Among the companies whose shares are expected to see active trade in Thursday's session are Google, MBIA, AstraZeneca, Proctor & Gamble, and Electronic Arts.
Google Inc. (GOOG:548.27, -2.25, -0.4%) is forecast to report fourth-quarter earnings of $4.44 a share, according to analysts polled by Thomson Financial.
MBIA Inc. (MBI) is projected to post a loss of $2.97 a share in the fourth quarter.
AstraZeneca Plc (AZN) is expected to report fourth-quarter earnings of 95 cents an ADR.
Procter & Gamble Co. (PG) is estimated to report fiscal second-quarter earnings of 97 cents a share.
Electronic Arts Inc. (ERTS) is likely to post earnings of 90 cents a share in the fiscal third quarter.
Mattel Inc. (MAT) is forecast to post fourth-quarter earnings of 73 cents a share.
Goodrich Corp. (GR) is estimated to post earnings of 91 cents a share in the fourth quarter.
Bristol-Myers Squibb Co. (BMY) is projected to report earnings of 34 cents a share in the fourth quarter.
MasterCard Inc. (MA) is expected to report fourth-quarter earnings of 72 cents a share.
Burger King (BKC) is likely to post fiscal second-quarter earnings of 32 cents a share.
Colgate-Palmolive (CL) is expected to report earnings of 89 cents a share in the fourth quarter.
Monster Worldwide Inc. (MNST) is estimated to post earnings of 38 cents a share in the fourth quarter.
CVS Caremark Corp. (CVS) is forecast to post earnings of 55 cents in the fourth quarter.
Raytheon Co. (RTN) is estimated to post earnings of 92 cents a share in the fourth quarter.
NewYork Times Co. (NYT:16.65, +0.59, +3.7%) is projected to report fourth-quarter earnings of 48 cents a share.
Wyeth (WYE: 39.70, -1.34, -3.3%) is likely to report fourth-quarter earnings of 79 cents a share.
Aflac Inc. (AFL: 60.82, -1.41, -2.3%) is forecast to post earnings of 80 cents a share in the fourth quarter.
Anheuser-Busch Co. (BUD:47.26, -0.03, -0.1%) is expected to post fourth-quarter earnings of 32 cents a share.
Nasdaq Stock Market Inc. (NDAQ:44.65, -0.84, -1.8%) is projected to post earnings of 47 cents a share in the fourth quarter.
McKesson Corp. (MCK:63.26, +1.01, +1.6%) is forecast to post fiscal third-quarter earnings of 80 cents a share.
Lear Corp. (LEA:27.05, -0.28, -1.0%) is likely to report earnings of 66 cents a share in the fourth quarter.
L-3 Communications Holdings (LLL:107.85, -0.39, -0.4%) is expected to report fourth-quarter earnings of $1.61 a share.
Elizabeth Arden Inc. (RDEN) is projected to report fiscal second-quarter earnings of $1.15 a share.
Harsco Corp. (HSC) is expected to post fourth-quarter profits of 70 cents a share.
Newell Rubbermaid Inc. (NWL) is likely to post earnings of 45 cents a share in the fourth quarter.
Hologic Inc. (HOLX) is projected to post fiscal first-quarter earnings of 48 cents a share.
Celgene Corp. (CELG) is estimated to post earnings of 31 cents a share in the fourth quarter.
Nova Chemicals Corp. (NCX) is expected to report fourth-quarter earnings of $1.01 a share.
E.W. Scripps Co. (SSP) is projected to post earnings of 70 cents a share in the fourth quarter.
RF Micro Devices Inc. (RFMD) is likely to report earnings of 7 cents a share in the fiscal third quarter.
Safeco Corp. (SAF) is estimated to post earnings of $1.44 a share in the fourth quarter.
VeriSign Inc. (VRSN) is expected to post fourth-quarter earnings of 29 cents a share.
Callaway Golf Co. (ELY) is forecast to report a loss of 19 cents a share in the fourth quarter.
Western Union Co. (WU) is likely to post earnings of 31 cents a share in the fourth quarter.
C.R. Bard Inc. (BCR:95.60, +2.75, +3.0%) is expected to report earnings of $1 a share in the fourth quarter.
Hanesbrands Inc. (HBI:24.76, -0.05, -0.2%) is forecast to report fourth-quarter earnings of 39 cents a share.
Marathon Oil Corp. (MRO:50.91, -1.22, -2.3%) is estimated to post earnings of 86 cents a share in the fourth quarter.
Sealy Corp. (ZZ:9.53, -0.13, -1.3%) is likely to report fourth-quarter earnings of 14 cents a share.
IMS Health Inc. (RX:21.13, -0.20, -0.9%) is forecast to post earnings of 42 cents a share in the fourth quarter.
ImClone Systems Inc. (IMCL:41.97, -1.79, -4.1%) is expected to post earnings of 27 cents a share in the fourth quarter.
Affymetrix Inc. (AFFX:20.77, -0.42, -2.0%) is estimated to report fourth-quarter earnings of 16 cents a share.
PPL Corp. (PPL:47.97, +0.27, +0.6%) is likely to report earnings of 54 cents a share in the fourth quarter.
Affiliated Computer Services (ACS:45.90, +0.15, +0.3%) is forecast to post fiscal second-quarter earnings of 83 cents a share.
Starwood Hotels & Resorts (HOT:42.90, -0.94, -2.1%) is expected to report fourth-quarter earnings of 67 cents a share.
Brinks Co. (BCO:54.50, +0.17, +0.3%) is likely to report earnings of 74 cents a share in the fourth quarter.
After Wednesday's closing bell, Starbucks (SBUX:19.22, -0.75, -3.8%) reported fiscal first-quarter net income of $208.1 million, or 28 cents a share, compared with net income of $205 million, or 26 cents a share, a year ago. Sales rose 17% to $2.8 billion. Starbucks also said it will close 100 underperforming U.S stores and expects "low double-digit" earnings-per-share growth in 2008. This month, founder Howard Schultz returned as CEO, pledging to slow the pace of U.S. store openings, close underperforming stores, and accelerate global expansion.
Watch list
Aflac Inc.'s (AFL:60.82, -1.41, -2.3%) fourth-quarter earnings rose to $382 million, or 78 cents a share, from $332 million, or 67 cents a share, as revenue benefited from the strengthening of the yen, the company said. Revenue increased to $4.02 billion from $3.69 billion a year earlier. Analysts had expected earnings of 80 cents a share on revenue of $3.96 billion. The insurance provider said it expects 2008 operating earnings, excluding the impact of the yen, of $3.70 to $3.76 a share on a sales increase of 8% to 12%. Wall Street, on average, expects 2008 earnings of $3.83 a share. Analyst estimates typically exclude items.
Alliance Data Systems Corp.'s (ADS:42.70, -0.30, -0.7%) fourth-quarter net income fell to $33.9 million, or 42 cents a share, from $39.6 million, or 48 cents a share, a year earlier. The transaction processor said revenue grew to $602.7 million from $524.5 million. Analysts had expected cash earnings of 93 cents a share on revenue of $601 million. The company expects double-digit organic growth in 2008.
Earlier Wednesday, Alliance Data sued Blackstone Group LP (BX:18.65, -0.34, -1.8%) to force the private-equity firm to go through with its $6.4 billion acquisition of the company.
Amazon.com (AMZN:74.21, +0.26, +0.4%) report fourth-quarter earnings of $207 million, or 48 cents a share, compared to earnings of $98 million, or 23 cents a share, for the same period the previous year. Revenue grew 42% to $5.67 billion. Analysts were expecting earnings of 48 cents a share on revenue of $5.37 billion. For the first quarter, the company said it expects revenue to come in between $3.95 billion and $4.15 billion - ahead of the $3.92 billion predicted by analysts.
Ann Taylor Stores Corp. (ANN:22.83, +0.23, +1.0%) will close 117 underperforming stores between 2008 and 2010 and reduce staff as part of a restructuring program to "enhance profitability and improve overall effectiveness." Ann Taylor expects the program to result in ongoing annual pretax savings of about $50 million by fiscal 2010, with savings of about $20 million to $25 million in 2008. The company expects to incur a charge of 29 cents a share in fiscal 2007. Excluding expenses, the company backed its previous fiscal 2007 earnings outlook of $1.80 to $1.85 a share.
CACI International Inc.'s (CAI:42.05, -0.92, -2.1%) fiscal second-quarter earnings fell to $19.2 million, or 63 cents a share, from $20.5 million, or 65 cents a share, a year earlier. The information technology company said revenue increased to $577.8 million from $476.9 million a year ago. Analysts had predicted earnings of 63 cents a share on revenue of $559.1 million for the quarter. The company raised the lower end of its 2008 outlook to $2.60 to $2.80 a share from its previous view of $2.50 a share to $2.80 a share.
Covance Inc.'s (CVD:88.10, -0.95, -1.1%) fourth-quarter earnings rose to $50.9 million, or 78 cents a share, from $38.3 million, or 59 cents a share, as the company booked more than $500 million in net orders. The biopharmaceutical company said revenue increased to $411 million from $343 million. Analysts had expected earnings of 72 cents a share on revenue of $402 million. Covance said it expects 2008 earnings of $3.18 per share on "low- to mid-teens revenue growth." Wall Street, on average, anticipates 2008 earnings of $3.19 a share.
Crown Holdings Inc.'s (CCK:24.00, +0.06, +0.3%) fourth-quarter net income increased to $343 million, or $2.11 a share, from $162 million, or 97 cents a share, a year earlier. Revenue rose to $1.87 billion from $1.68 billion a year ago. Analysts had predicted fourth-quarter revenue of $1.78 billion.
Cytec Industries Inc.'s (CYT:52.69, +0.21, +0.4%) fourth-quarter net income fell to $47.6 million, or 97 cents a share, from $83.4 million, or $1.70 a share, a year earlier. The chemical company said net sales rose to $901.2 million from $793.6 million a year ago. Analysts had predicted fourth-quarter earnings of 83 cents a share and revenue of $852.5 million. Cytec said it expects year earnings in the range of $4.15 to $4.35 a share, up from 2007 adjusted earnings $3.90 a share.
Duke Realty Corp.'s (DRE:24.34, -1.09, -4.3%) fourth-quarter net income rose to $62 million, or 40 cents a share, from $55 million, or 37 cents a share, a year earlier. Funds from operations for the period rose to $123.5 million, or 80 cents a share, from $112.7 million, or 76 cents a share, a year earlier. The real estate investment trust said revenue from continuing operations increased slightly to $261.4 million from $256.4 million a year ago. Duke lowered its 2008 funds from operation guidance to a range of $2.60 to $2.90 a share from a range of $2.80 to $3 a share.
Dun & Bradstreet Corp. (DNB:87.75, -1.55, -1.7%) reported its fourth-quarter net income rose to $101.7 million, or $1.74 a share, from $91.2 million, or $1.46 a share, a year earlier. Revenue rose to $464.7 million from $424.2 million, the business information, data and services company said. Analysts had forecast earnings of $1.67 a share. Dun & Bradstreet also said it expects earnings in 2008 to range from $5.19 to $5.29 a share before non-core gains and charges.
DynCorp International Inc.'s (DCP:21.02, -0.31, -1.4%) fiscal third-quarter earnings increased to $12 million, or 21 cents a share, from $11.6 million, or 20 cents a share, a year earlier. The mission-critical technical services provider's revenue rose to $523.1 million from $517.5 million a year ago. Analysts had expected third-quarter earnings of 28 cents a share, on revenue of $602 million. DynCorp now expects fiscal 2008 earnings of $1 to $1.05 a share, on revenue of $2.13 billion to $2.18 billion. Previously, the company had expected full-year earnings of $1 to $1.10 a share, on revenue of $2.3 billion to $2.4 billion. Wall Street is looking for fiscal 2008 earnings of $1.08 a share, on revenue of $2.29 billion.
Eagle Materials Inc.'s (EXP:34.53, -0.47, -1.3%) fiscal third-quarter net earnings declined to $22.4 million, or 50 cents a share, from $40.9 million, or 83 cents a share, a year ago. The cement manufacturer reported weakness in wallboard sales volumes and prices, as revenue fell to $173 million, from $191.8 million a year ago. Analysts had expected per-share earnings of 47 cents a share on revenue of $174 million.
Drug maker Eli Lilly & Co. (LLY:51.35, -0.96, -1.8%) is in talks to settle civil and criminal probes into how the company marketed its antipsychotic drug Zyprexa, The New York Times reported on its Web site, citing several sources close to the matter. The settlement could reach up to more than $1 billion paid to federal and state governments, the paper reported.
Everest Re Group (RE:97.21, -0.05, 0.0%) said fourth-quarter net income came in at $12.2 million, or 19 cents a share, down from $206.4 million, or $3.15 a share, a year ago. Everest Re was expected to make $1.19 a share, according to analysts.
Fannie Mae (FNM:31.13, -1.78, -5.4%) cut President and Chief Executive Daniel H. Mudd's 2007 bonus to about $2.22 million. Mudd received a 2006 bonus of $3.5 million. The financial services company also said Mudd will receive a 2007 long-term incentive award of $9 million. Fannie Mae disclosed in January 2007 that Mudd would receive a 2007 and 2008 base salary of $990,000.
Fidelity National Financial (FNF:17.86, -0.75, -4.0%) reported a fourth-quarter loss of $44.9 million, or 21 cents a share, compared with net income of $71.2 million, or 34 cents a share, a year earlier. Analysts expected the company to earn 18 cents a share.
Harris Corp.'s (HRS:49.25, -0.12, -0.2%) fiscal second-quarter net income increased to $114.3 million, or 83 cents a share, from $94 million, or 67 cents a share, a year earlier. The communication products company's revenue rose to $1.32 billion from $1.02 billion in the year-ago period. Analysts had expected per-share earnings of 81 cents on revenue of $1.25 billion. Harris increased its forecast for fiscal 2008, saying it expects per-share earnings of $3.35 to $3.45.
Hologic Inc.'s (HOLX:61.80, -1.80, -2.8%) board approved a 2-for-1 stock split that, pending shareholder authorization, will be effected in the form of a dividend. The premium diagnostic, medical imaging system and surgical product supplier is currently awaiting approval to increase the number of common shares it can issue to 750 million from 300 million.
Merrill Lynch & Co. (MER:56.09, -1.38, -2.4%) said it won't pay 2007 bonuses to executives at the investment bank, according to a regulatory filing. The brokerage firm will make stock option grants to some executives to encourage them to stay as it tackles tough market conditions this year. Gregory Fleming, chief operating officer, will get 1.19 million options and Vice Chairman Robert McCann is getting 971,346 options, Merrill said.
Novellus Systems Inc. (NVLS23.41, -0.82, -3.4%) reported fourth-quarter net income of $52.9 million, or 47 cents per share, compared with income of $42.6 million, or 34 cents per share for the year-earlier period. Revenue was $363.5 million, compared with $438.5 million in the year-earlier period. Analysts had expected the company to report earnings of 36 cents per share on revenue of $361.4 million.
Pulte Homes Inc.'s (PHM13.57, -1.28, -8.6%) fourth-quarter loss widened to $874.7 million, or $3.46 a share, from $8.41 million, or 3 cents a share, due to the continued weakening of existing home sales. The home builder said revenue fell to $2.9 billion from $4.39 billion last year. New home orders for the fourth quarter fell 29% to 4,562 from 6,446 last year, and Pulte Homes' backlog as of Dec. 31 of 7,890 homes was valued at $2.5 billion, down from $3.58 billion the previous year. Pulte Homes expects a first-quarter per-share loss from continuing operations of 15 cent to 30 cents.
Snap-on Inc.'s (SNA 43.84, +0.62, +1.4%) fourth-quarter net income rose to $57.3 million, or 98 cents a share, from $38 million, or 64 cents a share, a year earlier. Analysts had predicted fourth-quarter earnings of 82 cents a share. Net sales increased to $742.9 million from $651.4 million a year ago, the company said. Snap-on expects to record $15 million to $20 million in 2008 restructuring expenses, down from $26 million in 2007. The company predicts sales and operating earnings for the year will exceed its 2007 results due to the cost reduction.
Thursday, January 31, 2008
Two Stocks with Hefty Expected Returns Tuesday January 29, 6:00 pm ET
Following is a sampling of stocks that recently jumped to 5 stars. By way of background, we award a stock 5 stars when it trades at a suitably large discount--i.e., a margin of safety--to our fair value estimate. Thus, when a stock hits 5-star territory, we consider it an especially compelling value.
To get a complete tally of stocks that have recently jumped to 5 stars--as well as our full list of 5-star stocks--including our consider buying and selling prices, risk ratings, and moat ratings--simply take Morningstar Premium Membership for a test spin. Click here to sign up for a free trial.
Anheuser-Busch CompaniesMoat: Wide
Risk: Below Average
Price/Fair Value Ratio*: 0.83
Three-Year Expected Annual Return*: 15.5%
What It Does: Anheuser-Busch (NYSE:BUD - News) is the largest American brewer. Its domestic beer brands, which include Budweiser, Michelob, Busch, and Natural Light, are produced at 12 breweries in the United States. The company owns 50% of Grupo Modelo and has made substantial investments in Chinese breweries. It also owns a brewery in the United Kingdom and licenses its brands to various brewers worldwide. The company owns packaging companies and nine theme parks, including Sea World and Busch Gardens.
What Gives It an Edge: Morningstar analyst Ann Gilpin thinks Anheuser-Busch has a wide economic moat. The firm dominates the domestic beer market with nearly 50% share, and this scale advantage has allowed it to demand exclusivity from about 60% of its distributors, compared with 10% of its peers' volume that is distributed under exclusive arrangements. Anheuser-Busch's infrastructure for the distribution of alcoholic beverages in the U.S. is unparalleled, and the firm should be able to further leverage this system to generate improved growth by branching into faster-growth categories.
What the Risks Are: Because brewers have high fixed costs, weak volume trends significantly deteriorate profits. Wine and spirits have grown in popularity domestically at the expense of beer during the last few years, making each of the oligopolistic U.S. brewers more willing to discount to maintain volume. As a consequence, the domestic beer pricing environment, which was strong for a number of years, has become increasingly competitive.
What the Market Is Missing: Gilpin believes the market is preoccupied with near-term commodity (hops and barley) cost issues affecting all brewers, and it is discounting Anheuser-Busch's brands, unmatched scale, and its history of generating strong cash flows. Gilpin anticipates a more rational domestic pricing environment as the industry consolidates, on the heels of the recent joint venture agreement between SABMiller and Molson Coors (NYSE:TAP - News). Although Gilpin concedes that commodity costs may take a bite out of margins in 2008, she believes Anheuser-Busch will weather the storm and provide its investors with ample returns.
General MillsMoat: Narrow
Risk: Below Average
Price/Fair Value Ratio*: 0.81
Three-Year Expected Annual Return*: 17.3%
What It Does: General Mills (NYSE:GIS - News) is one of the largest packaged food companies in the United States. It produces ready-to-eat breakfast cereals, refrigerated dough and other baking items, snack and convenience foods, frozen vegetables, yogurt, and beverages. Well-known brands include Cheerios, Lucky Charms, Wheaties, Chex, Betty Crocker, Pillsbury, Gold Medal, Green Giant, Hamburger Helper, Old El Paso, Pop Secret, Colombo, and Yoplait. U.S. sales account for 85% of the firm's annual revenues.
What Gives It an Edge: With its well-known brands, General Mills has significant presence in the grocery aisles. More importantly, the company holds either the number-one or number-two market position in 12 product categories. Such strong brands allow General Mills to acquire favorable shelf space at retail and charge premium prices for its products, producing industry-leading margins and superior returns on invested capital. As a result, Morningstar analyst Greggory Warren has assigned General Mills a narrow moat.
What the Risks Are: General Mills is heavily influenced by the commodity-driven nature of its business. Input cost volatility, as well as the commodification of several of its categories, such as ready-to-eat cereals, has had an impact on profitability. General Mills faces stiff competition from branded and private-label food manufacturers in many of its product lines. Increased volatility in its foodservice segment has also been detrimental to the firm's sales and earnings growth during the last few years.
What the Market Is Missing: Warren thinks most of the packaged food firms have traded down over the past month on growing concerns over commodity cost inflation. However, he counters that the food and beverage manufacturers have in the past been able to pass much of the increase along to customers, either through straight price increases or ingenious alternatives. Although Warren believes the price hikes could negatively impact volume, the effect will differ depending on the product category involved. With below-average private-label penetration in categories such as ready-to-eat cereals (15%) and yogurt, which combined make up more than one third of the company's annual sales, Warren does not see much potential for disruption in General Mills' business. Soup sales are also not likely to be troubled, as the firm's chief competitor, Campbell Soup (NYSE:CPB - News), needs to be rational with its pricing for a category that makes up about half of its sales and profitability.
To get a complete tally of stocks that have recently jumped to 5 stars--as well as our full list of 5-star stocks--including our consider buying and selling prices, risk ratings, and moat ratings--simply take Morningstar Premium Membership for a test spin. Click here to sign up for a free trial.
Anheuser-Busch CompaniesMoat: Wide
Risk: Below Average
Price/Fair Value Ratio*: 0.83
Three-Year Expected Annual Return*: 15.5%
What It Does: Anheuser-Busch (NYSE:BUD - News) is the largest American brewer. Its domestic beer brands, which include Budweiser, Michelob, Busch, and Natural Light, are produced at 12 breweries in the United States. The company owns 50% of Grupo Modelo and has made substantial investments in Chinese breweries. It also owns a brewery in the United Kingdom and licenses its brands to various brewers worldwide. The company owns packaging companies and nine theme parks, including Sea World and Busch Gardens.
What Gives It an Edge: Morningstar analyst Ann Gilpin thinks Anheuser-Busch has a wide economic moat. The firm dominates the domestic beer market with nearly 50% share, and this scale advantage has allowed it to demand exclusivity from about 60% of its distributors, compared with 10% of its peers' volume that is distributed under exclusive arrangements. Anheuser-Busch's infrastructure for the distribution of alcoholic beverages in the U.S. is unparalleled, and the firm should be able to further leverage this system to generate improved growth by branching into faster-growth categories.
What the Risks Are: Because brewers have high fixed costs, weak volume trends significantly deteriorate profits. Wine and spirits have grown in popularity domestically at the expense of beer during the last few years, making each of the oligopolistic U.S. brewers more willing to discount to maintain volume. As a consequence, the domestic beer pricing environment, which was strong for a number of years, has become increasingly competitive.
What the Market Is Missing: Gilpin believes the market is preoccupied with near-term commodity (hops and barley) cost issues affecting all brewers, and it is discounting Anheuser-Busch's brands, unmatched scale, and its history of generating strong cash flows. Gilpin anticipates a more rational domestic pricing environment as the industry consolidates, on the heels of the recent joint venture agreement between SABMiller and Molson Coors (NYSE:TAP - News). Although Gilpin concedes that commodity costs may take a bite out of margins in 2008, she believes Anheuser-Busch will weather the storm and provide its investors with ample returns.
General MillsMoat: Narrow
Risk: Below Average
Price/Fair Value Ratio*: 0.81
Three-Year Expected Annual Return*: 17.3%
What It Does: General Mills (NYSE:GIS - News) is one of the largest packaged food companies in the United States. It produces ready-to-eat breakfast cereals, refrigerated dough and other baking items, snack and convenience foods, frozen vegetables, yogurt, and beverages. Well-known brands include Cheerios, Lucky Charms, Wheaties, Chex, Betty Crocker, Pillsbury, Gold Medal, Green Giant, Hamburger Helper, Old El Paso, Pop Secret, Colombo, and Yoplait. U.S. sales account for 85% of the firm's annual revenues.
What Gives It an Edge: With its well-known brands, General Mills has significant presence in the grocery aisles. More importantly, the company holds either the number-one or number-two market position in 12 product categories. Such strong brands allow General Mills to acquire favorable shelf space at retail and charge premium prices for its products, producing industry-leading margins and superior returns on invested capital. As a result, Morningstar analyst Greggory Warren has assigned General Mills a narrow moat.
What the Risks Are: General Mills is heavily influenced by the commodity-driven nature of its business. Input cost volatility, as well as the commodification of several of its categories, such as ready-to-eat cereals, has had an impact on profitability. General Mills faces stiff competition from branded and private-label food manufacturers in many of its product lines. Increased volatility in its foodservice segment has also been detrimental to the firm's sales and earnings growth during the last few years.
What the Market Is Missing: Warren thinks most of the packaged food firms have traded down over the past month on growing concerns over commodity cost inflation. However, he counters that the food and beverage manufacturers have in the past been able to pass much of the increase along to customers, either through straight price increases or ingenious alternatives. Although Warren believes the price hikes could negatively impact volume, the effect will differ depending on the product category involved. With below-average private-label penetration in categories such as ready-to-eat cereals (15%) and yogurt, which combined make up more than one third of the company's annual sales, Warren does not see much potential for disruption in General Mills' business. Soup sales are also not likely to be troubled, as the firm's chief competitor, Campbell Soup (NYSE:CPB - News), needs to be rational with its pricing for a category that makes up about half of its sales and profitability.
Wednesday, January 30, 2008
Boeing Boosts 4Q Profit on Plane Sales
Boeing Co. rode continued momentum from its commercial airplane business to a 4 percent increase in fourth-quarter profits Wednesday, topping Wall Street's expectations despite ongoing concerns over delays in its 787 Dreamliner program.
The world's second-largest commercial jet maker said it continues to address problems in assembling the first 787s and slightly reduced its estimate for both 2008 revenue and deliveries because of the previously announced glitches. It said it remains on the revised schedule announced earlier this month for the new plane, which has been pushed back three times and now isn't due to enter service until next year, but won't assess the impact of the delays on 2009 results until April.
The company characterized the outlook for its military contracting business and commercial airplane programs next year as "very strong," with strong earnings growth anticipated.
That helped lift Boeing shares, which had fallen 30 percent since last fall, by $2.82, or 3.5 percent, $83.78 in midday trading.
While avoiding talk of specific timeframes for the 787 program, CEO Jim McNerney said the fundamental technology of the airplane remains sound.
We believe in both the business case and the technology of the 787 and we look forward to getting the airplane in the hands of our customers as soon as possible," he said on a conference call.
Despite the 787 problems and the threat of a U.S. recession that could hurt its airline customers, McNerney was bullish about Boeing's near-term future and noted that U.S. carriers account for only 11 percent of its airplane backlog.
"Notwithstanding some recent events and market volatility, we continue to forecast an extended commercial aerospace cycle driven by strong economic growth and solid traffic demand in much of the world," he said. "Even if we encounter a more significant economic downturn in the future, I believe the industry is better positioned than in past cycles and Boeing is even better positioned within the industry to weather any storms."
Boeing's net income for the last three months of 2007 was $1.03 billion, or $1.36 per share, up from $989 million, or $1.29 per share, in the fourth quarter of 2006. That was 4 cents per share better than the consensus estimate of analysts polled by Thomson Financial.
Revenue was $17.5 billion, flat with a year earlier but slightly above analysts' forecast of $17.3 billion.
The company increased its guidance for 2008 earnings per share to between $5.70 and $5.85 from an earlier range of $5.55 to $5.75, still short of the Wall Street consensus estimate of $5.95. It also lowered its estimate of 2008 revenue by $500 million, to a range of $67 billion to $68 billion, due to the 787 delay.
Boeing's continued resurgence in the quarter was led by its Seattle-based commercial airplane manufacturing business, where operating earnings increased 46 percent to $973 million and revenue jumped 17 percent to $8.9 billion. Deliveries rose 9 percent to 112 and the record backlog grew 46 percent to $255 billion, reflecting strong demand for the 787 and other planes.
The Chicago-based company closed the gap on Airbus in aircraft deliveries but still ended the
year trailing its European rival for a fifth straight year, 453 to 441, while outpacing it in orders. It scaled back its estimate of 2008 deliveries by about five airplanes to between 475 and 480 to reflect the rescheduling of initial 787 deliveries into 2009.
The unit's continued success depends on how quickly Boeing can untangle snags involving the 787, Boeing's first newly designed jet since airlines started flying the 777 in 1995. It will be the world's first large commercial airplane made mostly of carbon-fiber composites, which are lighter and more durable than aluminum and don't corrode like metals.
Boeing said Jan. 16 it would push back the 787's inaugural flight until the end of the second quarter due to supply chain problems and slow progress on the assembly line, with the first delivery not expected until early 2009.
Analyst Paul Nisbet of JSA Research said the 787's status won't be fully known until the company succeeds in "powering up" or turning on the aircraft and its 92 electronic systems. That event was pushed back two weeks ago until early in the second quarter.
Despite the 787 concerns, Nisbet said: "It was a strong quarter. They've been just knocking the cover off the ball as far as orders, with 520 for the quarter, and with a (companywide) backlog of $327 billion. Those are just unheard-of numbers."
The company's St. Louis-based military contracting business saw earnings from operations decline 5 percent to $978 million and revenue fall 14 percent to $8.6 billion. The revenue drop was largely because results from a year earlier included two months of revenue from its Delta IV family of rockets, which are now part of United Launch Alliance, a joint venture with Lockheed Martin Corp.
Boeing had full-year earnings of $4.1 billion, or $5.28 per share, up 84 percent from $2.2 billion, or $2.85 per share, in 2006. Revenue climbed 8 percent to $66.4 billion from $61.5 billion.
The world's second-largest commercial jet maker said it continues to address problems in assembling the first 787s and slightly reduced its estimate for both 2008 revenue and deliveries because of the previously announced glitches. It said it remains on the revised schedule announced earlier this month for the new plane, which has been pushed back three times and now isn't due to enter service until next year, but won't assess the impact of the delays on 2009 results until April.
The company characterized the outlook for its military contracting business and commercial airplane programs next year as "very strong," with strong earnings growth anticipated.
That helped lift Boeing shares, which had fallen 30 percent since last fall, by $2.82, or 3.5 percent, $83.78 in midday trading.
While avoiding talk of specific timeframes for the 787 program, CEO Jim McNerney said the fundamental technology of the airplane remains sound.
We believe in both the business case and the technology of the 787 and we look forward to getting the airplane in the hands of our customers as soon as possible," he said on a conference call.
Despite the 787 problems and the threat of a U.S. recession that could hurt its airline customers, McNerney was bullish about Boeing's near-term future and noted that U.S. carriers account for only 11 percent of its airplane backlog.
"Notwithstanding some recent events and market volatility, we continue to forecast an extended commercial aerospace cycle driven by strong economic growth and solid traffic demand in much of the world," he said. "Even if we encounter a more significant economic downturn in the future, I believe the industry is better positioned than in past cycles and Boeing is even better positioned within the industry to weather any storms."
Boeing's net income for the last three months of 2007 was $1.03 billion, or $1.36 per share, up from $989 million, or $1.29 per share, in the fourth quarter of 2006. That was 4 cents per share better than the consensus estimate of analysts polled by Thomson Financial.
Revenue was $17.5 billion, flat with a year earlier but slightly above analysts' forecast of $17.3 billion.
The company increased its guidance for 2008 earnings per share to between $5.70 and $5.85 from an earlier range of $5.55 to $5.75, still short of the Wall Street consensus estimate of $5.95. It also lowered its estimate of 2008 revenue by $500 million, to a range of $67 billion to $68 billion, due to the 787 delay.
Boeing's continued resurgence in the quarter was led by its Seattle-based commercial airplane manufacturing business, where operating earnings increased 46 percent to $973 million and revenue jumped 17 percent to $8.9 billion. Deliveries rose 9 percent to 112 and the record backlog grew 46 percent to $255 billion, reflecting strong demand for the 787 and other planes.
The Chicago-based company closed the gap on Airbus in aircraft deliveries but still ended the
year trailing its European rival for a fifth straight year, 453 to 441, while outpacing it in orders. It scaled back its estimate of 2008 deliveries by about five airplanes to between 475 and 480 to reflect the rescheduling of initial 787 deliveries into 2009.
The unit's continued success depends on how quickly Boeing can untangle snags involving the 787, Boeing's first newly designed jet since airlines started flying the 777 in 1995. It will be the world's first large commercial airplane made mostly of carbon-fiber composites, which are lighter and more durable than aluminum and don't corrode like metals.
Boeing said Jan. 16 it would push back the 787's inaugural flight until the end of the second quarter due to supply chain problems and slow progress on the assembly line, with the first delivery not expected until early 2009.
Analyst Paul Nisbet of JSA Research said the 787's status won't be fully known until the company succeeds in "powering up" or turning on the aircraft and its 92 electronic systems. That event was pushed back two weeks ago until early in the second quarter.
Despite the 787 concerns, Nisbet said: "It was a strong quarter. They've been just knocking the cover off the ball as far as orders, with 520 for the quarter, and with a (companywide) backlog of $327 billion. Those are just unheard-of numbers."
The company's St. Louis-based military contracting business saw earnings from operations decline 5 percent to $978 million and revenue fall 14 percent to $8.6 billion. The revenue drop was largely because results from a year earlier included two months of revenue from its Delta IV family of rockets, which are now part of United Launch Alliance, a joint venture with Lockheed Martin Corp.
Boeing had full-year earnings of $4.1 billion, or $5.28 per share, up 84 percent from $2.2 billion, or $2.85 per share, in 2006. Revenue climbed 8 percent to $66.4 billion from $61.5 billion.
Fed May Cut Rates Again Today
Federal Reserve Is Expected to Cut a Key Interest Rate for a 5th Time
The Federal Reserve is likely to follow its bold action last week to battle an economic downturn with further interest rate reductions, although analysts are split on just what size the future cuts will be.
Some believe the Fed will settle into a series of quarter-point moves, especially if upcoming economic reports show the economy is slowing but not toppling into an actual recession.
That would mean the Fed will cut its federal funds rate, the interest that banks charge each other, by a quarter point at the conclusion of Wednesday's meeting. It would be the fifth rate cut since last September.
Last week, the Fed announced a surprise three-quarter-point cut which drove the funds rate down to 3.5 percent. It was the largest reduction in this rate in more than two decades and the first change in the funds rate between meetings since the immediate aftermath of the September 2001 terrorist attacks.
Federal Reserve Chairman Ben Bernanke and his colleagues held an emergency videoconference call on Jan. 21 after a turbulent day on world markets when investors grew increasingly worried about what a recession in the United States would do to the prospects for global growth.
Many analysts believed the Fed would quickly follow last week's aggressive move with a cut of at least a half-point at its first regular meeting of the new year. That view gained support on Wednesday hours before the Fed announcement, when the government reported that the total economy slowed to a barely discernible 0.6 percent growth rate in the final three months of last year.
The increase in the gross domestic product was just half what had been expected and some economists believe that the GDP could tumble into negative territory in the current quarter. One definition of a recession is two consecutive quarters of negative GDP.
However, other economists said they were still looking for just a quarter-point move by the Fed because other reports show the economy appears to be skirting a full-blown recession.
In the category of positive reports was news Tuesday that orders to U.S. factories for big-ticket durable goods jumped 5.2 percent in December, the biggest increase in five months, and demand in a key series that tracks business investment shot up at the fastest pace since last March.
The House, worried about the possibility of a downturn, overwhelmingly approved a $146 billion economic stimulus bill on Tuesday. Passage in the Senate could be slowed by an effort to expand the measure.
Whatever the Fed does Thursday, analysts said that further rate cuts are likely until the central bank is sure that the economy is back on sound footing. Bernanke pledged in a speech on Jan. 10 to take decisive action to combat a slowdown. Many economists believe the funds rate could fall to 2.5 percent before the Fed stops easing.
"It is clear that the Fed has moved into a crisis-fighting posture," said David Jones, chief economist at DMJ Advisors.
The Federal Reserve is likely to follow its bold action last week to battle an economic downturn with further interest rate reductions, although analysts are split on just what size the future cuts will be.
Some believe the Fed will settle into a series of quarter-point moves, especially if upcoming economic reports show the economy is slowing but not toppling into an actual recession.
That would mean the Fed will cut its federal funds rate, the interest that banks charge each other, by a quarter point at the conclusion of Wednesday's meeting. It would be the fifth rate cut since last September.
Last week, the Fed announced a surprise three-quarter-point cut which drove the funds rate down to 3.5 percent. It was the largest reduction in this rate in more than two decades and the first change in the funds rate between meetings since the immediate aftermath of the September 2001 terrorist attacks.
Federal Reserve Chairman Ben Bernanke and his colleagues held an emergency videoconference call on Jan. 21 after a turbulent day on world markets when investors grew increasingly worried about what a recession in the United States would do to the prospects for global growth.
Many analysts believed the Fed would quickly follow last week's aggressive move with a cut of at least a half-point at its first regular meeting of the new year. That view gained support on Wednesday hours before the Fed announcement, when the government reported that the total economy slowed to a barely discernible 0.6 percent growth rate in the final three months of last year.
The increase in the gross domestic product was just half what had been expected and some economists believe that the GDP could tumble into negative territory in the current quarter. One definition of a recession is two consecutive quarters of negative GDP.
However, other economists said they were still looking for just a quarter-point move by the Fed because other reports show the economy appears to be skirting a full-blown recession.
In the category of positive reports was news Tuesday that orders to U.S. factories for big-ticket durable goods jumped 5.2 percent in December, the biggest increase in five months, and demand in a key series that tracks business investment shot up at the fastest pace since last March.
The House, worried about the possibility of a downturn, overwhelmingly approved a $146 billion economic stimulus bill on Tuesday. Passage in the Senate could be slowed by an effort to expand the measure.
Whatever the Fed does Thursday, analysts said that further rate cuts are likely until the central bank is sure that the economy is back on sound footing. Bernanke pledged in a speech on Jan. 10 to take decisive action to combat a slowdown. Many economists believe the funds rate could fall to 2.5 percent before the Fed stops easing.
"It is clear that the Fed has moved into a crisis-fighting posture," said David Jones, chief economist at DMJ Advisors.
Tuesday, January 29, 2008
Stocks Higher As Investors Await Fed
Wall Street was mostly higher Tuesday as the Federal Reserve opened a two-day meeting expected to bring another interest rate cut to revitalize the U.S. economy.
The Fed's rate decision is clearly the market's focus this week, and trading is marked by investors' conjectures about policymakers' thoughts on the weak economy and crunched financial industry. With an announcement not expected until Wednesday afternoon, the market in the meantime digested data on earnings, consumer spending and durable goods.
Investors did get some encouragement about the economy after the Commerce Department said orders for big-ticket items rose 5.2 percent in December, the widest jump in five months. In addition, the Conference Board reported consumer confidence fell in January -- pretty much as expected.
Economic data will continue to be scrutinized as investors try to determine what the Fed's take is on the economy. Investors are angling for a half-point cut following its emergency three-quarter-point cut last week.
"The market is just in a holding pattern," said Todd Leone, managing director of equity trading at Cowen & Co. "It seems we've hit a short-term bottom, and the market has been stabilizing as we wait to hear what the Fed says."
In early afternoon trading, the Dow Jones industrial average rose 37.64, or 0.30 percent, to 12,421.53.
Broader indexes were mixed. The Standard & Poor's 500 index rose 2.20, or 0.16 percent, to 1,356.16, and the Nasdaq composite fell 4.82, or 0.21 percent, to 2,345.09.
Government bond prices fell as stocks rose, indicating that investors feel less need for the safety of Treasurys. The 10-year Treasury note's yield, which moves opposite its price, was at 3.67 percent, up from 3.58 percent late Monday.
The dollar was mixed against most major currencies, and gold prices fell.
Oil prices moved higher as traders waited to see what the Fed's next move will be. A barrel of light sweet crude fell 23 cents to $90.76 a barrel on the New York Mercantile Exchange.
Wall Street has been extremely volatile in recent weeks amid fears of a U.S. recession and further write-downs in the financial sector. However, that has given way to a more quiet tone this week as investors looked for their second-straight day of gains before the Fed's decision.
Central bankers are widely expected to lower its key rate, now at 3.5 percent, by as much as one-half percentage point to 3 percent when policy-makers wrap up on Wednesday. This will be the last meeting for two months, but that doesn't rule out another emergency cut in the meantime.
Rate cuts are just one part of the central bank's plan to boost the economy. The Fed auctioned $30 billion in funds to commercial banks on Tuesday -- the fourth time since last month it has provided cash-strapped banks with extra reserves.
The auction is designed to keep banks lending and prevent a severe credit squeeze from pushing the country into a recession. Global banks have lost about $141 billion since the credit crisis began last year.
Investors were also hopeful after President Bush's State of the Union address Monday night. Bush urged Congress, as expected, to expedite its approval of a $150 billion tax relief and business incentive package.
As American Express Co.'s fourth-quarter results indicated Monday, companies are being forced to prepare for a climate throughout 2008 of deteriorating credit and slower spending. American Express said its fourth-quarter profit fell 10 percent after socking away more cash in reserve to use in case cardholders can't pay back their debt. AmEx rose 10 cents to $47.50.
In other earnings news, 3M Co., the maker of Post-it notes and Scotch tape, reported on Tuesday a decline in net income but the results beat analyst expectations. 3M rose 75 cents to $78.19.
The embattled mortgage lender Countrywide Financial Corp., which was recently bought by Bank of America Corp., posted a sharp loss, as expected, due to its missteps in subprime lending.
Countrywide rose 25 cents, or 4.2 percent, to $6.20; BofA added 46 cents to $41.66.
The Russell 2000 index of smaller companies dipped 1.13, or 0.16 percent, to 701.26.
Advancing issues led decliners by a 4-to-3 basis on the New York Stock Exchange, where volume came to 758.9 million.
In Asian trading, Tokyo's Nikkei stock average closed up 2.99 percent; Shanghai's key index added 0.87 percent; and Hong Kong's main index rose 0.99 percent. In European trading, London's FTSE rose 1.66 percent; Frankfurt's DAX rose 1.09 percent; and Paris' CAC rose 1.92 percent.
The Fed's rate decision is clearly the market's focus this week, and trading is marked by investors' conjectures about policymakers' thoughts on the weak economy and crunched financial industry. With an announcement not expected until Wednesday afternoon, the market in the meantime digested data on earnings, consumer spending and durable goods.
Investors did get some encouragement about the economy after the Commerce Department said orders for big-ticket items rose 5.2 percent in December, the widest jump in five months. In addition, the Conference Board reported consumer confidence fell in January -- pretty much as expected.
Economic data will continue to be scrutinized as investors try to determine what the Fed's take is on the economy. Investors are angling for a half-point cut following its emergency three-quarter-point cut last week.
"The market is just in a holding pattern," said Todd Leone, managing director of equity trading at Cowen & Co. "It seems we've hit a short-term bottom, and the market has been stabilizing as we wait to hear what the Fed says."
In early afternoon trading, the Dow Jones industrial average rose 37.64, or 0.30 percent, to 12,421.53.
Broader indexes were mixed. The Standard & Poor's 500 index rose 2.20, or 0.16 percent, to 1,356.16, and the Nasdaq composite fell 4.82, or 0.21 percent, to 2,345.09.
Government bond prices fell as stocks rose, indicating that investors feel less need for the safety of Treasurys. The 10-year Treasury note's yield, which moves opposite its price, was at 3.67 percent, up from 3.58 percent late Monday.
The dollar was mixed against most major currencies, and gold prices fell.
Oil prices moved higher as traders waited to see what the Fed's next move will be. A barrel of light sweet crude fell 23 cents to $90.76 a barrel on the New York Mercantile Exchange.
Wall Street has been extremely volatile in recent weeks amid fears of a U.S. recession and further write-downs in the financial sector. However, that has given way to a more quiet tone this week as investors looked for their second-straight day of gains before the Fed's decision.
Central bankers are widely expected to lower its key rate, now at 3.5 percent, by as much as one-half percentage point to 3 percent when policy-makers wrap up on Wednesday. This will be the last meeting for two months, but that doesn't rule out another emergency cut in the meantime.
Rate cuts are just one part of the central bank's plan to boost the economy. The Fed auctioned $30 billion in funds to commercial banks on Tuesday -- the fourth time since last month it has provided cash-strapped banks with extra reserves.
The auction is designed to keep banks lending and prevent a severe credit squeeze from pushing the country into a recession. Global banks have lost about $141 billion since the credit crisis began last year.
Investors were also hopeful after President Bush's State of the Union address Monday night. Bush urged Congress, as expected, to expedite its approval of a $150 billion tax relief and business incentive package.
As American Express Co.'s fourth-quarter results indicated Monday, companies are being forced to prepare for a climate throughout 2008 of deteriorating credit and slower spending. American Express said its fourth-quarter profit fell 10 percent after socking away more cash in reserve to use in case cardholders can't pay back their debt. AmEx rose 10 cents to $47.50.
In other earnings news, 3M Co., the maker of Post-it notes and Scotch tape, reported on Tuesday a decline in net income but the results beat analyst expectations. 3M rose 75 cents to $78.19.
The embattled mortgage lender Countrywide Financial Corp., which was recently bought by Bank of America Corp., posted a sharp loss, as expected, due to its missteps in subprime lending.
Countrywide rose 25 cents, or 4.2 percent, to $6.20; BofA added 46 cents to $41.66.
The Russell 2000 index of smaller companies dipped 1.13, or 0.16 percent, to 701.26.
Advancing issues led decliners by a 4-to-3 basis on the New York Stock Exchange, where volume came to 758.9 million.
In Asian trading, Tokyo's Nikkei stock average closed up 2.99 percent; Shanghai's key index added 0.87 percent; and Hong Kong's main index rose 0.99 percent. In European trading, London's FTSE rose 1.66 percent; Frankfurt's DAX rose 1.09 percent; and Paris' CAC rose 1.92 percent.
Latest Updates
11:30 am : In the past half-hour, the Dow climbs to fresh session highs and the S&P trades near its intraday high. The Nasdaq is well off its lows, but has been unable to reach its opening highs as it trades slightly above the unchanged mark.
The International Monetary Fund (IMF) cut its forecast for world growth this year, citing continued stress in global credit markets, according to Reuters. The IMF also warned that economic activity could slow further. It now expects the global economy to grow 4.1%, compared to its earlier forecast of 4.4%.DJ30 +77.72 NASDAQ +3.56 SP500 +7.37 NASDAQ Dec/Adv/Vol 1337/1422/725 mln NYSE Dec/Adv/Vol 1115/1870/477 mln
11:00 am : The major indices are trading in mixed fashion. The Dow and S&P
are holding slight gains, while the Nasdaq is trading with a slight loss. Seven of the ten sectors are higher, led by a 2.6% surge in telecom. Consumer discretionary is the main laggard (-0.7%) as retailers shed 1%.
The market rumor that JPMorgan Chase (JPM 45.95, +0.83) was facing a big derivative loss is not true, according to Reuters, citing sources. JPMorgan has been relatively unscathed by the subprime turmoil that has mired other Wall Street banks.DJ30 +47.13 NASDAQ -3.88 SP500 +4.71 NASDAQ Dec/Adv/Vol 1363/1332/579 mln NYSE Dec/Adv/Vol 1167/1759/366 mln
10:30 am : The stock market is back in the green as it rises in conjunction with financials (+0.7%). JPMorgan (JPM 45.88, +0.31) declined sharply during the recent retreat on a headline that stated there is a rumor the company may be facing a large trading loss. A CNBC commentator has said the rumor is most likely not true, as the stock recovers.
After a rough start, 3M (MMM 77.84, +0.40) is modestly outperforming the broader market. The company reported fourth quarter earnings of $1.19 per share, topping estimates by two cents. The company also reiterated its 2008 guidance. The stock was lower at the start of trading, but has rebounded in the green after traders liked what the company said during its conference call. DJ30 +54.22 NASDAQ -1.21 SP500 +5.23 NASDAQ Dec/Adv/Vol 1397/1195/419 mln NYSE Dec/Adv/Vol 1329/1550/258 mln
10:05 am : Stocks give up their early gains, led by a dip in tech (-0.8%) and financials (-0.2%).
Just hitting the wires, the Conference Board said January consumer confidence was 87.9, down from December's revised reading of 90.6. Economists expected a reading of 87.0. The response immediately after the release was negative, sending the major indices to their session lows.
The weakness in tech is weighing on the Nasdaq, which is now trading with a modest loss. The S&P and Dow are trading with a slight loss.DJ30 -15.52 NASDAQ -16.08 SP500 -2.25 NASDAQ Dec/Adv/Vol 857/1509/134 mln
09:45 am : The stock market opens modestly higher, buoyed by a better than expected durable orders report.
December durable orders rose 5.2%, larger than the expected 1.6% rise. Excluding transportation, orders still rose a healthy 2.6%. This strong level of orders in December does not support the assertion that the economy is in a recession.
Earnings reports have been mostly better than expected, although some companies disappointed with their outlooks.
The consumer confidence reading will be released at the top of the hour.DJ30 +47.31 NASDAQ +7.90 SP500 +6.73
09:13 am : S&P futures vs fair value: +9.2. Nasdaq futures vs fair value: +11.8.
08:59 am : S&P futures vs fair value: +8.7. Nasdaq futures vs fair value: +12.0. Futures continue to point to a higher start. The FOMC begins its two day meeting today, and is set to issue its statement on Wednesday at 14:15 ET. Fed funds futures indicate a 76% chance of a 50 basis point cut, with the rest of the bets on a 25 basis point cut.
08:30 am : S&P futures vs fair value: +9.9. Nasdaq futures vs fair value: +9.5. Stock futures extended their gains, and then climb higher on a better than expected economic release. December Durable orders rose 5.2%, compared November’s revised reading of 0.5%. Economists expected a rise of 1.6%. Countrywide (CFC) reported a fourth quarter loss of $0.79 per share, $0.49 worse than the consensus estimate. The company issued a dividend of $0.15 on its common shares. It will not be holding a conference call to discuss its results due to its pending merger with Bank of America.
08:01 am : S&P futures vs fair value: +3.3. Nasdaq futures vs fair value: flat. Futures point to a flat to slightly higher open. Earnings reports have been mostly better than expected. 3M (MMM) topped estimates by two cents and reaffirmed its FY08 earnings guidance. Eli Lilly (LLY) and EMC (EMC) beat their estimates and provided reassuring FY08 guidance. American Express (AXP) met, but continues to be cautious in its 2008 outlook. VMware (VMW) beat expectations but is getting clipped in pre-market trading after guiding revenues slightly below the consensus estimate.
06:19 am : S&P futures vs fair value: +5.9. Nasdaq futures vs fair value: +3.3.
06:16 am : FTSE...5883.60...+94.70...+1.6%. DAX...6911.98...+93.13...+1.4%.
06:16 am : Nikkei...13478.86...+390.95...+3.0%. Hang Seng...24291.80...+238.19...+1.0%.
The International Monetary Fund (IMF) cut its forecast for world growth this year, citing continued stress in global credit markets, according to Reuters. The IMF also warned that economic activity could slow further. It now expects the global economy to grow 4.1%, compared to its earlier forecast of 4.4%.DJ30 +77.72 NASDAQ +3.56 SP500 +7.37 NASDAQ Dec/Adv/Vol 1337/1422/725 mln NYSE Dec/Adv/Vol 1115/1870/477 mln
11:00 am : The major indices are trading in mixed fashion. The Dow and S&P
are holding slight gains, while the Nasdaq is trading with a slight loss. Seven of the ten sectors are higher, led by a 2.6% surge in telecom. Consumer discretionary is the main laggard (-0.7%) as retailers shed 1%.
The market rumor that JPMorgan Chase (JPM 45.95, +0.83) was facing a big derivative loss is not true, according to Reuters, citing sources. JPMorgan has been relatively unscathed by the subprime turmoil that has mired other Wall Street banks.DJ30 +47.13 NASDAQ -3.88 SP500 +4.71 NASDAQ Dec/Adv/Vol 1363/1332/579 mln NYSE Dec/Adv/Vol 1167/1759/366 mln
10:30 am : The stock market is back in the green as it rises in conjunction with financials (+0.7%). JPMorgan (JPM 45.88, +0.31) declined sharply during the recent retreat on a headline that stated there is a rumor the company may be facing a large trading loss. A CNBC commentator has said the rumor is most likely not true, as the stock recovers.
After a rough start, 3M (MMM 77.84, +0.40) is modestly outperforming the broader market. The company reported fourth quarter earnings of $1.19 per share, topping estimates by two cents. The company also reiterated its 2008 guidance. The stock was lower at the start of trading, but has rebounded in the green after traders liked what the company said during its conference call. DJ30 +54.22 NASDAQ -1.21 SP500 +5.23 NASDAQ Dec/Adv/Vol 1397/1195/419 mln NYSE Dec/Adv/Vol 1329/1550/258 mln
10:05 am : Stocks give up their early gains, led by a dip in tech (-0.8%) and financials (-0.2%).
Just hitting the wires, the Conference Board said January consumer confidence was 87.9, down from December's revised reading of 90.6. Economists expected a reading of 87.0. The response immediately after the release was negative, sending the major indices to their session lows.
The weakness in tech is weighing on the Nasdaq, which is now trading with a modest loss. The S&P and Dow are trading with a slight loss.DJ30 -15.52 NASDAQ -16.08 SP500 -2.25 NASDAQ Dec/Adv/Vol 857/1509/134 mln
09:45 am : The stock market opens modestly higher, buoyed by a better than expected durable orders report.
December durable orders rose 5.2%, larger than the expected 1.6% rise. Excluding transportation, orders still rose a healthy 2.6%. This strong level of orders in December does not support the assertion that the economy is in a recession.
Earnings reports have been mostly better than expected, although some companies disappointed with their outlooks.
The consumer confidence reading will be released at the top of the hour.DJ30 +47.31 NASDAQ +7.90 SP500 +6.73
09:13 am : S&P futures vs fair value: +9.2. Nasdaq futures vs fair value: +11.8.
08:59 am : S&P futures vs fair value: +8.7. Nasdaq futures vs fair value: +12.0. Futures continue to point to a higher start. The FOMC begins its two day meeting today, and is set to issue its statement on Wednesday at 14:15 ET. Fed funds futures indicate a 76% chance of a 50 basis point cut, with the rest of the bets on a 25 basis point cut.
08:30 am : S&P futures vs fair value: +9.9. Nasdaq futures vs fair value: +9.5. Stock futures extended their gains, and then climb higher on a better than expected economic release. December Durable orders rose 5.2%, compared November’s revised reading of 0.5%. Economists expected a rise of 1.6%. Countrywide (CFC) reported a fourth quarter loss of $0.79 per share, $0.49 worse than the consensus estimate. The company issued a dividend of $0.15 on its common shares. It will not be holding a conference call to discuss its results due to its pending merger with Bank of America.
08:01 am : S&P futures vs fair value: +3.3. Nasdaq futures vs fair value: flat. Futures point to a flat to slightly higher open. Earnings reports have been mostly better than expected. 3M (MMM) topped estimates by two cents and reaffirmed its FY08 earnings guidance. Eli Lilly (LLY) and EMC (EMC) beat their estimates and provided reassuring FY08 guidance. American Express (AXP) met, but continues to be cautious in its 2008 outlook. VMware (VMW) beat expectations but is getting clipped in pre-market trading after guiding revenues slightly below the consensus estimate.
06:19 am : S&P futures vs fair value: +5.9. Nasdaq futures vs fair value: +3.3.
06:16 am : FTSE...5883.60...+94.70...+1.6%. DAX...6911.98...+93.13...+1.4%.
06:16 am : Nikkei...13478.86...+390.95...+3.0%. Hang Seng...24291.80...+238.19...+1.0%.
Monday, January 28, 2008
4:10 pm : On Monday, the major indices closed with significant gains, at their best levels of the session. The advance was broad-based with nine of the ten sectors posting a gain in excess of 1%. Financials showed significant strength, leading a late-day surge.
It was shaping up to be another negative day on Wall Street. Asian markets closed sharply lower on fear of a U.S. economic slowdown, and an economic reading on new home sales disappointed. The stock market managed to rebound into positive territory, though, as traders upped their bets for a rate cut and embraced several better than expected earnings reports.
On the economic front, December new home sales came in at a seasonally adjusted annual rate of 604,000 which is 4.7% less than last month's reading and is 40.7% less than last year's number. Economists expected sales to come in at 647,000.
The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
The number of new home sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders (+6.4%) shrugged off the negative report. The group is up 36.5% in the last five sessions.
Stocks fell to their session lows shortly after the release, but then recovered into positive territory as traders increased their bets on the size of a fed funds rate cut on Jan. 30.
Fed funds futures currently indicate an 88% chance of a 50 basis point rate cut, with a 25 basis point cut fully priced in. Prior to today's action, futures suggested a smaller 70% chance of a 50 basis point cut.
Of the 22 companies that reported earnings this morning, 12 beat expectations, three met, and seven missed. Some of the notable companies that topped estimates include Corning (GLW 23.10, +0.73), Halliburton (HAL 33.55, +0.46), McDonald's (MCD 51.07, -3.03) and Sysco (SYY 28.33, +0.72). McDonald's traded lower though, as traders were disappointed with its flat December U.S. same-store sales. Verizon (VZ 38.11, +0.35) met expectations.
All ten sectors advanced. The financial sector (+3.3%) posted the largest gains, as it stands to benefit from a lower fed funds rate. Beaten down telecoms (+2.6%) came in second. Tech (+0.4%) underperformed on a relative basis due to lack of leadership within the sector.DJ30 +176.72 NASDAQ +23.71 NQ100 +0.9% R2K +2.0% SP400 +2.3% SP500 +23.36 NASDAQ Dec/Adv/Vol 1052/1929/1.90 bln NYSE Dec/Adv/Vol 749/2421/1.35 bln
3:30 pm : The stock market continues to give up ground. Tech (-0.5%) is leading the retreat, which sent the Nasdaq briefly into negative territory. Apple (AAPL 128.27, -1.74) is playing a large role in the tech sector's reversal, as it went from a leader to a laggard.
After the close, 29 companies will be reporting earnings including Dow component American Express (AXP 46.70, +1.26). President Bush will address the nation is his annual State of the Union address at 9:00 P.M. ET. It is being reported that the state of the economy and the proposed fiscal stimulus package will be focal points.
Before the open tomorrow, 55 companies are reporting their earnings. Notable companies include 3M (MMM 76.90, +1.39), Dow Chemical (DOW 36.97, +0.66) and Countrywide Financial (CFC 5.94, -0.08).DJ30 +79.66 NASDAQ +3.15 SP500 +11.96 NASDAQ Dec/Adv/Vol 1159/1801/1.59 bln NYSE Dec/Adv/Vol 851/2306/1.12 bln
3:00 pm : Stocks retreat off their highs, but are still holding onto strong gains. The recent retreat was concentrated in the tech sector, which is now trading 0.1% lower.
Shares of Nymex Holdings (NMX 114.50, +7.34) are posting significant gains. CME Group (CME 619.81, -9.19) and Nymex confirmed rumors that they are in preliminary discussions regarding CME's potential acquisition of Nymex. The companies have agreed to a 30-day exclusive negotiating period.
In other acquisition news, shares of Alliance Data (ADS 42.10, -23.50) are sharply lower after the company indicated its acquisition by affiliates of The Blackstone Group may not happen. Blackstone had told Alliance that it does not anticipate the condition to close the merger related to obtaining approvals from the Office of the Comptroller of the Currency will be satisfied.DJ30 +82.75 NASDAQ +10.32 SP500 +12.57 NASDAQ Dec/Adv/Vol 1017/1927/1.44 bln NYSE Dec/Adv/Vol 766/2390/1.02 bln
2:25 pm : Stocks hit fresh intraday highs in recent trade. Support has been broad based, with eight of the ten sectors advancing more than 1%. Energy (+0.5%) and consumer staples (+0.9%) are the laggards. Financials (+2.1%) continue to pace this session's advance. In currency trading, the dollar is down 0.7% against the euro. Against a basket of leading world currencies, the dollar is down 0.57%. DJ30 +130.55 NASDAQ +19.93 SP500 +17.11 NASDAQ Dec/Adv/Vol 1077/1834/1.28 bln NYSE Dec/Adv/Vol 886/2237/914 mln
2:00 pm : Stocks continue to post sold gains, as the major indices trade near their session highs.
Market breadth leans bullish. Advancers outpace decliners by 5-to-2 on the NYSE, and by 5-to-3 on the Nasdaq. Volume is on the heavy side, as it has been of late.
Gold closed the session up $16.00 to $926.70 per ounce, slightly lower than its new all-time intraday high of $929.80 that was reached in earlier trade.DJ30 +95.11 NASDAQ +15.93 SP500 +12.97 NASDAQ Dec/Adv/Vol 1112/1773/1.18 bln NYSE Dec/Adv/Vol 888/2222/841 mln
1:30 pm : The S&P 500 and Dow climb to fresh session highs. The financial (+2.0%) and energy (+1.6%) sectors are lending support. Energy has extended its gains as crude oil (+0.2% to $90.91) recovers into positive territory. The Nasdaq is trailing, as tech (+0.5%) is a notable laggard.
72 of the 100 stocks in the Nasdaq 100 Index are posting a gain. Weakness in Microsoft (MSFT 32.57, -0.37), Google (GOOG 559.55, -6.85) and Yahoo! (YHOO 20.90, -1.04) are offsetting Apple's (AAPL 131.08, +1.10) advance.DJ30 +93.00 NASDAQ +14.13 SP500 +13.08 NASDAQ Dec/Adv/Vol 1168/1714/1.07 bln NYSE Dec/Adv/Vol 984/2089/747 mln
1:00 pm : The major indices regain some ground, with notable strength in financials (+1.6%).
351 stocks in the S&P 500 have advanced this session. Bank of America (BAC 40.64, +1.16), Merck (MRK 49.11, +1.32) and General Electric (GE 34.35, +0.35) are pacing the advance. The main laggards are McDonald's (MCD 50.58, -3.52), Microsoft (MSFT 32.48, -0.46) and Google (GOOG 559.36, -7.04). Two stocks in the index hit new 52-week highs, and two stocks hit 52-week lowsDJ30 +71.78 NASDAQ +7.03 SP500 +10.41 NASDAQ Dec/Adv/Vol 1277/1586/971 mln NYSE Dec/Adv/Vol 995/2054/679 mln
12:30 pm : The major indices are holding onto modest gains, but remain off their best levels. All ten sectors remain in positive territory.
Gold continues to climb higher, hitting a fresh all time high of $929.80 per ounce. Silver has hit multi-year highs, and is currently up 1.5% to $16.73 per ounce.DJ30 +46.34 NASDAQ +7.19 SP500 +7.46 NASDAQ Dec/Adv/Vol 1245/1587/886 mln NYSE Dec/Adv/Vol 1063/1976/624 mln
12:00 pm : After some choppy action in the early-going stocks are posting modest gains at midday. Several better than expected earnings reports and increased bets on a rate cut helped offset steep declines in Asian markets and worse than expected new home sales data.
Of the 22 companies that reported earnings this morning, 12 beat expectations, three met, and seven missed. Some of the notable companies that topped estimates include Corning (GLW 23.17, +0.80), Halliburton (HAL 33.51, +0.42), McDonald's (MCD 51.14, -2.96) and Sysco (SYY 27.97, +0.36). McDonald's is trading lower though, as traders were disappointed with its flat December U.S. same-store sales. Verizon (VZ 37.21, -0.55) met expectations.
On the economic front, December new home sales came in at a seasonally adjusted annual rate of 604,000 which is 4.7% less than last month's reading and is 40.7% less than last year's number. Economists expected sales to come in at 647,000.
The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
The number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders (+1.3%) shrugged off the negative report.
Stocks fell to their session lows shortly after the release, but then recovered into positive territory as traders increase their bets on the size of a Fed Funds rate cut on Jan. 30. Fed funds futures currently indicate an 88% chance of a 50 basis point rate cut, with a 25 basis point cut full priced in. Prior to today's action, futures suggested a smaller 70% chance of a 50 basis point cut, with a 25 basis point cut fully priced in.
Sharp declines in Asian markets on concerns of a U.S. economic slowdown weighed on U.S. stocks in pre-market trading. European markets were also lower, but pared most of their losses as U.S. stocks advanced.
All sectors are higher this session. Financials lead the way with a 1.6% advance. Consumer discretionary is underperforming on a relative basis with a 0.3% gain.DJ30 +59.10 NASDAQ +10.79 SP500 +10.01 NASDAQ Dec/Adv/Vol 1142/1656/767 mln NYSE Dec/Adv/Vol 1001/1987/521 mln
11:30 am : The major indices continue to post modest gains. U.S. Senate Democrats have added a jobless benefits extension and senior citizen rebates to the stimulus bill, according to Dow Jones.
Gold hit an all-time high of $924.80 per ounce before easing a bit. Gold is currently up 1.2% to $921.30 per ounce.DJ30 +58.29 NASDAQ +9.91 SP500 +9.81 NASDAQ Dec/Adv/Vol 1178/1578/650 mln NYSE Dec/Adv/Vol 1004/1967/433 mln
11:00 am : Stocks climb to their best levels of the session in a broad-based move. All ten sectors are in positive territory.
Financials (+1.6%) is leading the rebound with all 19 of its industry groups in the green. Industrial REITs is posting a 2.3% gain and regional banks is up 1.8%.
Even the energy sector (+1.0%) has rebounded into the green, despite a 1.4% slide in crude oil prices.DJ30 +53.36 NASDAQ +6.68 SP500 +7.61 NASDAQ Dec/Adv/Vol 1446/1271/508 mln NYSE Dec/Adv/Vol 1476/1445/322 mln
10:30 am : Stocks recover after falling to fresh session lows on the weak new home sales data. Utilities are leading the recovery effort with a gain of 1.3%. Meanwhile, telecom (-0.5%) pares most of its losses.
With regard to the new home sales data, the December seasonally adjusted annual rate of 604,000 is 4.7% less than last month's reading and is 40.7% less than last year's number. The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
The number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders are down 2.7% this session.DJ30 +6.91 NASDAQ -2.28 SP500 +2.60 NASDAQ Dec/Adv/Vol 1632/1008/342 mln NYSE Dec/Adv/Vol 1763/1100/205 mln
10:05 am : Just hitting the wires, the U.S. Dept. of Commerce said December new home sales fell to a seasonally adjusted annual rate of 604K. Economists were expecting sales to hold at 647K. November's reading was revised downward to 634K. Stocks had climbed back to the unchanged mark, but fell back into the red after the disappointing data.
Three of the ten sectors are trending higher. Utilities is leading the way with a 0.6% advance. Telecom is the main laggard with a 1.7% drop, as it continues its poor showing this year.DJ30 -74.87 NASDAQ -13.77 SP500 -6.56 NASDAQ Dec/Adv/Vol 1624/790/120 mln
09:40 am : The stock market dips into the red after opening on a slightly higher note. Foreign markets saw another day of steep declined on fears of U.S. economic slowdown. Japan's Nikkei fell 4.0% and Hong Kong's Hang Seng fell 4.3%. Goldman Sachs said in a report dated Jan. 25 that Japan is either already in a recession or is very likely to do so in the first quarter, according to SCMP.com.
Earnings news leaned bullish. McDonald's (MCD), Corning (GLW), Sysco (SYY) and Halliburton (HAL) topped earnings expectations. Verizon (VZ) came in-line with expectations. McDonald's is trading lower though, as investors were disappointed with its flat December U.S. same-store sales.DJ30 -53.57 NASDAQ -16.76 SP500 -4.97
09:13 am : S&P futures vs fair value: -1.3. Nasdaq futures vs fair value: -2.0.
08:59 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -3.0. Stock futures shed a few points and suggest a slightly lower open. The Dec. new home sales report is set for release at 10:00 ET. Economists are expected a reading of 645K.
08:30 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -4.5. S&P 500 futures are now pointing to a flat open as investors respond positively to this morning's earnings reports. McDonald’s (MCD) announced its dividends declared will now be paid on a quarterly basis. Nasdaq futures are pointing to a slightly lower open.
08:00 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -10.0. Futures indicate a lower start for stock market after foreign markets fell sharply on concerns of U.S. economic slowdown. Japan closed down 4.0% and Hong Kong ended its session 4.4% lower. Earnings reports have lifted futures off their worst levels. Verizon (VZ) reported earnings in-line with expectations. Corning (GLW) topped earnings expectations by one cent and issued first quarter earnings guidance above the consensus estimate. McDonald’s (MCD) beat expectations by $0.02.
06:18 am : S&P futures vs fair value: -8.1. Nasdaq futures vs fair value: -19.3.
06:18 am : FTSE...5761.40...-107.60...-1.8%. DAX...6709.27...-107.47...-1.6%.
06:18 am : Nikkei...13087.91...-541.25...-4.0%. Hang Seng...24053.61...-1068.76...-4.3%.
It was shaping up to be another negative day on Wall Street. Asian markets closed sharply lower on fear of a U.S. economic slowdown, and an economic reading on new home sales disappointed. The stock market managed to rebound into positive territory, though, as traders upped their bets for a rate cut and embraced several better than expected earnings reports.
On the economic front, December new home sales came in at a seasonally adjusted annual rate of 604,000 which is 4.7% less than last month's reading and is 40.7% less than last year's number. Economists expected sales to come in at 647,000.
The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
The number of new home sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders (+6.4%) shrugged off the negative report. The group is up 36.5% in the last five sessions.
Stocks fell to their session lows shortly after the release, but then recovered into positive territory as traders increased their bets on the size of a fed funds rate cut on Jan. 30.
Fed funds futures currently indicate an 88% chance of a 50 basis point rate cut, with a 25 basis point cut fully priced in. Prior to today's action, futures suggested a smaller 70% chance of a 50 basis point cut.
Of the 22 companies that reported earnings this morning, 12 beat expectations, three met, and seven missed. Some of the notable companies that topped estimates include Corning (GLW 23.10, +0.73), Halliburton (HAL 33.55, +0.46), McDonald's (MCD 51.07, -3.03) and Sysco (SYY 28.33, +0.72). McDonald's traded lower though, as traders were disappointed with its flat December U.S. same-store sales. Verizon (VZ 38.11, +0.35) met expectations.
All ten sectors advanced. The financial sector (+3.3%) posted the largest gains, as it stands to benefit from a lower fed funds rate. Beaten down telecoms (+2.6%) came in second. Tech (+0.4%) underperformed on a relative basis due to lack of leadership within the sector.DJ30 +176.72 NASDAQ +23.71 NQ100 +0.9% R2K +2.0% SP400 +2.3% SP500 +23.36 NASDAQ Dec/Adv/Vol 1052/1929/1.90 bln NYSE Dec/Adv/Vol 749/2421/1.35 bln
3:30 pm : The stock market continues to give up ground. Tech (-0.5%) is leading the retreat, which sent the Nasdaq briefly into negative territory. Apple (AAPL 128.27, -1.74) is playing a large role in the tech sector's reversal, as it went from a leader to a laggard.
After the close, 29 companies will be reporting earnings including Dow component American Express (AXP 46.70, +1.26). President Bush will address the nation is his annual State of the Union address at 9:00 P.M. ET. It is being reported that the state of the economy and the proposed fiscal stimulus package will be focal points.
Before the open tomorrow, 55 companies are reporting their earnings. Notable companies include 3M (MMM 76.90, +1.39), Dow Chemical (DOW 36.97, +0.66) and Countrywide Financial (CFC 5.94, -0.08).DJ30 +79.66 NASDAQ +3.15 SP500 +11.96 NASDAQ Dec/Adv/Vol 1159/1801/1.59 bln NYSE Dec/Adv/Vol 851/2306/1.12 bln
3:00 pm : Stocks retreat off their highs, but are still holding onto strong gains. The recent retreat was concentrated in the tech sector, which is now trading 0.1% lower.
Shares of Nymex Holdings (NMX 114.50, +7.34) are posting significant gains. CME Group (CME 619.81, -9.19) and Nymex confirmed rumors that they are in preliminary discussions regarding CME's potential acquisition of Nymex. The companies have agreed to a 30-day exclusive negotiating period.
In other acquisition news, shares of Alliance Data (ADS 42.10, -23.50) are sharply lower after the company indicated its acquisition by affiliates of The Blackstone Group may not happen. Blackstone had told Alliance that it does not anticipate the condition to close the merger related to obtaining approvals from the Office of the Comptroller of the Currency will be satisfied.DJ30 +82.75 NASDAQ +10.32 SP500 +12.57 NASDAQ Dec/Adv/Vol 1017/1927/1.44 bln NYSE Dec/Adv/Vol 766/2390/1.02 bln
2:25 pm : Stocks hit fresh intraday highs in recent trade. Support has been broad based, with eight of the ten sectors advancing more than 1%. Energy (+0.5%) and consumer staples (+0.9%) are the laggards. Financials (+2.1%) continue to pace this session's advance. In currency trading, the dollar is down 0.7% against the euro. Against a basket of leading world currencies, the dollar is down 0.57%. DJ30 +130.55 NASDAQ +19.93 SP500 +17.11 NASDAQ Dec/Adv/Vol 1077/1834/1.28 bln NYSE Dec/Adv/Vol 886/2237/914 mln
2:00 pm : Stocks continue to post sold gains, as the major indices trade near their session highs.
Market breadth leans bullish. Advancers outpace decliners by 5-to-2 on the NYSE, and by 5-to-3 on the Nasdaq. Volume is on the heavy side, as it has been of late.
Gold closed the session up $16.00 to $926.70 per ounce, slightly lower than its new all-time intraday high of $929.80 that was reached in earlier trade.DJ30 +95.11 NASDAQ +15.93 SP500 +12.97 NASDAQ Dec/Adv/Vol 1112/1773/1.18 bln NYSE Dec/Adv/Vol 888/2222/841 mln
1:30 pm : The S&P 500 and Dow climb to fresh session highs. The financial (+2.0%) and energy (+1.6%) sectors are lending support. Energy has extended its gains as crude oil (+0.2% to $90.91) recovers into positive territory. The Nasdaq is trailing, as tech (+0.5%) is a notable laggard.
72 of the 100 stocks in the Nasdaq 100 Index are posting a gain. Weakness in Microsoft (MSFT 32.57, -0.37), Google (GOOG 559.55, -6.85) and Yahoo! (YHOO 20.90, -1.04) are offsetting Apple's (AAPL 131.08, +1.10) advance.DJ30 +93.00 NASDAQ +14.13 SP500 +13.08 NASDAQ Dec/Adv/Vol 1168/1714/1.07 bln NYSE Dec/Adv/Vol 984/2089/747 mln
1:00 pm : The major indices regain some ground, with notable strength in financials (+1.6%).
351 stocks in the S&P 500 have advanced this session. Bank of America (BAC 40.64, +1.16), Merck (MRK 49.11, +1.32) and General Electric (GE 34.35, +0.35) are pacing the advance. The main laggards are McDonald's (MCD 50.58, -3.52), Microsoft (MSFT 32.48, -0.46) and Google (GOOG 559.36, -7.04). Two stocks in the index hit new 52-week highs, and two stocks hit 52-week lowsDJ30 +71.78 NASDAQ +7.03 SP500 +10.41 NASDAQ Dec/Adv/Vol 1277/1586/971 mln NYSE Dec/Adv/Vol 995/2054/679 mln
12:30 pm : The major indices are holding onto modest gains, but remain off their best levels. All ten sectors remain in positive territory.
Gold continues to climb higher, hitting a fresh all time high of $929.80 per ounce. Silver has hit multi-year highs, and is currently up 1.5% to $16.73 per ounce.DJ30 +46.34 NASDAQ +7.19 SP500 +7.46 NASDAQ Dec/Adv/Vol 1245/1587/886 mln NYSE Dec/Adv/Vol 1063/1976/624 mln
12:00 pm : After some choppy action in the early-going stocks are posting modest gains at midday. Several better than expected earnings reports and increased bets on a rate cut helped offset steep declines in Asian markets and worse than expected new home sales data.
Of the 22 companies that reported earnings this morning, 12 beat expectations, three met, and seven missed. Some of the notable companies that topped estimates include Corning (GLW 23.17, +0.80), Halliburton (HAL 33.51, +0.42), McDonald's (MCD 51.14, -2.96) and Sysco (SYY 27.97, +0.36). McDonald's is trading lower though, as traders were disappointed with its flat December U.S. same-store sales. Verizon (VZ 37.21, -0.55) met expectations.
On the economic front, December new home sales came in at a seasonally adjusted annual rate of 604,000 which is 4.7% less than last month's reading and is 40.7% less than last year's number. Economists expected sales to come in at 647,000.
The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
The number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders (+1.3%) shrugged off the negative report.
Stocks fell to their session lows shortly after the release, but then recovered into positive territory as traders increase their bets on the size of a Fed Funds rate cut on Jan. 30. Fed funds futures currently indicate an 88% chance of a 50 basis point rate cut, with a 25 basis point cut full priced in. Prior to today's action, futures suggested a smaller 70% chance of a 50 basis point cut, with a 25 basis point cut fully priced in.
Sharp declines in Asian markets on concerns of a U.S. economic slowdown weighed on U.S. stocks in pre-market trading. European markets were also lower, but pared most of their losses as U.S. stocks advanced.
All sectors are higher this session. Financials lead the way with a 1.6% advance. Consumer discretionary is underperforming on a relative basis with a 0.3% gain.DJ30 +59.10 NASDAQ +10.79 SP500 +10.01 NASDAQ Dec/Adv/Vol 1142/1656/767 mln NYSE Dec/Adv/Vol 1001/1987/521 mln
11:30 am : The major indices continue to post modest gains. U.S. Senate Democrats have added a jobless benefits extension and senior citizen rebates to the stimulus bill, according to Dow Jones.
Gold hit an all-time high of $924.80 per ounce before easing a bit. Gold is currently up 1.2% to $921.30 per ounce.DJ30 +58.29 NASDAQ +9.91 SP500 +9.81 NASDAQ Dec/Adv/Vol 1178/1578/650 mln NYSE Dec/Adv/Vol 1004/1967/433 mln
11:00 am : Stocks climb to their best levels of the session in a broad-based move. All ten sectors are in positive territory.
Financials (+1.6%) is leading the rebound with all 19 of its industry groups in the green. Industrial REITs is posting a 2.3% gain and regional banks is up 1.8%.
Even the energy sector (+1.0%) has rebounded into the green, despite a 1.4% slide in crude oil prices.DJ30 +53.36 NASDAQ +6.68 SP500 +7.61 NASDAQ Dec/Adv/Vol 1446/1271/508 mln NYSE Dec/Adv/Vol 1476/1445/322 mln
10:30 am : Stocks recover after falling to fresh session lows on the weak new home sales data. Utilities are leading the recovery effort with a gain of 1.3%. Meanwhile, telecom (-0.5%) pares most of its losses.
With regard to the new home sales data, the December seasonally adjusted annual rate of 604,000 is 4.7% less than last month's reading and is 40.7% less than last year's number. The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
The number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders are down 2.7% this session.DJ30 +6.91 NASDAQ -2.28 SP500 +2.60 NASDAQ Dec/Adv/Vol 1632/1008/342 mln NYSE Dec/Adv/Vol 1763/1100/205 mln
10:05 am : Just hitting the wires, the U.S. Dept. of Commerce said December new home sales fell to a seasonally adjusted annual rate of 604K. Economists were expecting sales to hold at 647K. November's reading was revised downward to 634K. Stocks had climbed back to the unchanged mark, but fell back into the red after the disappointing data.
Three of the ten sectors are trending higher. Utilities is leading the way with a 0.6% advance. Telecom is the main laggard with a 1.7% drop, as it continues its poor showing this year.DJ30 -74.87 NASDAQ -13.77 SP500 -6.56 NASDAQ Dec/Adv/Vol 1624/790/120 mln
09:40 am : The stock market dips into the red after opening on a slightly higher note. Foreign markets saw another day of steep declined on fears of U.S. economic slowdown. Japan's Nikkei fell 4.0% and Hong Kong's Hang Seng fell 4.3%. Goldman Sachs said in a report dated Jan. 25 that Japan is either already in a recession or is very likely to do so in the first quarter, according to SCMP.com.
Earnings news leaned bullish. McDonald's (MCD), Corning (GLW), Sysco (SYY) and Halliburton (HAL) topped earnings expectations. Verizon (VZ) came in-line with expectations. McDonald's is trading lower though, as investors were disappointed with its flat December U.S. same-store sales.DJ30 -53.57 NASDAQ -16.76 SP500 -4.97
09:13 am : S&P futures vs fair value: -1.3. Nasdaq futures vs fair value: -2.0.
08:59 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -3.0. Stock futures shed a few points and suggest a slightly lower open. The Dec. new home sales report is set for release at 10:00 ET. Economists are expected a reading of 645K.
08:30 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -4.5. S&P 500 futures are now pointing to a flat open as investors respond positively to this morning's earnings reports. McDonald’s (MCD) announced its dividends declared will now be paid on a quarterly basis. Nasdaq futures are pointing to a slightly lower open.
08:00 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -10.0. Futures indicate a lower start for stock market after foreign markets fell sharply on concerns of U.S. economic slowdown. Japan closed down 4.0% and Hong Kong ended its session 4.4% lower. Earnings reports have lifted futures off their worst levels. Verizon (VZ) reported earnings in-line with expectations. Corning (GLW) topped earnings expectations by one cent and issued first quarter earnings guidance above the consensus estimate. McDonald’s (MCD) beat expectations by $0.02.
06:18 am : S&P futures vs fair value: -8.1. Nasdaq futures vs fair value: -19.3.
06:18 am : FTSE...5761.40...-107.60...-1.8%. DAX...6709.27...-107.47...-1.6%.
06:18 am : Nikkei...13087.91...-541.25...-4.0%. Hang Seng...24053.61...-1068.76...-4.3%.
10 Top-Rated Stocks for the Long Term
1.L-3 Communications (LLL) - View IBD Stock Checkup
Earnings Stability Rating: 1. Analysts have raised EPS outlook for this high-tech Pentagon contractor. Five-year earnings growth rate: 23%.
2.Becton Dickinson & Co. (BDX) - View IBD Stock Checkup
Earnings Stability Rating: 1. Medical supplies developer is No. 2 in its group in pretax margin and return on equity. Five-year earnings growth rate: 16%.
3.Genzyme (GENZ) - View IBD Stock Checkup
Earnings Stability Rating: 3. Biotech large cap’s industry group is one of the best-performing over the past six months. Five-year earnings growth rate: 27%.
4.Covance (CVD) - View IBD Stock Checkup
Earnings Stability Rating: 3. Clinical trial provider’s earnings growth rate is expected to hold firm in 2008. Five-year earnings growth rate: 23%.
5.Amphenol (APH) - View IBD Stock Checkup
Earnings Stability Rating: 4. Communications cable maker expands its share repurchase program from 10 million shares to 20 million Five-year earnings growth rate: 32%.
6.Northern Trust (NTRS) - View IBD Stock Checkup
Earnings Stability Rating: 4. Chicago-based bank holding company is No. 1 in stock-price performance among stocks in its industry group. Five-year earnings growth rate: 15%.
7.Ametek (AME) - View IBD Stock Checkup
Earnings Stability Rating: 5. Test instrument maker’s sales growth slowed from 27% to 17% in 2007. %. Five-year earnings growth rate: 21%.
8.Stericycle (SRCL) - View IBD Stock Checkup
Earnings Stability Rating: 5. Medical-waste handler has beaten Street’s estimates on earnings for eight straight quarters. Five-year earnings growth rate: 21%.
9.Emerson Electric (EMR) - View IBD Stock Checkup
Earnings Stability Rating: 6. The diversified technology company has increased pretax margin for four consecutive years. Five-year earnings growth rate: 19%.
10.BlackRock (BLK) - View IBD Stock Checkup
Earnings Stability Rating: 9. Money management firm is No. 1 in IBD Earnings Per Share Rating among the 148 stocks in its industry group. Five-year earnings growth rate: 31%.
Earnings Stability Rating: 1. Analysts have raised EPS outlook for this high-tech Pentagon contractor. Five-year earnings growth rate: 23%.
2.Becton Dickinson & Co. (BDX) - View IBD Stock Checkup
Earnings Stability Rating: 1. Medical supplies developer is No. 2 in its group in pretax margin and return on equity. Five-year earnings growth rate: 16%.
3.Genzyme (GENZ) - View IBD Stock Checkup
Earnings Stability Rating: 3. Biotech large cap’s industry group is one of the best-performing over the past six months. Five-year earnings growth rate: 27%.
4.Covance (CVD) - View IBD Stock Checkup
Earnings Stability Rating: 3. Clinical trial provider’s earnings growth rate is expected to hold firm in 2008. Five-year earnings growth rate: 23%.
5.Amphenol (APH) - View IBD Stock Checkup
Earnings Stability Rating: 4. Communications cable maker expands its share repurchase program from 10 million shares to 20 million Five-year earnings growth rate: 32%.
6.Northern Trust (NTRS) - View IBD Stock Checkup
Earnings Stability Rating: 4. Chicago-based bank holding company is No. 1 in stock-price performance among stocks in its industry group. Five-year earnings growth rate: 15%.
7.Ametek (AME) - View IBD Stock Checkup
Earnings Stability Rating: 5. Test instrument maker’s sales growth slowed from 27% to 17% in 2007. %. Five-year earnings growth rate: 21%.
8.Stericycle (SRCL) - View IBD Stock Checkup
Earnings Stability Rating: 5. Medical-waste handler has beaten Street’s estimates on earnings for eight straight quarters. Five-year earnings growth rate: 21%.
9.Emerson Electric (EMR) - View IBD Stock Checkup
Earnings Stability Rating: 6. The diversified technology company has increased pretax margin for four consecutive years. Five-year earnings growth rate: 19%.
10.BlackRock (BLK) - View IBD Stock Checkup
Earnings Stability Rating: 9. Money management firm is No. 1 in IBD Earnings Per Share Rating among the 148 stocks in its industry group. Five-year earnings growth rate: 31%.
Latest Updates
11:00 am : Stocks climb to their best levels of the session in a broad-based move. All ten sectors are in positive territory.
Financials (+1.6%) is leading the rebound with all 19 of its industry groups in the green. Industrial REITs is posting a 2.3% gain and regional banks is up 1.8%.
Even the energy sector (+1.0%) has rebounded into the green, despite a 1.4% slide in crude oil prices.DJ30 +53.36 NASDAQ +6.68 SP500 +7.61 NASDAQ Dec/Adv/Vol 1446/1271/508 mln NYSE Dec/Adv/Vol 1476/1445/322 mln
10:30 am : Stocks recover after falling to fresh session lows on the weak new home sales data. Utilities are leading the recovery effort with a gain of 1.3%. Meanwhile, telecom (-0.5%) pares most of its losses.
With regard to the new home sales data, the December seasonally adjusted annual rate of 604,000 is 4.7% less than last month's reading and is 40.7% less than last year's number. The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
This number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders are down 2.7% this session.DJ30 +6.91 NASDAQ -2.28 SP500 +2.60 NASDAQ Dec/Adv/Vol 1632/1008/342 mln NYSE Dec/Adv/Vol 1763/1100/205 mln
10:05 am : Just hitting the wires, the U.S. Dept. of Commerce said December new home sales fell to a seasonally adjusted annual rate of 604K. Economists were expecting sales to hold at 647K. November's reading was revised downward to 634K. Stocks had climbed back to the unchanged mark, but fell back into the red after the disappointing data.
Three of the ten sectors are trending higher. Utilities is leading the way with a 0.6% advance. Telecom is the main laggard with a 1.7% drop, as it continues its poor showing this year.DJ30 -74.87 NASDAQ -13.77 SP500 -6.56 NASDAQ Dec/Adv/Vol 1624/790/120 mln
09:40 am : The stock market dips into the red after opening on a slightly higher note. Foreign markets saw another day of steep declined on fears of U.S. economic slowdown. Japan's Nikkei fell 4.0% and Hong Kong's Hang Seng fell 4.3%. Goldman Sachs said in a report dated Jan. 25 that Japan is either already in a recession or is very likely to do so in the first quarter, according to SCMP.com.
Earnings news leaned bullish. McDonald's (MCD), Corning (GLW), Sysco (SYY) and Halliburton (HAL) topped earnings expectations. Verizon (VZ) came in-line with expectations. McDonald's is trading lower though, as investors were disappointed with its flat December U.S. same-store sales.DJ30 -53.57 NASDAQ -16.76 SP500 -4.97
09:13 am : S&P futures vs fair value: -1.3. Nasdaq futures vs fair value: -2.0.
08:59 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -3.0. Stock futures shed a few points and suggest a slightly lower open. The Dec. new home sales report is set for release at 10:00 ET. Economists are expected a reading of 645K.
08:30 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -4.5. S&P 500 futures are now pointing to a flat open as investors respond positively to this morning's earnings
reports. McDonald’s (MCD) announced its dividends declared will now be paid on a quarterly basis. Nasdaq futures are pointing to a slightly lower open.
08:00 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -10.0. Futures indicate a lower start for stock market after foreign markets fell sharply on concerns of U.S. economic slowdown. Japan closed down 4.0% and Hong Kong ended its session 4.4% lower. Earnings reports have lifted futures off their worst levels. Verizon (VZ) reported earnings in-line with expectations. Corning (GLW) topped earnings expectations by one cent and issued first quarter earnings guidance above the consensus estimate. McDonald’s (MCD) beat expectations by $0.02.
06:18 am : S&P futures vs fair value: -8.1. Nasdaq futures vs fair value: -19.3.
06:18 am : FTSE...5761.40...-107.60...-1.8%. DAX...6709.27...-107.47...-1.6%.
06:18 am : Nikkei...13087.91...-541.25...-4.0%. Hang Seng...24053.61...-1068.76...-4.3
Financials (+1.6%) is leading the rebound with all 19 of its industry groups in the green. Industrial REITs is posting a 2.3% gain and regional banks is up 1.8%.
Even the energy sector (+1.0%) has rebounded into the green, despite a 1.4% slide in crude oil prices.DJ30 +53.36 NASDAQ +6.68 SP500 +7.61 NASDAQ Dec/Adv/Vol 1446/1271/508 mln NYSE Dec/Adv/Vol 1476/1445/322 mln
10:30 am : Stocks recover after falling to fresh session lows on the weak new home sales data. Utilities are leading the recovery effort with a gain of 1.3%. Meanwhile, telecom (-0.5%) pares most of its losses.
With regard to the new home sales data, the December seasonally adjusted annual rate of 604,000 is 4.7% less than last month's reading and is 40.7% less than last year's number. The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
This number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders are down 2.7% this session.DJ30 +6.91 NASDAQ -2.28 SP500 +2.60 NASDAQ Dec/Adv/Vol 1632/1008/342 mln NYSE Dec/Adv/Vol 1763/1100/205 mln
10:05 am : Just hitting the wires, the U.S. Dept. of Commerce said December new home sales fell to a seasonally adjusted annual rate of 604K. Economists were expecting sales to hold at 647K. November's reading was revised downward to 634K. Stocks had climbed back to the unchanged mark, but fell back into the red after the disappointing data.
Three of the ten sectors are trending higher. Utilities is leading the way with a 0.6% advance. Telecom is the main laggard with a 1.7% drop, as it continues its poor showing this year.DJ30 -74.87 NASDAQ -13.77 SP500 -6.56 NASDAQ Dec/Adv/Vol 1624/790/120 mln
09:40 am : The stock market dips into the red after opening on a slightly higher note. Foreign markets saw another day of steep declined on fears of U.S. economic slowdown. Japan's Nikkei fell 4.0% and Hong Kong's Hang Seng fell 4.3%. Goldman Sachs said in a report dated Jan. 25 that Japan is either already in a recession or is very likely to do so in the first quarter, according to SCMP.com.
Earnings news leaned bullish. McDonald's (MCD), Corning (GLW), Sysco (SYY) and Halliburton (HAL) topped earnings expectations. Verizon (VZ) came in-line with expectations. McDonald's is trading lower though, as investors were disappointed with its flat December U.S. same-store sales.DJ30 -53.57 NASDAQ -16.76 SP500 -4.97
09:13 am : S&P futures vs fair value: -1.3. Nasdaq futures vs fair value: -2.0.
08:59 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -3.0. Stock futures shed a few points and suggest a slightly lower open. The Dec. new home sales report is set for release at 10:00 ET. Economists are expected a reading of 645K.
08:30 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -4.5. S&P 500 futures are now pointing to a flat open as investors respond positively to this morning's earnings
reports. McDonald’s (MCD) announced its dividends declared will now be paid on a quarterly basis. Nasdaq futures are pointing to a slightly lower open.
08:00 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -10.0. Futures indicate a lower start for stock market after foreign markets fell sharply on concerns of U.S. economic slowdown. Japan closed down 4.0% and Hong Kong ended its session 4.4% lower. Earnings reports have lifted futures off their worst levels. Verizon (VZ) reported earnings in-line with expectations. Corning (GLW) topped earnings expectations by one cent and issued first quarter earnings guidance above the consensus estimate. McDonald’s (MCD) beat expectations by $0.02.
06:18 am : S&P futures vs fair value: -8.1. Nasdaq futures vs fair value: -19.3.
06:18 am : FTSE...5761.40...-107.60...-1.8%. DAX...6709.27...-107.47...-1.6%.
06:18 am : Nikkei...13087.91...-541.25...-4.0%. Hang Seng...24053.61...-1068.76...-4.3
Sunday, January 27, 2008
STOCKS TO WATCH
Among the companies whose shares are expected to see active trade in Monday's session are Verizon, McDonald's, Corning and Meritage Homes.
Verizon Communications (VZ: 37.76, -0.47, -1.2%) is projected to report earnings of 62 cents a share in the fourth quarter, according to analysts polled by Thomson Financial.
McDonald's Corp. (MCD:54.10, +0.10, +0.2%) is expected to post fourth-quarter earnings of 71 cents a share.
Corning Inc. (GLW: 22.37, +0.17, +0.8%) is forecast to post earnings of 39 cents a share in the fourth quarter.
Meritage Homes Corp. (MTH:10.84, -0.03, -0.3%) is expected to report a loss of $3.52 a share in the fourth quarter.
Tyson Foods Inc. (TSN: 13.26, -0.23, -1.7%) is estimated to post earnings of 4 cents a share in the fiscal first quarter.
Albemarle Corp. (ALB: 37.30, +3.15, +9.2%) is likely to post earnings of 59 cents a share in the fourth quarter.
Black & Decker Corp. (BDK: 69.98, -0.25, -0.4%) is forecast to post earnings of $1.03 a share in the fourth quarter.
Sysco Corp. (SYY:27.61, +0.07, +0.3%) is tipped to report earnings of 43 cents a share in the fiscal second quarter.
VMware Inc. (VMW:80.55, +0.35, +0.4%) is expected to post earnings of 24 cents a share in the fourth quarter.
Crane Co. (CR: 36.35, +0.33, +0.9%) is projected to report earnings of 69 cents a share in the fourth quarter.
Halliburton Co. (HAL: 33.09, +0.72, +2.2%) is estimated to post fourth-quarter earnings of 69 cents a share in the fourth quarter.
Graco Inc. (GGG:34.42, +0.50, +1.5%) is forecast to report fourth-quarter earnings of 57 cents a share.
Rohm and Haas Co. (ROH: 49.90, +0.78, +1.6%) is expected to post fourth-quarter earnings of 78 cents a share.
SanDisk Corp. (SNDK: 25.62, -1.13, -4.2%) is estimated to post earnings of 64 cents a share in the fourth quarter.
Amylin Pharmaceuticals Inc. (AMLN:32.46, -0.85, -2.5%) is projected to post a loss of 44 cents a share in the fourth quarter.
Unum Group (UNM: 20.58, -0.20, -1.0%) is forecast to post earnings of 54 cents a share in the fourth quarter.
Stanley Works (SWK: 46.58, +0.52, +1.1%) is expected to report fourth-quarter earnings of $1.10 a share.
YRC Worldwide Inc. (YRCW:18.86, +0.86, +4.8%) is estimated to post fourth-quarter earnings of 54 cents a share.
Smurfit-Stone Container Corp. (SSCC: 8.83, +0.15, +1.7%) is forecast to post earnings of 8 cents a share in the fourth quarter.
Zoran Corp. (ZRAN) is expected to post earnings of 32 cents a share in the fourth quarter.
The Hanover Insurance Group (THG) is projected to post earnings of $1.12 a share in the fourth quarter.
Steel Dynamics Inc. (STLD:) is tipped to report fourth-quarter earnings of 98 cents a share.
Airgas Inc. (ARG) is estimated to report fiscal third-quarter earnings of 65 cents a share.
Con-Way Inc. (CNW) is expected to post fourth-quarter earnings of 82 cents a share.
After Friday's closing bell, Tyson Foods Inc. (TSN) said it will cease beef slaughter operations at its Emporia, Kansas, beef plant in the next few weeks, resulting in the elimination of 1,500 of 2,400 jobs. Affected workers will continue to be paid and receive benefits for 60 days, and the company will work with affected employees to discuss other employment opportunities within the company.
Watch list
Baxter International (BAX) issued an "urgent" recall of batches of its blood-thinner heparin due to reports they have caused severe allergic reactions in some recipients. In particular, Baxter is recalling injectable formulations of heparin sodium in 1000 units/mL and 30mL multi-vial doses.
Delphi Corp. (DPHIQ) said a federal bankruptcy judge confirmed the company's amended reorganization plan after ruling the company met all of the statutory requirements. The auto parts supplier said it plans to emerge from bankruptcy during the calendar quarter following the syndication and closing of about $6.1 billion of exit financing facilities.
FedEx (FDX) reportedly is in talks to buy all or part of Deutsche Post's DHL delivery business in the U.S. in a deal that would help it challenge larger rival UPS (UPS) . Seeking to cut losses in the hyper-competitive domestic fast delivery business, Deutsche Post may move to trim its DHL business in the United States without abandoning it completely, according to published reports on Friday.
Merck & Co. (MRK) received a not-approvable letter from the Food and Drug Administration in response to its application seeking approval for over-the-counter Mevacor 20 mg, the drug company said. The FDA indicated in its letter that it would require a revised label and additional data from Merck in order for marketing approval.
Short interest in 3,214 Nasdaq (NDAQ) securities totaled 8.69 billion shares at the end of the Jan. 15 settlement date, compared with 8.11 billion shares at the end of the Dec. 31 settlement date, the exchange said. Short interest in 2,707 Nasdaq Global Market securities totaled 8.49 billion shares at the end of the Jan. 15 settlement date, up from 7.93 billion shares in 2,697 issues.
Wellcare Health Plans Inc. (WCG:) named Charles Berg executive chairman and Heath Schiesser as president and chief executive officer, effective immediately, after three executives resigned from their positions. The managed-care services provider said the shakeup is in the "best long-term interest of the company."
Verizon Communications (VZ: 37.76, -0.47, -1.2%) is projected to report earnings of 62 cents a share in the fourth quarter, according to analysts polled by Thomson Financial.
McDonald's Corp. (MCD:54.10, +0.10, +0.2%) is expected to post fourth-quarter earnings of 71 cents a share.
Corning Inc. (GLW: 22.37, +0.17, +0.8%) is forecast to post earnings of 39 cents a share in the fourth quarter.
Meritage Homes Corp. (MTH:10.84, -0.03, -0.3%) is expected to report a loss of $3.52 a share in the fourth quarter.
Tyson Foods Inc. (TSN: 13.26, -0.23, -1.7%) is estimated to post earnings of 4 cents a share in the fiscal first quarter.
Albemarle Corp. (ALB: 37.30, +3.15, +9.2%) is likely to post earnings of 59 cents a share in the fourth quarter.
Black & Decker Corp. (BDK: 69.98, -0.25, -0.4%) is forecast to post earnings of $1.03 a share in the fourth quarter.
Sysco Corp. (SYY:27.61, +0.07, +0.3%) is tipped to report earnings of 43 cents a share in the fiscal second quarter.
VMware Inc. (VMW:80.55, +0.35, +0.4%) is expected to post earnings of 24 cents a share in the fourth quarter.
Crane Co. (CR: 36.35, +0.33, +0.9%) is projected to report earnings of 69 cents a share in the fourth quarter.
Halliburton Co. (HAL: 33.09, +0.72, +2.2%) is estimated to post fourth-quarter earnings of 69 cents a share in the fourth quarter.
Graco Inc. (GGG:34.42, +0.50, +1.5%) is forecast to report fourth-quarter earnings of 57 cents a share.
Rohm and Haas Co. (ROH: 49.90, +0.78, +1.6%) is expected to post fourth-quarter earnings of 78 cents a share.
SanDisk Corp. (SNDK: 25.62, -1.13, -4.2%) is estimated to post earnings of 64 cents a share in the fourth quarter.
Amylin Pharmaceuticals Inc. (AMLN:32.46, -0.85, -2.5%) is projected to post a loss of 44 cents a share in the fourth quarter.
Unum Group (UNM: 20.58, -0.20, -1.0%) is forecast to post earnings of 54 cents a share in the fourth quarter.
Stanley Works (SWK: 46.58, +0.52, +1.1%) is expected to report fourth-quarter earnings of $1.10 a share.
YRC Worldwide Inc. (YRCW:18.86, +0.86, +4.8%) is estimated to post fourth-quarter earnings of 54 cents a share.
Smurfit-Stone Container Corp. (SSCC: 8.83, +0.15, +1.7%) is forecast to post earnings of 8 cents a share in the fourth quarter.
Zoran Corp. (ZRAN) is expected to post earnings of 32 cents a share in the fourth quarter.
The Hanover Insurance Group (THG) is projected to post earnings of $1.12 a share in the fourth quarter.
Steel Dynamics Inc. (STLD:) is tipped to report fourth-quarter earnings of 98 cents a share.
Airgas Inc. (ARG) is estimated to report fiscal third-quarter earnings of 65 cents a share.
Con-Way Inc. (CNW) is expected to post fourth-quarter earnings of 82 cents a share.
After Friday's closing bell, Tyson Foods Inc. (TSN) said it will cease beef slaughter operations at its Emporia, Kansas, beef plant in the next few weeks, resulting in the elimination of 1,500 of 2,400 jobs. Affected workers will continue to be paid and receive benefits for 60 days, and the company will work with affected employees to discuss other employment opportunities within the company.
Watch list
Baxter International (BAX) issued an "urgent" recall of batches of its blood-thinner heparin due to reports they have caused severe allergic reactions in some recipients. In particular, Baxter is recalling injectable formulations of heparin sodium in 1000 units/mL and 30mL multi-vial doses.
Delphi Corp. (DPHIQ) said a federal bankruptcy judge confirmed the company's amended reorganization plan after ruling the company met all of the statutory requirements. The auto parts supplier said it plans to emerge from bankruptcy during the calendar quarter following the syndication and closing of about $6.1 billion of exit financing facilities.
FedEx (FDX) reportedly is in talks to buy all or part of Deutsche Post's DHL delivery business in the U.S. in a deal that would help it challenge larger rival UPS (UPS) . Seeking to cut losses in the hyper-competitive domestic fast delivery business, Deutsche Post may move to trim its DHL business in the United States without abandoning it completely, according to published reports on Friday.
Merck & Co. (MRK) received a not-approvable letter from the Food and Drug Administration in response to its application seeking approval for over-the-counter Mevacor 20 mg, the drug company said. The FDA indicated in its letter that it would require a revised label and additional data from Merck in order for marketing approval.
Short interest in 3,214 Nasdaq (NDAQ) securities totaled 8.69 billion shares at the end of the Jan. 15 settlement date, compared with 8.11 billion shares at the end of the Dec. 31 settlement date, the exchange said. Short interest in 2,707 Nasdaq Global Market securities totaled 8.49 billion shares at the end of the Jan. 15 settlement date, up from 7.93 billion shares in 2,697 issues.
Wellcare Health Plans Inc. (WCG:) named Charles Berg executive chairman and Heath Schiesser as president and chief executive officer, effective immediately, after three executives resigned from their positions. The managed-care services provider said the shakeup is in the "best long-term interest of the company."
Chavez Urges Latin American Allies to Begin Withdrawing Billions of Dollars From US Banks
CARACAS, Venezuela (AP) -- Venezuelan President Hugo Chavez urged his Latin American allies on Saturday to begin withdrawing billions of dollars in international reserves from U.S. banks, warning of a looming U.S. economic crisis.
Chavez made the suggestion as he hosted a summit aimed at boosting Latin American integration and countering U.S. influence.
"We should start to bring our reserves here," Chavez said. "Why does that money have to be in the north? ... You can't put all your eggs in one basket."
To help pool resources within the region, Chavez and other leaders launched a new development bank at the summit of the Bolivarian Alternative for the Nations of Our America, or ALBA.
The left-leaning regional trade alliance supported by Chavez is intended to offer an alternative, socialist path to integration while snubbing U.S.-backed free-trade deals.
Chavez noted that Secretary of State Condoleezza Rice visited Colombia in recent days, saying "that has to do with this summit."
"The empire doesn't accept alternatives," Chavez told the gathering, attended by the presidents of Bolivia and Nicaragua, Cuban Vice President Carlos Lage, and other leaders.
Chavez warned that U.S. "imperialism is entering into a crisis that can affect all of us" and said Latin America "will save itself alone."
Rice left Colombia on Friday after a trip aimed at reviving a free trade deal that has stalled in the U.S. Congress. She sidestepped an opportunity to confront Chavez, who accused Colombia and the United States of plotting "military aggression" against Venezuela.
Chavez took up the issue again on Saturday, saying, "I warn the world of the following: The U.S. empire is creating the conditions to generate an armed conflict between Colombia and Venezuela."
Formerly cordial relations between the two nations have been tense since November, when Colombia's U.S.-allied president, Alvaro Uribe, said Chavez was no longer welcome to continue mediating a hostages-for-prisoners swap with Colombia's leftist rebels.
Nicaraguan President Daniel Ortega backed Chavez in the dispute at the summit, saying "the heating up (of tensions) toward Venezuela is toward the ALBA" as a whole.
He also joined Chavez in his criticism of U.S.-style capitalism, saying "the dictatorship of global capitalism ... has lost control." Three days earlier, Ortega had shouted "Long live the U.S. government" as he inaugurated an American-financed section of highway in his country.
The leaders signed a series of accords at the end of the summit pledging cooperation in areas from energy to agriculture, plus a document denouncing "the warlike attitude of the U.S. government and its attacks against our governments."
A spokeswoman for the U.S. Embassy in Caracas rejected that characterization. "A door is always open to dialogue and cooperation on issues of mutual concern," Robin Holzhauer said.
Chavez welcomed the Caribbean island of Dominica into the ALBA -- an acronym that means "dawn" in Spanish -- joining Nicaragua, Bolivia and Cuba.
Chavez said a new fund created by Venezuela and Iran to support projects in third countries would have links to the ALBA Bank.
Chavez made the suggestion as he hosted a summit aimed at boosting Latin American integration and countering U.S. influence.
"We should start to bring our reserves here," Chavez said. "Why does that money have to be in the north? ... You can't put all your eggs in one basket."
To help pool resources within the region, Chavez and other leaders launched a new development bank at the summit of the Bolivarian Alternative for the Nations of Our America, or ALBA.
The left-leaning regional trade alliance supported by Chavez is intended to offer an alternative, socialist path to integration while snubbing U.S.-backed free-trade deals.
Chavez noted that Secretary of State Condoleezza Rice visited Colombia in recent days, saying "that has to do with this summit."
"The empire doesn't accept alternatives," Chavez told the gathering, attended by the presidents of Bolivia and Nicaragua, Cuban Vice President Carlos Lage, and other leaders.
Chavez warned that U.S. "imperialism is entering into a crisis that can affect all of us" and said Latin America "will save itself alone."
Rice left Colombia on Friday after a trip aimed at reviving a free trade deal that has stalled in the U.S. Congress. She sidestepped an opportunity to confront Chavez, who accused Colombia and the United States of plotting "military aggression" against Venezuela.
Chavez took up the issue again on Saturday, saying, "I warn the world of the following: The U.S. empire is creating the conditions to generate an armed conflict between Colombia and Venezuela."
Formerly cordial relations between the two nations have been tense since November, when Colombia's U.S.-allied president, Alvaro Uribe, said Chavez was no longer welcome to continue mediating a hostages-for-prisoners swap with Colombia's leftist rebels.
Nicaraguan President Daniel Ortega backed Chavez in the dispute at the summit, saying "the heating up (of tensions) toward Venezuela is toward the ALBA" as a whole.
He also joined Chavez in his criticism of U.S.-style capitalism, saying "the dictatorship of global capitalism ... has lost control." Three days earlier, Ortega had shouted "Long live the U.S. government" as he inaugurated an American-financed section of highway in his country.
The leaders signed a series of accords at the end of the summit pledging cooperation in areas from energy to agriculture, plus a document denouncing "the warlike attitude of the U.S. government and its attacks against our governments."
A spokeswoman for the U.S. Embassy in Caracas rejected that characterization. "A door is always open to dialogue and cooperation on issues of mutual concern," Robin Holzhauer said.
Chavez welcomed the Caribbean island of Dominica into the ALBA -- an acronym that means "dawn" in Spanish -- joining Nicaragua, Bolivia and Cuba.
Chavez said a new fund created by Venezuela and Iran to support projects in third countries would have links to the ALBA Bank.
Saturday, January 26, 2008
Oil Futures Jump Back Above $90 a Barrel
Oil futures jumped back above $90 a barrel Friday, adding to the previous session's sharp gains on a view that the recession worries that pulled prices lower in recent weeks may have been overblown.
At the pump, meanwhile, gas prices fell below $3 a gallon for the first time in weeks.
Energy investors were heartened by recent moves by the Federal Reserve and Congress to shore up the economy, which could prevent oil demand from slowing as much as many had feared.
"This week's emergency interest rate cut by the Fed and the economic stimulus plan proffered by Congress appear to have, for now, stemmed fears of a looming recession in the U.S.," said Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC, of Stamford, Conn., in a research .
Word that Chinese oil demand grew by 6.4 percent in December, the highest rate in months, contributed to oil's advance.
Concerns that demand from the booming Chinese and Indian economies is outstripping global oil supplies helped push oil to records above $100 earlier this month.
Light, sweet crude for March delivery rose $1.30 to settle at $90.71 on the New York Mercantile Exchange after rising as high as $91.38. Oil futures last closed above $90 last Friday.
While investors believe the government's $150 billion stimulus plan and the Fed's rate cuts will stave off a serious economic slowdown, rate cuts also tend to weaken the dollar, giving investors another reason to buy oil futures. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.
"When (investors in foreign) countries go to buy oil, they're buying it on sale," said James Cordier, president of Liberty Trading Corp., in Tampa, Fla.
Many analysts believe the weakening dollar helped draw speculative investors into oil markets this fall and winter, driving oil prices above the $100 mark.
While oil prices are on the rebound, gas prices slid 0.8 cent Friday to a national average of $2.998 a gallon, their first dip below $3 in weeks. Retail prices tend to lag the futures market, meaning that if oil prices continue to rise, gas prices may halt their decline and move back above $3.
Other energy futures also rose Friday. February heating oil futures jumped 4.28 cents to settle at $2.5191 a gallon on the Nymex while February gasoline futures added 3.54 cents to settle at $2.3182 a gallon. Heating oil and gasoline prices were supported by news that Valero Energy Corp.'s 255,000 barrel a day refinery in Aruba was shut down due to a fire.
February natural gas futures rose 18.1 cents to settle at $7.983 per 1,000 cubic feet.
In London, March Brent crude rose $1.83 to settle at $90.90 a barrel Friday on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest and Thomas Hogue in Bangkok, Thailand, contributed to this report.
At the pump, meanwhile, gas prices fell below $3 a gallon for the first time in weeks.
Energy investors were heartened by recent moves by the Federal Reserve and Congress to shore up the economy, which could prevent oil demand from slowing as much as many had feared.
"This week's emergency interest rate cut by the Fed and the economic stimulus plan proffered by Congress appear to have, for now, stemmed fears of a looming recession in the U.S.," said Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC, of Stamford, Conn., in a research .
Word that Chinese oil demand grew by 6.4 percent in December, the highest rate in months, contributed to oil's advance.
Concerns that demand from the booming Chinese and Indian economies is outstripping global oil supplies helped push oil to records above $100 earlier this month.
Light, sweet crude for March delivery rose $1.30 to settle at $90.71 on the New York Mercantile Exchange after rising as high as $91.38. Oil futures last closed above $90 last Friday.
While investors believe the government's $150 billion stimulus plan and the Fed's rate cuts will stave off a serious economic slowdown, rate cuts also tend to weaken the dollar, giving investors another reason to buy oil futures. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.
"When (investors in foreign) countries go to buy oil, they're buying it on sale," said James Cordier, president of Liberty Trading Corp., in Tampa, Fla.
Many analysts believe the weakening dollar helped draw speculative investors into oil markets this fall and winter, driving oil prices above the $100 mark.
While oil prices are on the rebound, gas prices slid 0.8 cent Friday to a national average of $2.998 a gallon, their first dip below $3 in weeks. Retail prices tend to lag the futures market, meaning that if oil prices continue to rise, gas prices may halt their decline and move back above $3.
Other energy futures also rose Friday. February heating oil futures jumped 4.28 cents to settle at $2.5191 a gallon on the Nymex while February gasoline futures added 3.54 cents to settle at $2.3182 a gallon. Heating oil and gasoline prices were supported by news that Valero Energy Corp.'s 255,000 barrel a day refinery in Aruba was shut down due to a fire.
February natural gas futures rose 18.1 cents to settle at $7.983 per 1,000 cubic feet.
In London, March Brent crude rose $1.83 to settle at $90.90 a barrel Friday on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest and Thomas Hogue in Bangkok, Thailand, contributed to this report.
Friday, January 25, 2008
Latest Updates
4:25 pm : Microsoft (MSFT 32.94, -0.31) gave the market everything it was looking for when it reported its fiscal second quarter results after Thursday's close. The software giant topped expectations and raised its revenue and earnings per share guidance for the fiscal year, which ends in June, noting broad-based strength in its business.
The market chewed up the report, liking the taste of it in early trading, and then promptly spit it back out, hitting both Microsoft and the broader averages with losses to close a remarkable week of trading.
The inability of Microsoft's stock to hold its opening gains, which were as much as 5.3%, spurred a disappointment trade that then took most stocks lower on the day. Dow components Caterpillar (CAT 65.93, +0.68) and Honeywell (HON 58.25, +2.05) managed to buck the trend after sharing reassuring earnings news.
Selling efforts were compounded by renewed concerns surrounding the likelihood of further credit losses for the financial sector, worries that a rescue plan of some sort for the bond insurers was no sure thing, and rumors that a hedge fund was in trouble.
On top of that, Merck (MRK 47.79, -1.77) and fellow drug company Schering-Plough (SGP 19.02, -1.15) got hit on a seemingly benign announcement from the FDA that it is still awaiting more results on the study of the efficacy of their joint cholesterol drug, Vytorin, and that an eventual review could take up to six months. Both stocks made up some lost ground, but still finished lower and acted as a weight on the market.
Strikingly, the financial (-2.5%) and consumer discretionary (-2.0%) sectors, which were the leaders in the rebound off Wednesday's low, were the hardest hit areas Friday. Although both areas were prime for some profit-taking, their weakness Friday is apt to stir concerns for some participants that the rally try this week will be short-lived.
A late-day report that New York officials sued Countrywide's (CFC 6.02, -0.09) underwriters for fraud triggered a final wave of selling interest that left the major indices near their lows of the session when the closing bell rang.
Every sector ended the day with a loss, although the materials sector (-0.2%) held up the best, aided in part by strength in certain gold stocks like Newmont Mining (NEM 53.26, +0.29) which followed reports of a shutdown of some South African mines due to a power shortage. Gold futures closed the week up 0.9% at a new high of $919.10 per troy ounce.
Weakness in the stock market once again benefited the Treasury market. The 10-year note jumped more than a point and its yield fell back to 3.56%.DJ30 -171.44 NASDAQ -34.72 NQ100 -2.1% R2K -0.6% SP400 -0.9% SP500 -21.46 NASDAQ Dec/Adv/Vol 1611/1394/2.64 bln NYSE Dec/Adv/Vol 1807/1365/1.88 bln
3:30 pm : The major indices pare a portion of their losses in a broad-based move. The stock market is now trading at its best level since 1:00 ET. It has been a volatile week of trading, although the S&P is set end the week near the unchanged mark.
The following is the best and worst performing industry groups of the week as we head into a final half hour of trading. Best: 1. Homebuilding (+30.9%) 2. Coal & Consumable Fuels (+17.1%) 3. Apparel & Accessories (+16.8%). Worst: 1. Wireless services (-14.3%) 2. Health Care Services (-9.7%) 3. Managed Healthcare (-8.6%)DJ30 -114.08 NASDAQ -21.79 SP500 -15.01 NASDAQ Dec/Adv/Vol 1716/1279/2.13 bln NYSE Dec/Adv/Vol 1870/1270/1.40 bln
3:00 pm : The major indices are trading near their session lows. Buyers remain on the sidelines after being disappointed that the stock market was unable to hold onto its opening gains. At current levels, the S&P and Nasdaq are set to end the week with a modest loss, while the Dow is set to end slightly higher.
There have been quite a few headlines crossing the wires regarding bond insurers. Standard & Poor's analysts said bond insurers must resolve business viability and other issues in order to retain their "AAA" ratings, according to Reuters. Reuters also reports that a bond insurers group said the industry is "financially strong" and is intent on defending its top credit ratings.DJ30 -159.16 NASDAQ -29.13 SP500 -20.01 NASDAQ Dec/Adv/Vol 1583/1388/1.99 bln NYSE Dec/Adv/Vol 1818/1318/1.27 bln
2:35 pm : The stock market is off its worst level, but continues to trade with a substantial loss.
Barclays Capital said banks may need to raise another $143 billion in capital if bond insurers get their credit ratings cut, according to Bloomberg.com. The article states banks have already raised $72 billion. If bond insurers get their ratings cut, it will lower the value of the $2.4 trillion in bonds they insure. Bond insurer Ambac (ABK 11.61, +0.28) is posting a slight gain on reports that it may be bought by vulture fund investor Wilbur Ross.
Merck (MRK 47.41, -2.15) and Schering-Plough (SGP 18.53, -1.64) just came under selling pressure after the FDA said the Vytorin study will take six months to review.DJ30 -133.80 NASDAQ -21.43 SP500 -17.56 NASDAQ Dec/Adv/Vol 1501/1426/1.85 bln NYSE Dec/Adv/Vol 1808/1328/1.18 bln
2:00 pm : The stock market comes under a fresh wave of selling pressure, sending it to new intraday lows. Meanwhile, Treasuries contine to rally as stocks weaken. The 10-year note is up 32 ticks, pushing its yield down to 3.58%.
All sectors are trading in the red. The financial sector (-2.7%) has extended its losses. Consumer discretionary (-1.9%) is the second worst perform sector.
Tech (-1.5%) is also posting a large loss as Apple (AAPL 131.40, -4.20) again comes under selling pressure. The stock is down 34% in 2008 compared to the tech sector's 14% decline.DJ30 -145.99 NASDAQ -26.67 SP500 -19.48 NASDAQ Dec/Adv/Vol 1509/1417/1.67 bln NYSE Dec/Adv/Vol 1619/1489/1.04 bln
1:30 pm : Stocks are trading near their recently reached session lows. The materials sector (+0.1%) has recovered into the green, although it remains well off its session high.
Financials have been hit the hardest, now down 1.9%. 18 of its 19 industry groups are lower. Thrifts & mortgages is the main laggard with a 4.2% loss. Investment banks & brokerages comes in as the second worst-performing group with a 3% loss. Residential REITs are managing to hold onto a 1.4% gain.DJ30 -107.11 NASDAQ -13.79 SP500 -13.70 NASDAQ Dec/Adv/Vol 1251/1648/1.53 bln NYSE Dec/Adv/Vol 1548/1532/951
1:00 pm : The major indices fall to fresh lows. All ten of the sectors are now in negative territory. In the past half-hour, Standard and Poor's lowered its ratings on 93 classes of mortgage pass-through certificates from 25 different U.S. subprime residential mortgage-backed securities transactions from nine issuers.
Meanwhile, disappointment that Microsoft (MSFT 33.21, -0.04) has slipped into negative territory is adding to the selling pressure.DJ30 -92.75 NASDAQ -9.98 SP500 -11.92 NASDAQ Dec/Adv/Vol 1094/1790/1.38 bln NYSE Dec/Adv/Vol 1143/1923/843 mln
12:35 pm : Stocks are fluctuating around the unchanged mark. The materials sector (+1.1%) continues to provide leadership.
Despite the market's decline, market breadth remains positive due to the outperformance of small-cap and mid-cap stocks. The Russell 2000 Index is up 1.1% and the S&P 400 Mid-Cap Index is up 0.5%. Advancers outpace decliners by 9-to-5 on the NYSE and by 8-to-5 on the Nasdaq.DJ30 -22.60 NASDAQ +6.05 SP500 -3.29 NASDAQ Dec/Adv/Vol 1053/1761/1.21 bln NYSE Dec/Adv/Vol 1174/1884/738 mln
12:00 pm : Stocks opened with significant gains, lifted by strong earnings and outlook from a tech giant and a report that a struggling bond insurer may be acquired. The stock market then drifted lower as investors remain uneasy and traders take some profits. At midday, stocks are off their lows as they trade at the unchanged mark.
Microsoft (MSFT +33.51, +0.26) fell off its highs and is now only posting a small gain despite the company's strong earnings report. Microsoft reported a second quarter net income of $0.50 per share, 92% higher than its $0.26 per share earnings in the year ago period. The company's results also topped the consensus estimate that called for a profit of $0.46 per share. Microsoft raised its outlook for the full year, estimating earnings of $1.85 to $1.88 per share, beating analysts' forecast of $1.81 per share.
There were a large number of companies that reported earnings, and most were better than expected. Dow components Honeywell (HON 59.55, +3.35) and Caterpillar (CAT 66.44, +1.20) are standouts after investors were pleased with their in-line earnings reports.
The Evening Standard reported that billionaire vulture fund investor Wilbur Ross is in talks to take over bond insurer Ambac (ABK 12.00, +0.67). Its stock is off its highs, but is managing to post a gain while other financials (-0.8%) struggle this session.
There was not a specific catalyst to account for the stock market's decline. Profit taking is certainly playing a role, as traders trim positions after the market's 7.8% surge from Wednesday's low to this session's high.
The market turned south as CNBC reported that Goldman Sachs (GS 196.47, -2.38) is cutting 5% of its workforce. Goldman Sachs quickly refuted the report, saying it is cutting the bottom 5% of performers, as it always does during its annual review. There are also rumors that European banks may be facing further write-downs and that a hedge fund is liquidating its assets.
Six of the ten sectors are higher, led by a 1.2% gain in materials. Financials are the main laggard with a 0.8% decline. DJ30 +6.10 NASDAQ +8.89 SP500 +0.19 NASDAQ Dec/Adv/Vol 1061/1736/1.14 bln NYSE Dec/Adv/Vol 1140/1892/693 mln
11:30 am : Stocks remain in negative territory. The Dow has dropped to fresh session lows. The market has had wild swings of late, as investors remain nervous. Treasury bonds have rallied as stocks decline in a flight-to-quality bid.
There does not appear to a specific catalyst for the stock market's recent downturn, but several factors may be contributing. 1) The reports of Goldman Sachs (GS 195.07, -3.78) job cuts may have unnerved the market even though the company said it was a "misrepresentation." 2) There is talk that another big European bank may face another write-down 3) There is talk that a hedge fund is liquating. 4) Traders are participating in some profit taking after the S&P's impressive 7.8% surge from Wednesday's low to this session's opening high.DJ30 -46.33 NASDAQ -1.64 SP500 -5.60 NASDAQ Dec/Adv/Vol 1096/1626/940 mln NYSE Dec/Adv/Vol 1205/1803/556 mln
11:00 am : Stocks fall into the red, led by financials, as CNBC reports that Goldman Sachs (GS 195.23, -3.62) is laying off 5% of its workforce. Stocks then recovery some after Goldman Sachs told CNBC the story is a "misrepresentation." They are laying off the bottom 5% of performers as part of their regular annual review process. Stocks have since crossed back into negative territory led by a 1.1% drop in financials.
Goldman Sachs has been able to navigate through the subprime turmoil relatively unscathed. The market's negative response showed investor fear that if Goldman needed to cut jobs much worse was to come from firms that have been hit hard such as Citigroup (C 29.96, -0.37) and Merrill Lynch (MER 56.66, -0.79).
Meanwhile, Fannie Mae (FNM 32.75, -1.44) and Freddie Mac (FRE 31.02, -0.98) fall to session lows as Reuters reports that Fannie's mortgage delinquencies rose to 0.90% in November from 0.83% in October.DJ30 -27.88 NASDAQ +2.16 SP500 -3.17 NASDAQ Dec/Adv/Vol 1056/1629/733 mln NYSE Dec/Adv/Vol 1029/1954/428 mln
10:30 am : The stock market drops to its lowest levels of the session, but continues to post a modest gain. There has been notable selling interest within the tech sector (+0.5%), which was up as high as 1.9%. There has been a drop in shares of Apple (AAPL 135.82) and Intel (INTC 20.67, -0.02) after providing leadership at the open.
Microsoft (MSFT 33.98, +0.73) is off its opening high, but continues to post a solid gain in the wake of its earnings report. Microsoft reported a second quarter net income of $0.50 per share, 92% higher than its $0.26 per share earnings in the year ago period. The company's results also topped the consensus estimate that called for a profit of $0.46 per share. Microsoft raised its outlook for the full year, estimating earnings of $1.85 to $1.88 per share, beating analysts' forecast of $1.81 per share.DJ30 +44.14 NASDAQ +20.04 SP500 +7.24 NASDAQ Dec/Adv/Vol 849/1731/480 mln NYSE Dec/Adv/Vol 668/2162/206 mln
10:00 am : Stocks give up a portion of their opening gains as the financial sector (+0.4%) slips off its highs. The sector managed to advance yesterday, but underperformed the stock market.
Nine sectors are trading higher, led by the materials (+2.1%) and energy (+1.4%) sectors. Consumer staples (-0.03%) is in the red, but is basically flat.DJ30 +63.57 NASDAQ +27.28 SP500 +9.84 NASDAQ Dec/Adv/Vol 488/1862/177 mln
09:40 am : Stocks start on a high note, with the Nasdaq set to outperform for the second straight day. The buying interest is being fueled by a strong earnings report and outlook from Microsoft (MSFT) and an Evening Standard report that billionaire vulture fund investor Wilbur Ross is in talks to take over bond insurer Ambac (ABK). Since yesterday's close the majority of earnings reports have been better than expected.
There are no economic reports or scheduled Fed speakers this session.
DJ30 +86.00 NASDAQ +40.56 SP500 +14.78
09:16 am : S&P futures vs fair value: +11.5. Nasdaq futures vs fair value: +33.5.
09:00 am : S&P futures vs fair value: +11.0. Nasdaq futures vs fair value: +34.0. Futures gain
some ground and point to a strong start. In commodity trading, gold hit an all-time high of $924.30 per ounce in overnight trade on news that companies stopped mining in South Africa due to power outage concerns. Crude oil is up 1.2% to $90.50 per barrel.
08:31 am : S&P futures vs fair value: +7.6. Nasdaq futures vs fair value: +26.8. Stock futures continue to point to a higher start. The majority of earnings reports from last night and this morning have been better than or inline with expectations. There are no economic releases or Federal Reserve speakers today.
08:00 am : S&P futures vs fair value: +8.1. Nasdaq futures vs fair value: +24.0. Futures point to a higher start, with the Nasdaq set to outperform. A strong earnings report and outlook from Microsoft (MSFT) is the main catalyst for the buying interest. Also lending support is a report that billionaire investor Wilbur Ross is in talks to take over struggling bond insurer Ambac (ABK). In overseas markets, Hong Kong’s Hang Seng closed up 6.7% and France’s CAC 40 and Germany’s DAX are currently up more than 1%.
06:23 am : S&P futures vs fair value: +6.0. Nasdaq futures vs fair value: +23.0.
06:23 am : FTSE...5927.00...+51.20...+0.9%. DAX...6915.09...+94.02...+1.4%.
06:23 am : Nikkei...13629.16...+536.38...+4.1%. Hang Seng...25122.37...+1583.10...+6.7%.
The market chewed up the report, liking the taste of it in early trading, and then promptly spit it back out, hitting both Microsoft and the broader averages with losses to close a remarkable week of trading.
The inability of Microsoft's stock to hold its opening gains, which were as much as 5.3%, spurred a disappointment trade that then took most stocks lower on the day. Dow components Caterpillar (CAT 65.93, +0.68) and Honeywell (HON 58.25, +2.05) managed to buck the trend after sharing reassuring earnings news.
Selling efforts were compounded by renewed concerns surrounding the likelihood of further credit losses for the financial sector, worries that a rescue plan of some sort for the bond insurers was no sure thing, and rumors that a hedge fund was in trouble.
On top of that, Merck (MRK 47.79, -1.77) and fellow drug company Schering-Plough (SGP 19.02, -1.15) got hit on a seemingly benign announcement from the FDA that it is still awaiting more results on the study of the efficacy of their joint cholesterol drug, Vytorin, and that an eventual review could take up to six months. Both stocks made up some lost ground, but still finished lower and acted as a weight on the market.
Strikingly, the financial (-2.5%) and consumer discretionary (-2.0%) sectors, which were the leaders in the rebound off Wednesday's low, were the hardest hit areas Friday. Although both areas were prime for some profit-taking, their weakness Friday is apt to stir concerns for some participants that the rally try this week will be short-lived.
A late-day report that New York officials sued Countrywide's (CFC 6.02, -0.09) underwriters for fraud triggered a final wave of selling interest that left the major indices near their lows of the session when the closing bell rang.
Every sector ended the day with a loss, although the materials sector (-0.2%) held up the best, aided in part by strength in certain gold stocks like Newmont Mining (NEM 53.26, +0.29) which followed reports of a shutdown of some South African mines due to a power shortage. Gold futures closed the week up 0.9% at a new high of $919.10 per troy ounce.
Weakness in the stock market once again benefited the Treasury market. The 10-year note jumped more than a point and its yield fell back to 3.56%.DJ30 -171.44 NASDAQ -34.72 NQ100 -2.1% R2K -0.6% SP400 -0.9% SP500 -21.46 NASDAQ Dec/Adv/Vol 1611/1394/2.64 bln NYSE Dec/Adv/Vol 1807/1365/1.88 bln
3:30 pm : The major indices pare a portion of their losses in a broad-based move. The stock market is now trading at its best level since 1:00 ET. It has been a volatile week of trading, although the S&P is set end the week near the unchanged mark.
The following is the best and worst performing industry groups of the week as we head into a final half hour of trading. Best: 1. Homebuilding (+30.9%) 2. Coal & Consumable Fuels (+17.1%) 3. Apparel & Accessories (+16.8%). Worst: 1. Wireless services (-14.3%) 2. Health Care Services (-9.7%) 3. Managed Healthcare (-8.6%)DJ30 -114.08 NASDAQ -21.79 SP500 -15.01 NASDAQ Dec/Adv/Vol 1716/1279/2.13 bln NYSE Dec/Adv/Vol 1870/1270/1.40 bln
3:00 pm : The major indices are trading near their session lows. Buyers remain on the sidelines after being disappointed that the stock market was unable to hold onto its opening gains. At current levels, the S&P and Nasdaq are set to end the week with a modest loss, while the Dow is set to end slightly higher.
There have been quite a few headlines crossing the wires regarding bond insurers. Standard & Poor's analysts said bond insurers must resolve business viability and other issues in order to retain their "AAA" ratings, according to Reuters. Reuters also reports that a bond insurers group said the industry is "financially strong" and is intent on defending its top credit ratings.DJ30 -159.16 NASDAQ -29.13 SP500 -20.01 NASDAQ Dec/Adv/Vol 1583/1388/1.99 bln NYSE Dec/Adv/Vol 1818/1318/1.27 bln
2:35 pm : The stock market is off its worst level, but continues to trade with a substantial loss.
Barclays Capital said banks may need to raise another $143 billion in capital if bond insurers get their credit ratings cut, according to Bloomberg.com. The article states banks have already raised $72 billion. If bond insurers get their ratings cut, it will lower the value of the $2.4 trillion in bonds they insure. Bond insurer Ambac (ABK 11.61, +0.28) is posting a slight gain on reports that it may be bought by vulture fund investor Wilbur Ross.
Merck (MRK 47.41, -2.15) and Schering-Plough (SGP 18.53, -1.64) just came under selling pressure after the FDA said the Vytorin study will take six months to review.DJ30 -133.80 NASDAQ -21.43 SP500 -17.56 NASDAQ Dec/Adv/Vol 1501/1426/1.85 bln NYSE Dec/Adv/Vol 1808/1328/1.18 bln
2:00 pm : The stock market comes under a fresh wave of selling pressure, sending it to new intraday lows. Meanwhile, Treasuries contine to rally as stocks weaken. The 10-year note is up 32 ticks, pushing its yield down to 3.58%.
All sectors are trading in the red. The financial sector (-2.7%) has extended its losses. Consumer discretionary (-1.9%) is the second worst perform sector.
Tech (-1.5%) is also posting a large loss as Apple (AAPL 131.40, -4.20) again comes under selling pressure. The stock is down 34% in 2008 compared to the tech sector's 14% decline.DJ30 -145.99 NASDAQ -26.67 SP500 -19.48 NASDAQ Dec/Adv/Vol 1509/1417/1.67 bln NYSE Dec/Adv/Vol 1619/1489/1.04 bln
1:30 pm : Stocks are trading near their recently reached session lows. The materials sector (+0.1%) has recovered into the green, although it remains well off its session high.
Financials have been hit the hardest, now down 1.9%. 18 of its 19 industry groups are lower. Thrifts & mortgages is the main laggard with a 4.2% loss. Investment banks & brokerages comes in as the second worst-performing group with a 3% loss. Residential REITs are managing to hold onto a 1.4% gain.DJ30 -107.11 NASDAQ -13.79 SP500 -13.70 NASDAQ Dec/Adv/Vol 1251/1648/1.53 bln NYSE Dec/Adv/Vol 1548/1532/951
1:00 pm : The major indices fall to fresh lows. All ten of the sectors are now in negative territory. In the past half-hour, Standard and Poor's lowered its ratings on 93 classes of mortgage pass-through certificates from 25 different U.S. subprime residential mortgage-backed securities transactions from nine issuers.
Meanwhile, disappointment that Microsoft (MSFT 33.21, -0.04) has slipped into negative territory is adding to the selling pressure.DJ30 -92.75 NASDAQ -9.98 SP500 -11.92 NASDAQ Dec/Adv/Vol 1094/1790/1.38 bln NYSE Dec/Adv/Vol 1143/1923/843 mln
12:35 pm : Stocks are fluctuating around the unchanged mark. The materials sector (+1.1%) continues to provide leadership.
Despite the market's decline, market breadth remains positive due to the outperformance of small-cap and mid-cap stocks. The Russell 2000 Index is up 1.1% and the S&P 400 Mid-Cap Index is up 0.5%. Advancers outpace decliners by 9-to-5 on the NYSE and by 8-to-5 on the Nasdaq.DJ30 -22.60 NASDAQ +6.05 SP500 -3.29 NASDAQ Dec/Adv/Vol 1053/1761/1.21 bln NYSE Dec/Adv/Vol 1174/1884/738 mln
12:00 pm : Stocks opened with significant gains, lifted by strong earnings and outlook from a tech giant and a report that a struggling bond insurer may be acquired. The stock market then drifted lower as investors remain uneasy and traders take some profits. At midday, stocks are off their lows as they trade at the unchanged mark.
Microsoft (MSFT +33.51, +0.26) fell off its highs and is now only posting a small gain despite the company's strong earnings report. Microsoft reported a second quarter net income of $0.50 per share, 92% higher than its $0.26 per share earnings in the year ago period. The company's results also topped the consensus estimate that called for a profit of $0.46 per share. Microsoft raised its outlook for the full year, estimating earnings of $1.85 to $1.88 per share, beating analysts' forecast of $1.81 per share.
There were a large number of companies that reported earnings, and most were better than expected. Dow components Honeywell (HON 59.55, +3.35) and Caterpillar (CAT 66.44, +1.20) are standouts after investors were pleased with their in-line earnings reports.
The Evening Standard reported that billionaire vulture fund investor Wilbur Ross is in talks to take over bond insurer Ambac (ABK 12.00, +0.67). Its stock is off its highs, but is managing to post a gain while other financials (-0.8%) struggle this session.
There was not a specific catalyst to account for the stock market's decline. Profit taking is certainly playing a role, as traders trim positions after the market's 7.8% surge from Wednesday's low to this session's high.
The market turned south as CNBC reported that Goldman Sachs (GS 196.47, -2.38) is cutting 5% of its workforce. Goldman Sachs quickly refuted the report, saying it is cutting the bottom 5% of performers, as it always does during its annual review. There are also rumors that European banks may be facing further write-downs and that a hedge fund is liquidating its assets.
Six of the ten sectors are higher, led by a 1.2% gain in materials. Financials are the main laggard with a 0.8% decline. DJ30 +6.10 NASDAQ +8.89 SP500 +0.19 NASDAQ Dec/Adv/Vol 1061/1736/1.14 bln NYSE Dec/Adv/Vol 1140/1892/693 mln
11:30 am : Stocks remain in negative territory. The Dow has dropped to fresh session lows. The market has had wild swings of late, as investors remain nervous. Treasury bonds have rallied as stocks decline in a flight-to-quality bid.
There does not appear to a specific catalyst for the stock market's recent downturn, but several factors may be contributing. 1) The reports of Goldman Sachs (GS 195.07, -3.78) job cuts may have unnerved the market even though the company said it was a "misrepresentation." 2) There is talk that another big European bank may face another write-down 3) There is talk that a hedge fund is liquating. 4) Traders are participating in some profit taking after the S&P's impressive 7.8% surge from Wednesday's low to this session's opening high.DJ30 -46.33 NASDAQ -1.64 SP500 -5.60 NASDAQ Dec/Adv/Vol 1096/1626/940 mln NYSE Dec/Adv/Vol 1205/1803/556 mln
11:00 am : Stocks fall into the red, led by financials, as CNBC reports that Goldman Sachs (GS 195.23, -3.62) is laying off 5% of its workforce. Stocks then recovery some after Goldman Sachs told CNBC the story is a "misrepresentation." They are laying off the bottom 5% of performers as part of their regular annual review process. Stocks have since crossed back into negative territory led by a 1.1% drop in financials.
Goldman Sachs has been able to navigate through the subprime turmoil relatively unscathed. The market's negative response showed investor fear that if Goldman needed to cut jobs much worse was to come from firms that have been hit hard such as Citigroup (C 29.96, -0.37) and Merrill Lynch (MER 56.66, -0.79).
Meanwhile, Fannie Mae (FNM 32.75, -1.44) and Freddie Mac (FRE 31.02, -0.98) fall to session lows as Reuters reports that Fannie's mortgage delinquencies rose to 0.90% in November from 0.83% in October.DJ30 -27.88 NASDAQ +2.16 SP500 -3.17 NASDAQ Dec/Adv/Vol 1056/1629/733 mln NYSE Dec/Adv/Vol 1029/1954/428 mln
10:30 am : The stock market drops to its lowest levels of the session, but continues to post a modest gain. There has been notable selling interest within the tech sector (+0.5%), which was up as high as 1.9%. There has been a drop in shares of Apple (AAPL 135.82) and Intel (INTC 20.67, -0.02) after providing leadership at the open.
Microsoft (MSFT 33.98, +0.73) is off its opening high, but continues to post a solid gain in the wake of its earnings report. Microsoft reported a second quarter net income of $0.50 per share, 92% higher than its $0.26 per share earnings in the year ago period. The company's results also topped the consensus estimate that called for a profit of $0.46 per share. Microsoft raised its outlook for the full year, estimating earnings of $1.85 to $1.88 per share, beating analysts' forecast of $1.81 per share.DJ30 +44.14 NASDAQ +20.04 SP500 +7.24 NASDAQ Dec/Adv/Vol 849/1731/480 mln NYSE Dec/Adv/Vol 668/2162/206 mln
10:00 am : Stocks give up a portion of their opening gains as the financial sector (+0.4%) slips off its highs. The sector managed to advance yesterday, but underperformed the stock market.
Nine sectors are trading higher, led by the materials (+2.1%) and energy (+1.4%) sectors. Consumer staples (-0.03%) is in the red, but is basically flat.DJ30 +63.57 NASDAQ +27.28 SP500 +9.84 NASDAQ Dec/Adv/Vol 488/1862/177 mln
09:40 am : Stocks start on a high note, with the Nasdaq set to outperform for the second straight day. The buying interest is being fueled by a strong earnings report and outlook from Microsoft (MSFT) and an Evening Standard report that billionaire vulture fund investor Wilbur Ross is in talks to take over bond insurer Ambac (ABK). Since yesterday's close the majority of earnings reports have been better than expected.
There are no economic reports or scheduled Fed speakers this session.
DJ30 +86.00 NASDAQ +40.56 SP500 +14.78
09:16 am : S&P futures vs fair value: +11.5. Nasdaq futures vs fair value: +33.5.
09:00 am : S&P futures vs fair value: +11.0. Nasdaq futures vs fair value: +34.0. Futures gain
some ground and point to a strong start. In commodity trading, gold hit an all-time high of $924.30 per ounce in overnight trade on news that companies stopped mining in South Africa due to power outage concerns. Crude oil is up 1.2% to $90.50 per barrel.
08:31 am : S&P futures vs fair value: +7.6. Nasdaq futures vs fair value: +26.8. Stock futures continue to point to a higher start. The majority of earnings reports from last night and this morning have been better than or inline with expectations. There are no economic releases or Federal Reserve speakers today.
08:00 am : S&P futures vs fair value: +8.1. Nasdaq futures vs fair value: +24.0. Futures point to a higher start, with the Nasdaq set to outperform. A strong earnings report and outlook from Microsoft (MSFT) is the main catalyst for the buying interest. Also lending support is a report that billionaire investor Wilbur Ross is in talks to take over struggling bond insurer Ambac (ABK). In overseas markets, Hong Kong’s Hang Seng closed up 6.7% and France’s CAC 40 and Germany’s DAX are currently up more than 1%.
06:23 am : S&P futures vs fair value: +6.0. Nasdaq futures vs fair value: +23.0.
06:23 am : FTSE...5927.00...+51.20...+0.9%. DAX...6915.09...+94.02...+1.4%.
06:23 am : Nikkei...13629.16...+536.38...+4.1%. Hang Seng...25122.37...+1583.10...+6.7%.
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