Monday's outing was accented by a handful of developments, the most prominent of which was a proposal put forth by Treasury Secretary Paulson to enact a sweeping overhaul of the U.S. financial regulation system.
Paulson's plan, among other things, calls for a much larger oversight role for the Federal Reserve, the merging of the Securities Exchange Commission with the Commodity Futures Trading Commission, a federal charter for insurance companies and the closure of the Office of Thrift Supervision.
The main thrust of Paulson's proposal is to streamline bureaucracy in the regulatory system. The plan, which had its roots last spring, wasn't intended to be a response to the current crisis in the financial markets. The plan itself provided some provocative talking points, yet the realization that it wasn't going to be implemented any time soon - if at all - diminished its impact on today's market.
The latter point notwithstanding, the attempt to modernize the regulatory process and make the U.S. financial system more competitive in the global marketplace did not go unappreciated.
The financial sector, rebounding from last week's losses, played a supportive role that enabled the broader market to overcome substantive declines in S&P components Merck (MRK 37.95, -6.56) and Schering-Plough (SGP 14.41, -5.06). Those stocks declined 15% and 26%, respectively, after the efficacy of cholesterol-lowering drugs Vytorin and Zetia was questioned by a panel of cardiologists who recommended prescribing the drugs only as a last resort.
Other supportive influences in Monday's trade included a decline in oil prices and a better than expected regional manufacturing report. Specifically, oil prices, which touched $106.78 early in the day, fell 3.7% to $101.74, while the Chicago Purchasing Manager's Index checked in at 48.2 versus the market's expectation for a reading of 46.0. A number below 50 still connotes contraction, so bullish enthusiasm was held in check.
On Tuesday the market will be provided some insight on national manufacturing activity in the form of the March ISM Index. Economists expect the survey to reveal an overall reading of 47.5 versus 48.3 in February; Briefing.com looks for a slightly higher reading of 48.0.
Until then investors will be left to contemplate overnight the worst quarterly performance for the market, in which the S&P 500 declined 9.9%, since 2002. Separately, the Dow Jones Industrial Average dropped 7.6%, the Nasdaq Composite declined 14.1%, the S&P 400 Midcap Index slipped 9.2% and the Russell 2000 fell 10.2%.DJ30 +46.49 NASDAQ +17.92 SP500 +7.48 NASDAQ Dec/Adv/Vol 1178/1736/1.74 bln NYSE Dec/Adv/Vol 1218/1918/1.46 bln
3:30 pm : After some choppy trading, the stock market is largely unchanged from 30 minutes ago. If the S&P 500 is unable to make a decent run in the last half-hour, it will finish the month in the red. This will mark the fifth consecutive monthly loss, which has not occurred since 1990.
First Quarter 2008 Performance Review: All ten economic sectors are set to post a loss. Technology is the worst performing sector with a 15.4% decline, with financials close behind with a 14.8% slide. Consumer staples and industrials are relative outperformers with losses of 2.7% and 4.5%, respectively.DJ30 +40.95 NASDAQ +14.54 SP500 +6.65 NASDAQ Dec/Adv/Vol 1139/1743/1.32 bln NYSE Dec/Adv/Vol 1208/1898/1.03 bln
3:05 pm : The major indices extend their decline, but remain in the green. On CNBC, the CEO of Wells Fargo (WFC 29.19, -0.16) said it is possible to have another Bear Stearns (BSC 10.39, -0.39) incident, and that the markets are very volatile.
First Quarter 2008 Performance Review: The weakness in the dollar has captured the market's attention, some arguing it is bad, and some arguing it is good. The DXY Index--a basket of major currencies compared against the dollar--is down 6.5%, which is its largest quarterly decline since 2004. Of the ten major currencies, the Swiss Franc has posted the largest gain of 14.3%. The only major currency to post a loss against the dollar is the Canadian dollar (-3.3%). In emerging currencies, the largest gainer is the Chilean Peso (+14.3%) and the largest decliner is the Iceland Krona (-16.9%). DJ30 +46.33 NASDAQ +15.06 SP500 +6.41 NASDAQ Dec/Adv/Vol 1184/1667/1.19 bln NYSE Dec/Adv/Vol 1257/1839/930 mln
2:30 pm : The major indices slip a bit, but continue to hold onto solid gains. It has been a slow news day. Within the S&P 500, 370 stocks are trending higher. General Electric (GE 37.15, +0.54) is providing leadership, while Merck (MRK 37.96, -6.55) is the worst performing name.
First Quarter 2008 Performance Review: The S&P 400 Mid Cap Index is down 9.4%. Its best performing stock is homebuilder Hovnanian (HOV), up 48.0%. PMI Group (PMI) is down 56.1%, making it the worst performing stock.DJ30 +70.42 NASDAQ +21.79 SP500 +9.08 NASDAQ Dec/Adv/Vol 1105/1729/1.08 bln NYSE Dec/Adv/Vol 1186/1889/845 mln
2:00 pm : Buying interest fades, but selling interest has not picked up much either as the major indices trade modestly below their best levels. This session's gains have sent the Dow and Nasdaq into positive territory for the month, although the S&P 500 is still posting a slight loss.
First Quarter 2008 Performance Review: Seven of the 30 Dow components have posted a gain. Wal-Mart (WMT) is up 11.6%, making it the best performing component. Merck (MRK) is the worst performing component with a 35.0% decline.DJ30 +85.59 NASDAQ +24.80 SP500 +10.66 NASDAQ Dec/Adv/Vol 1089/1741/977 mln NYSE Dec/Adv/Vol 1127/1943/762 mln
1:35 pm : The stock market climbs higher. Market breadth is positive with advancers outpacing decliners by 9-to-5, and by more than 3-to-2 on the Nasdaq. Meanwhile, crude continues to tumble on no apparent news. It is now down 4.2% to $101.22 per barrel.
First Quarter 2008 Performance Review: The small-cap Russell 2000 Index (-9.6%) is performing on par with its large-cap counterparts. Encysive Pharmaceuticals (ENCY) is its best performing stock, with a 175.3% advance. Keryx Biopharmaceuticals (KERX) saw the steepest drop of 92.9%.DJ30 +103.23 NASDAQ +27.96 SP500 +12.91 NASDAQ Dec/Adv/Vol 1063/1749/898 mln NYSE Dec/Adv/Vol 1052/1985/698 mln
1:00 pm : The major indices are trading at their best levels of the session. Telecom (+2.5%) is posting the largest gain, although financials (+2.2%) are having the most influence due to their heavy weighting. Investment banks & brokerages (+3.3%) is the best performing financial group, although it is still down 8.6% over the last five sessions.
First Quarter 2008 Performance Review: The Nasdaq 100 is down 14.7%. Its best performing component is biopharm company Celgene (CELG), with a 31.9% gain. The worst performing stock is GPS maker Garmin (GRMN) with a 44.3% drop.DJ30 +73.22 NASDAQ +20.17 SP500 +10.27 NASDAQ Dec/Adv/Vol 1120/1666/801 mln NYSE Dec/Adv/Vol 1106/1918/932 mln
12:30 pm : The major indices are off their best levels, but are holding onto decent gains. The CRB Commodity Index (-1.6%) has taken a turn south in conjunction with crude oil (-3.4% to $101.99). Gold is now down 0.9%.
The reversal in crude prices has taken a toll on the energy stocks. The energy sector is now up only 0.2% after being up as much as 1.7% in earlier trade.
First Quarter 2008 Performance Review: The CRB Commodity Index is posting a gain of 8.2%, which is its largest in 2.5 years. However, the index is well off its best levels of the quarter when it was up 17.7%. Natural gas has seen the largest gain of 31.9%, while cattle are posting the largest loss of 15.7%. Crude oil is up 7.7%, but was up as much as 16.5% when it hit its all-time high of $111.80 per barrel.DJ30 +66.44 NASDAQ +14.71 SP500 +8.52 NASDAQ Dec/Adv/Vol 1193/1564/736 mln NYSE Dec/Adv/Vol 1188/1828/577 mln
12:05 pm : The final day of trade in first quarter 2008 has been a positive one, although news has been relatively slow. At midday, the stock market is posting a healthy gain of 0.7%, near its best levels of the session. Topping headlines is a plan to overhaul financial regulation, and news that two popular cholesterol fighting drugs may not be effective.
Treasury Secretary Henry Paulson outlined his proposal to revamp financial regulation by streamlining current bureaucracy. The Federal Reserve would have increased power, and several regulatory agencies would be combined. Paulson noted the plan is not in response to the current market turmoil, and will not be completed this year.
Shares of Merck (MRK 38.04, -6.47) are posting their largest one-day percent decline since 2002, and shares of Schering-Plough (SGP 14.40, -5.07) are down the most ever on news that their popular cholesterol fighting drugs may not be effective. According to reports, a panel of cardiologists said the two drugs—Vytorin and Zetia—should only be used as a last resort. The combined sales of the drugs were roughly $5 billion in 2007.
Eight of the ten sectors are trending higher, led by a 1.9% gain in financials. Healthcare (-1.0%) is the main laggard.
In economic news, the Chicago PMI—a regional manufacturing survey—rose to 48.2, from 44.5. This was better than the expected reading of 46.0. However, the reading is still below 50, which indicates deteriorating manufacturing condition in the Chicago region.
Crude oil prices are down 3.0% to $102.40 per barrel, after being up as much as 1.1% in earlier trade. Currently, there is no apparent news item for the quick reversal and it may be a technical based move.
First Quarter 2008 Performance Review: The U.S. stock market’s weakness has garnered a lot of negative press, although it is actually outperforming most of the major world stock markets. The S&P 500’s 9.8% drop is better than returns on France’s CAC (-16.2%), Germany’s DAX (-19.0%), London’s FTSE (-11.7%), Japan’s Nikkei (-18.2%), China's CSI 300 (-29.0%) and Hong Kong’s Hang Seng (-17.8%).
DJ30 +67.66 NASDAQ +15.98 SP500 +9.02 NASDAQ Dec/Adv/Vol 1145/1574/636 mln NYSE Dec/Adv/Vol 1148/1822/495 mln
11:35 am : The stock market hits its best level of the session, although its overall advance is modest. Only healthcare (-1.0%) remains in the red, due to weakness in Merck (MRK 38.03, -6.48) and Schering-Plough (SGP 14.48, -4.99). Merck is posting its largest one day percent decline since 2004, and Schering is posting is largest loss ever on news that the effectiveness of their popular cholesterol drugs has been questioned.
First Quarter 2008 Performance Review: Of the 90 primary world stock market indices, 21 have posted a gain. Ghana is leading the way with a 15.4% advance. The Vietnam Stock Index is the worst performing with a 44.2% drop.DJ30 +50.80 NASDAQ +12.23 SP500 +7.78 NASDAQ Dec/Adv/Vol 1201/1478/552 mln NYSE Dec/Adv/Vol 1187/1738/426 mln
11:00 am : The major indices are trading with a slight gain. The financial sector (+1.4%) is now the best performing sector, as it trades at its best level of the session. Paulson has finished his speech on his proposal to overhaul regulation on U.S. financial markets.
First Quarter 2008 Performance Review: The best performing S&P 500 industry group has been trucking (+29%)--its only component is Ryder System (R).DJ30 +12.13 NASDAQ +6.64 SP500 +4.58 NASDAQ Dec/Adv/Vol 1235/1401/454 mln NYSE Dec/Adv/Vol 1263/1628/346 mln
10:35 am : After some choppy action, the Dow falls into the red, and the Nasdaq and S&P fall to the unchanged mark. Treasury Secretary Paulson is outlining his plan to overhaul financial regulation. He noted that this task will take a long time, and will not be completed this year.
Five sectors remain in the green. The energy sector (+1.5%) has taken the top leadership spot as crude oil is up 1.0% to $106.60 per barrel.
First Quarter 2008 Performance Review: Of the S&P 500's 130 industry groups, 109 have posted a loss. The worst performing group is education services (-41%), which got clipped after traders were displeased with results from for-profit education provider Apollo (APOL).DJ30 -17.01 NASDAQ +3.01 SP500 +2.12 NASDAQ Dec/Adv/Vol 1302/1238/338 mln NYSE Dec/Adv/Vol 1331/1480/259 mln
10:10 am : All three major indices are now in the green. Eight of the ten sectors are posting a gain. Telecom (+1.2%) and energy (+1.2%) are showing the most strength. Healthcare (-1.3%) is the main laggard.
The Chicago PMI, a regional manufacturing survey, came in at 48.2. This was higher than the expected reading of 46.0, and higher than the prior reading of 44.5.
First Quarter 2008 Performance Review: The S&P 500 is down 10.2%. The worst performing stock is Bear Stearns (BSC) with a 88% decline. Rumors of liquidity problems caused a run on the bank, causing it to sell itself to JPMorgan for $2 per share to avoid bankruptcy. The offer was later raised to $10 per share.DJ30 +4.89 NASDAQ +10.35 SP500 +3.30 NASDAQ Dec/Adv/Vol 1015/1436/222 mln NYSE Dec/Adv/Vol 1112/1634/176 mln
09:40 am : The major indices open in mixed fashion on a slow news day. Topping headlines is news that Treasury Secretary Henry Paulson is going to outline a proposal that will give the Federal Reserve more power. This has made a nice talking point, but since there is nothing concrete it has had limited effect on stock prices.
Shares of Merck (MRK) and Schering-Plough (SGP) are under pressure on news that a panel of cardiologists questioned the effectiveness of cholesterol-lowering drugs Vytorin and Zetia.
Today marks the last day of first quarter 2008. Unless stocks make some incredible gains this session, this quarter will mark the largest percent decline for the S&P 500 since 2002.
First Quarter 2008 Performance Review: Only 110 S&P 500 stocks are in the green. The best performing S&P 500 stock has been Big Lots (BIG) with a 40.2% gain.DJ30 -10.58 NASDAQ +6.16 SP500 +0.47
09:18 am : S&P futures vs fair value: -1.0. Nasdaq futures vs fair value: +4.0.
09:02 am : S&P futures vs fair value: -1.5. Nasdaq futures vs fair value: +3.8. Futures slip a bit. The S&P 500 is poised for a slightly lower open, while the Nasdaq is set for a slightly higher open. Merck (MRK) is down 11% in pre-market trading and Schering-Plough (SGP) is down 22% on news that a panel of cardiologists questioned the effectiveness of cholesterol-lowering drugs Vytorin and Zetia.
08:31 am : S&P futures vs fair value: +0.8. Nasdaq futures vs fair value: +7.8. Futures indicate a positive open. Asian markets had steep declines, with the Hang Seng falling 1.9% and the Nikkei shedding 2.3%. European market's were trading lower, but are now trading in mixed fashion.
08:00 am : S&P futures vs fair value: +1.8. Nasdaq futures vs fair value: +9.2. Futures suggest a modestly higher opening on the last trading day of the first quarter. According to reports, Treasury Secretary Hank Paulson will outline a plan today that will increase the Federal Reserve’s power. On the economic front, the March Chicago PMI is set for release at 9:45 ET.
06:19 am : S&P futures vs fair value: -2.4. Nasdaq futures vs fair value: -2.0.
06:18 am : FTSE...5659.20...-33.70...-0.6%. DAX...6469.36...-90.54...-1.4%.
06:18 am : Nikkei...12525.54...-294.93...-2.3%. Hang Seng...22849.20...-436.75...-1.
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