury note rises out of negative territory to near the unchanged mark.
In about 30 minutes, the Fed will release its collection of anecdotal economic information known as the Beige Book.DJ30 -21.98 NASDAQ +3.87 SP500 -2.09 NASDAQ Dec/Adv/Vol 1219/1396/1.16 bln NYSE Dec/Adv/Vol 1585/1464/716 mln
1:00 pm : The stock market trades with a decent gain in a relatively tight range.
Market breadth leans positive. Advancers outpace decliners by about 4-to-3 on both the NYSE and Nasdaq.DJ30 +64.24 NASDAQ 19.94 SP500 +7.75 NASDAQ Dec/Adv/Vol 1113/1469/1.07 bln NYSE Dec/Adv/Vol 1318/1697/653 mln
12:30 pm : Stocks give up some gains, but remain in the green. The United Auto Workers union president said the union is going to defer General Motors' (GM 4.90, +0.05) 2010 VEBA health care trust payment, according to Dow Jones.
Homebuilders (+10.6%) are showing notable strength. The group is benefiting from the 30-year fixed rate mortgage dropping to 5.65%, according Bankrate.com, and news from the Mortgage Bankers Association that mortgage applications rose by a record 112% last week. The improvement comes after the government said it will utilize up to $500 billion to support the mortgage market.DJ30 +55.76 NASDAQ +18.09 SP500 +6.70 NASDAQ Dec/Adv/Vol 1104/1469/972 mln NYSE Dec/Adv/Vol 1266/1729/596 mln
12:00 pm : Stocks are posting solid gains at midday after recovering from early losses. A bullish e-commerce spending report helped investors shrug off dour private employment and services industry data.
Stocks opened 2.5% lower after ADP reported that private nonfarm employment decreased 250,000 in November, which follows a downwardly revised decrease of 179,000 in October. This was worse than the expected decline of 205,000. The ADP report has had a spotty record compared to the government's employment report. The government data, set for release on Friday, includes both nonfarm private and public employment and is expected to show a decrease of 325,000 jobs.
November ISM services, a national nonmanufacturing survey, dropped to 37.3 from October's reading of 44.4. This marks the lowest level since the report started in 1997 and is well below the expected reading of 42.0. A number below 50 indicates contraction in the services industry.
Retailers (+3.8%) are providing leadership and helped lead a turnaround in the stock market. Shares of Amazon.com (AMZN 44.98, +3.79) spiked after comScore said e-commerce spending jumped 15% on Cyber Monday to $846 million, which marks the second highest online spending day on record. The four-day period from Black Friday to Cyber Monday saw e-commerce spending increase 13%. Since the start of November, $12.0 billion has been spent online, which is a 2% year-over-year decline, according to comScore.
Of the eight sectors posting a gain, consumer discretionary (+2.4%), telecom (+3.0%) and financials (+2.1%) are showing the most strength.
The energy and material sectors are the main laggards. Schlumberger (SLB 41.65, -2.27) is weighing on energy after warning its 2008 profit will below Wall Street's expectations. Freeport-McMoRan Copper & Gold (FCX 17.71, -4.11) is a drag on materials after reducing its copper sales and production estimates for 2009 and 2010 and suspending its common stock dividend.
Crude prices (+1.3%, $47.61) have traded in volatile manner. The government's weekly energy inventory data showed an unexpected decrease in both crude oil and gasoline stockpiles.DJ30 +109.28 NASDAQ +28.06 SP500 +12.91 NASDAQ Dec/Adv/Vol 922/1590/841 mln NYSE Dec/Adv/Vol 1079/1896/512 mln
11:30 am : Crude oil (-0.3%, $46.86) gives up its gains, but stocks continue to climb higher. CNBC reports that the SEC is adopting stricter rules for credit rating agencies.
Within the S&P 500, 365 stocks are posting a gain. AT&T (T 28.98, +0.94) and Coca-Cola (KO 45.48, +1.55) are providing leadership. The main laggards are Schlumberger (SLB 41.25, -2.67) and Chevron (CVX 74.60, -0.94).DJ30 +103.55 NASDAQ +31.00 SP500 +12.68 NASDAQ Dec/Adv/Vol 860/1628/717 mln NYSE Dec/Adv/Vol 1033/1896/432 mln
11:00 am : The S&P 500 and Dow join the Nasdaq in positive ground. Eight of the ten sectors are posting a gain, led by financials (+2.5%) and consumer discretionary (+2.1%). The energy (-1.0%) and material sectors (-1.1%) are the main laggards, but have pared a large portion of their losses.
Crude prices rebound into positive territory with a gain of 1.9% at $47.76 per barrel. The inventory data marked the first decline in nine weeks. DJ30 +36.56 NASDAQ +21.84 SP500 +5.79 NASDAQ Dec/Adv/Vol 993/1420/537 mln NYSE Dec/Adv/Vol 1247/1607/332 mln
10:35 am : Stocks rebound to session highs, with the Nasdaq touching positive ground. Stocks are benefiting from stronger-than-expected demand in crude oil and strength in retailers. The S&P 500 was down as much as 2.5% this session, compared to its current decline of 0.2%.
Just hitting the wires, crude inventories for the week ended Nov. 28 decreased by 456,000 barrels, compared to the expected increase of 1.0 million. Gasoline inventories fell 1.5 million barrels. Crude was trading down 1.0% at $46.45 per barrel just prior to the release.
Retailers (+3.2%) get a boost as shares of Amazon.com (AMZN 44.60, +3.41) spike following a positive e-commerce report. According to comScore, e-commerce spending jumped 15% on Cyber Monday to $846 million, which marks the second highest online spending day on record. The four-day period from Black Friday to Cyber Monday saw e-commerce spending increase 13%. Since the start of November, $12.0 billion has been spent online, which is a 2% year-over-year decline, according to comScore.
Consumer discretionary is the best performing sector with a gain of 0.8%.
Separately, Constellation Energy (CEG 28.11, +2.96) is catching a bid after it received an unsolicited proposal from Electricite de France to buy 50% of Constellation's nuclear generation and operation business for $4.5 billion. Constellation said its board of directors is reviewing the offer. After running into liquidity problems during the financial market turmoil a few months ago, Constellation agreed to be bought by Berkshire Hathaway's (BRK.A 100799, -700) MidAmerican Energy Holdings Co. for $4.7 billion, or $26.50 per share in cash -- 75% less than what CEG traded in December 2007. Shareholders are scheduled to vote on the MidAmerican merger on Dec. 23, 2008.DJ30 -30.18 NASDAQ +5.50 SP500 -1.32 NASDAQ Dec/Adv/Vol 1353/979/382 mln NYSE Dec/Adv/Vol 1900/896/239 mln
10:05 am : Stocks regain some ground and then are able to resist selling despite a report that indicates the services industry contracted by a larger-than-expected amount in November.
Just hitting the wires, November ISM services, a national nonmanufacturing survey, dropped to 37.3 from October's reading of 44.4. This marks the lowest level since the report started in 1997 and is well below the expected reading of 42.0. A number below 50 indicates contraction in the services industry. The price index plummeted to 36.6 from 53.4, which like CPI and PPI, indicates easing prices.
Material stocks (-4.6%) are underperforming. Freeport-McMoRan Copper & Gold (FCX 17.46, -4.36) announced it is reducing its copper production and sales estimates by 5% in 2009 to 200 million pounds and 11% in 2010 to 500 million pounds. The company also suspended its common stock dividend, which yielded 9.2% at yesterday's closing price. The move came following the sharp 50% year-to-date drop in copper prices.
On a similar note, Alpha Natural Resources (ANR 15.89, -3.05) cut its fourth quarter estimates for coal shipments and said the 2009 outlook is uncertain due to the deterioration in steel markets (which use coal).DJ30 -132.45 NASDAQ -20.87 SP500 -15.76 NASDAQ Dec/Adv/Vol 1627/632/210 mln NYSE Dec/Adv/Vol 2266/449/148 mln
09:35 am : The stock market tumbles on the open, with a larger-than-expected drop in private employment weighing on sentiment.
According to ADP, U.S. nonfarm employment decreased 250,000 in November, which follows a downwardly revised decrease of 179,000 in October. This was worse than the expected decrease of 205,000. The ADP report has had a spotty record compared to the government's employment report. The government data, set for release on Friday, includes both nonfarm private and public employment and is expected to show a decrease of 325,000 jobs.
Research In Motion (RIMM 35.48, -1.84), the maker of BlackBerry devices, lowered its third quarter earnings and revenue outlook. RIM cited a stronger dollar and lower-than-expected unit shipments of existing products.DJ30 -184.30 NASDAQ -33.89 SP500 -19.28
09:17 am : S&P futures vs fair value: -21.40. Nasdaq futures vs fair value: -33.30.
08:53 am : S&P futures vs fair value: -16.10. Nasdaq futures vs fair value: -24.00.
08:32 am : S&P futures vs fair value: -16.60. Nasdaq futures vs fair value: -27.00. Futures fall to session lows following the ADP report that showed a larger-than-expected loss in nonfarm private employment. Just reported, third quarter nonfarm productivity was revised higher to an increase of 1.3% from 1.1%. Economists expected a reading of 0.9%. Unit labor costs were revised downward to 2.8% from 3.6%.
08:15 am : S&P futures vs fair value: -14.20. Nasdaq futures vs fair value: -25.50. Futures drop a few points as a private employment report is released. According to the ADP employment report, November nonfarm private employment fell 250,000, which was worse than the expected drop of 205,000. October was revised lower to -179,000 from -157,000. The ADP report has been somewhat spotty compared to the government's employment report, due for release Friday.
08:01 am : S&P futures vs fair value: -11.60. Nasdaq futures vs fair value: -22.80. Stock futures indicate a lower open, with the Nasdaq 100 recently falling to session lows and set to underperform after Research In Motion (RIMM) cut its third quarter revenue and earnings outlook. RIM cited the weaker dollar and lower than estimated unit shipments of existing products. The ADP private nonfarm employment report is due in about 15 minutes. Other releases today include the revised third quarter productivity (8:30 AM ET), ISM Services (10:00 AM ET), weekly energy inventory data (10:35 AM ET) and the the Beige Book (2:00 PM ET).
06:36 am : S&P futures vs fair value: -14.40. Nasdaq futures vs fair value: -16.80.
06:36 am : Nikkei...8004.10...+140.40...+1.80%. Hang Seng...13588.66...+182.80...+1.40%.
06:36 am : FTSE...4091.22...-31.60...-0.80%. DAX...4451.39...-80.40...-1.80%.
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