Replies to post #10244 on FinancialAdvisor's College Class (FACC)

[FinancialAdvisor]

Stocks slip, jobs data stokes rate fears

Stocks slip, jobs data stokes rate fears
Fri Aug 5, 2005 5:02 PM ET
By Anupama Chandrasekaran

NEW YORK (Reuters) - U.S. stocks fell on Friday after July jobs data exceeded expectations, spurring worries that the Federal Reserve will continue raising interest rates and hurting sectors sensitive to higher borrowing costs such as homebuilders and banks.

Still, Baidu.com (BIDU.O: Quote, Profile, Research), China's largest Web search company, referred to by many as "China's Google," stole the show as its stock price more than quadrupled on Friday, its first day of public trading.

Interest-rate concerns pushed shares of home construction companies lower because higher benchmark lending rates may slow the purchasing and financing of new homes. A Dow Jones index of home construction companies fell 4.5 percent.

The Dow Jones industrial average fell 52.07 points, or 0.49 percent, to end at 10,558.03. The Standard & Poor's 500 index slipped 9.44 points, or 0.76 percent, to finish at 1,226.42. The technology-laced Nasdaq Composite Index dropped 13.41 points, or 0.61 percent, to close at 2,177.91.

"You had the jobs report -- in particular, the wage growth numbers raised inflation concerns and worried investors that interest rates will keep rising," said Chris Burba, a market analyst at Standard & Poor's.

For the week, stocks fell. The blue-chip Dow dropped 0.8 percent, while the S&P 500 declined 0.6 percent and the Nasdaq slipped 0.3 percent.

RATE FEARS

The government reported that job creation was higher than expected last month, with hourly wages rising the most in a year, stoking inflation concerns and deepening worries that the Federal Reserve will keep raising interest rates.

Nonfarm payrolls are considered an important indicator of the economy's health, and the data may partly determine how the Federal Reserve adjusts monetary policy.

The decline in the Dow Jones home construction companies' index came as the yield on the benchmark 10-year U.S. Treasury note rose to 4.4 percent, its highest level in about four months. The note's yield is used as a proxy for lending rates, including mortgage rates.

Among decliners in the Dow Jones index of homebuilders were Toll Brothers (TOL.N: Quote, Profile, Research), down 7.2 percent, or $3.93, at $50.95, and D.R. Norton Inc.(DHI.N: Quote, Profile, Research), down nearly 4 percent, or $1.37, at $33.09.

Shares of mortgage lenders also slipped, with Countrywide Financial Corp. (CFC.N: Quote, Profile, Research) down 0.6 percent, or 20 cents, at $35.01, and Fannie Mae (FNM.N: Quote, Profile, Research), down 1.6 percent, or 91 cents, at $54.96.

BAIDU.COM'S STELLAR DEBUT

The meteoric debut of the Beijing-based Baidu.com was reminiscent of the Internet companies' IPO heyday, when shares of new online and technology companies routinely doubled or tripled on their first day of public trading.

Baidu.com's stock was at $122.54, up 354 percent from its initial offering price of $27 per American depositary share, or ADS. Earlier, the stock hit a session high at $151.21 -- or more than five times its IPO price.

Baidu.com's market entry overshadowed that of world Web search leader Google Inc.'s (GOOG.O: Quote, Profile, Research) IPO last year.

Meanwhile, Microsoft Corp. (MSFT.O: Quote, Profile, Research), a Dow component and one of the Nasdaq's most heavily weighted issues, rose 1.6 percent, or 44 cents, to $27.76. The company on Thursday named Kevin Turner, chief executive of Wal-Mart Stores Inc.'s (WMT.N: Quote, Profile, Research) Sam's Club warehouse stores business, as its new chief operating officer.

OIL CLIMBS, DELPHI TUMBLES

Meanwhile, crude oil for September delivery settled up 93 cents at $62.31 per barrel, a record settlement price, as problems at several refineries stirred concerns about supply.

The contract has risen in six of the last seven sessions. And its closing price on Friday was close to its record high of $62.50 hit on Wednesday on the New York Mercantile Exchange.

Auto parts supplier Delphi Corp. (DPH.N: Quote, Profile, Research) on Friday said it is in talks with former parent General Motors Corp. (GM.N: Quote, Profile, Research) and its main unions about a restructuring of its unprofitable operations. Delphi also said it would draw $1.5 billion from a $1.8 billion revolving credit facility.

Delphi's stock fell more than 14 percent, or 82 cents, to $4.96, making it among the biggest percentage decliners on the New York Stock Exchange.

Volume was fairly active on the NYSE, where about 1.50 billion shares changed hands, above last year's daily average of 1.46 billion, while on Nasdaq, the pace was slower, with 1.51 billion shares traded, below last year's daily average of 1.81 billion.

Decliners outpaced advancers by a ratio of more than 3 to 1 on the NYSE and about 2 to 1 on the Nasdaq.


LINK: http://today.reuters.com/news/NewsArticle.aspx?type=businessNews&storyID=uri:2005-08-05T210214Z_...

[FinancialAdvisor]

***BIDU, I thought it would be fun to pull up the chart of BIDU which we all should know by now had a lightning IPO, craziest IPO since tech & net stocks were going nuts back when you know when...

So let's see what happens to BIDU here at it's support level, could be forming an awkward M-bottom here, or it could be ready to tank, and as a buffer it's ironically on the Nasdaq Regulation SHO list which is what got my attention and curiousity...

So let's see what will happen to BIDU here at $65.00 as of the Thursday, Sept. 29th close...