Tuesday, June 03, 2008 7:03:24 PM
Market Update 080603
http://biz.yahoo.com/mu/update.html
4:30 pm : The stock market traded in a volatile manner on Tuesday, with financial stocks (-0.6%) driving much of the action. The S&P 500 ended the day 0.6% lower, although it traded as high as 0.5% and down as much as 1.1%.
Lehman Brothers (LEH 30.81, -3.02) was the underlying catalyst to the session's swings. The investment bank was in focus in the early-going after The Wall Street Journal reported the company may raise billions of dollars of additional capital, citing sources familiar with the situation.
The market shrugged off this news during early trade, with an unexpected increase in May factory orders acting as a buying catalyst. The 1.1% increase in factory orders (consensus -0.1%) indicate second quarter GDP may rise more than what is currently forecast.
Sentiment then soured, as Lehman Brothers, and the market, sharply sold off in late afternoon trade as rumors swirled that Lehman may have borrowed emergency funds from the Fed's discount window.
Lehman Brothers subsequently denied it borrowed from the Fed, according to reports. The market pared its losses on the denial, but still ended the day with a substantial decline of 0.6%.
Although Lehman stole the limelight on Tuesday, there was plenty of trading action in other areas of the financial markets.
Fed Chairman Ben Bernanke's remarks on the economic outlook gave support to the dollar (+0.5%). He said, "Over time, the Federal Reserve's commitment to both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy... will be key factors ensuring that the dollar remains a strong and stable currency."
The strengthening dollar played a role in a 1.4% decline in commodity prices and a sharp 2.7% decline in crude prices. The weakness in crude weighed on the energy sector, which was the main laggard with a decline of 1.8%.
In corporate news, General Motors (GM 17.58, +0.14) rose as much as 4.2% on news that it is shutting down four North American plants that produce trucks and SUVs in response to a shift in consumer preferences on record gasoline prices. The company expects the measures will save its North American operations at a run rate over $1 billion by 2010. Some of the enthusiasm over the cost cutting measures faded after General Motors reported May North American auto sales fell 28%, compared to the expected decline of roughly 20%.
In the end, nine of the ten economic sectors ended the day with a loss. Energy (-1.8%) and telecom (-1.3%) posted the largest declines. Health care (+0.3%) was the sole sector to post a gain.DJ30 -100.97 NASDAQ -11.05 NQ100 -0.5% R2K -0.3% SP400 +0.03% SP500 -8.02 NASDAQ Dec/Adv/Vol 1623/1221/2.20 bln NYSE Dec/Adv/Vol 1844/1261/1.29 bln
3:35 pm : Press reports indicate Lehman Brothers (LEH 30.90, -2.93) denied speculation that it accessed the Fed's borrowing window, saying that its cash holdings rose to more than $40 billion in the second quarter. The firm said the last time it went to a Fed facility was April 16. In March, rumors over Lehman's capital position spurred a 31% decline in its stock price over a two-day period. Lehman eventually recovered much of those losses, while Bear Stearns collapsed.
The news lifted the financial sector (-0.5%) and the broader market (-0.5%), although stocks remain in the red.DJ30 -79.55 NASDAQ -9.20 SP500 -5.95 NASDAQ Dec/Adv/Vol 1656/1172/1.80 bln NYSE Dec/Adv/Vol 1911/1188/1.00 bln
3:00 pm : The major indices are off their worst levels but continue to post substantial losses.
The financial sector has made a significant recovery attempt, as it is currently down 0.9% after being down as much as 1.9%. The sector was under pressure yesterday and is down 3.7% for the week.DJ30 -119.94 NASDAQ -22.64 SP500 -11.28 NASDAQ Dec/Adv/Vol 1828/989/1.59 bln NYSE Dec/Adv/Vol 2082/999/876 mln
2:35 pm : Broad-based selling pressure sends the major indices to fresh lows. There does not appear to be a single catalyst for the sell-off, but rather a confluence of factors that includes concerns over financials as Lehman Bros. (LEH 29.60, -4.23) tumbles and disappointment over General Motors' (GM 17.28, -0.16) auto sales.
Although the decline is broad-based, some sectors are playing a large role in the reversal than others. Financials are down 1.8% after being up as much as 0.9%, tech is down 1.0% after being up 1.3%, and energy is down 1.6% after being up 0.9%.
At the same time, crude oil prices have plummeted 2.9% to $124.27 per barrel. Crude prices have retreated 8.5% from their all time high of $135 that was reached on May 22.DJ30 -145.50 NASDAQ -29.34 SP500 -14.45 NASDAQ Dec/Adv/Vol 1897/918/1.47 bln NYSE Dec/Adv/Vol 2161/908/806 mln
2:00 pm : The major indices extend their losses as disappointing auto sales data from General Motors (GM 17.20, -0.24) hits the wires.
General Motors reported May North American sales fell 28%, compared to the expected decline of roughly 20%. Truck sales plummeted 39%, while car sales fell 17%. GM's stock reverses into the red, going from a gain of 4.2% to a loss of 1.4%. GM announced early this morning that it is closing four North America auto plants in an effort to cut costs.
The stock market is now down 0.8% after being up as much as 0.5%.DJ30 -119.69 NASDAQ -18.14 SP500 -10.49 NASDAQ Dec/Adv/Vol 1717/1081/1.25 bln NYSE Dec/Adv/Vol 1925/1123/691 mln
1:35 pm : The stock market suddenly retreats into the red, falling to its worst level of the session. The decline is broad-based, with only health care (+0.3%) and materials (+0.4%) still in positive territory. Crude prices are also under selling pressure, down 2.0% to $125.25 per barrel.
European markets ended their session higher, with a rebound in banks leading the way. London's FTSE rose 0.8%, Germany's DAX advanced 0.2% and France's CAC gained 1.0%.DJ30 -76.87 NASDAQ -6.15 SP500 -4.86 NASDAQ Dec/Adv/Vol 1344/1409/1.03 bln NYSE Dec/Adv/Vol 1492/1525/582 mln
1:00 pm : The stock market is trading in mixed fashion with neither sellers nor buyers able to establish much momentum to this point.
Separately, the dollar has enjoyed a good session as it has caught a bid on remarks made by Fed Chairman Bernanke in a speech to the International Monetary Conference. Notably, the Fed Chairman said the Fed is attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and that both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy will be key factors ensuring that the dollar remains a strong and stable currency.
This view led traders to think we have likely seen the end of the rate-cuttting cycle, which is supportive for the dollar. In turn, the dollar's strength today has led to a moderation in dollar-denominated commodity prices such as oil (-1.5%).DJ30 -16.37 NASDAQ +8.86 SP500 +2.17 NASDAQ Dec/Adv/Vol 1282/1455/904 mln NYSE Dec/Adv/Vol 1398/1610/513 mln
12:30 pm : The stock market gives up some of its advance following an increase in broad-based selling pressure. The Dow has fallen into negative territory, although its loss is slight.
Within the Dow, 20 of the 30 components are in positive territory. Weakness in Boeing (BA 78.58, -2.57) is acting as the limiting factor, as it is shedding 18 points off the Dow.DJ30 -5.79 NASDAQ +11.47 SP500 +3.73 NASDAQ Dec/Adv/Vol 1231/1478/841 mln NYSE Dec/Adv/Vol 1382/1611/479 mln
11:55 am : The major indices are modestly higher at midday, as traders shrug off a report that a major investment bank may raise more capital and embrace a better-than-expected economic reading. Nine of the ten economic sectors are in positive territory, although most of the strength is concentrated within large-cap tech and materials.
The Wall Street Journal reported this morning that Lehman Brothers (LEH 32.35, -1.48) may raise billions more in capital due to an expected second quarter loss, citing people familiar with the matter. Lehman opened 0.1% higher, but then succumbed to selling pressure as it trades 4.4% lower. The financial sector as a whole is underperforming the broader market on a relative basis with a 0.2% gain, but has held up well.
The session's sole economic release helped spur some buying interest. April factory orders rose 1.1%, after increasing 1.5% in March. The result was better than the expected decline of 0.1%. Orders increased 2.6% when excluding transports. Importantly, this report does not indicate an economy that is in a recession and suggests second quarter GDP could be stronger than what is currently forecast.
The report helped lift the energy (+0.4%) and materials (+1.0%) sectors, even as oil (-1.4%) and commodities (-0.9%) fall as the dollar advances 0.6%. The dollar saw an increase in buying interest after Fed Chairman Bernanke said the Fed's commitment to price stability and the underlying strength of the U.S. economy will be key factors in ensuring that the dollar remains a strong and stable currency.
The tech sector (+1.1%) has been posting the largest gain for much of the session thanks to strength in large-cap bellwethers Oracle (ORCL 23.37, +0.69), Cisco (CSCO 2426.69, +0.34) and IBM (IBM 128.67, +1.31).
In corporate news, General Motors (GM 18.03, +0.59) is shutting down four North American plants that produce trucks and SUVs in response to a shift in consumer preferences on record gasoline prices. The company is reviewing its Hummer brand, including the possibility of a complete sale.
Luxury homebuilder Toll Brothers (TOL 21.93, +0.97) posted a quarterly loss of $94 million, although the results were better than expected. DJ30 +23.20 NASDAQ +18.56 SP500 +6.52 NASDAQ Dec/Adv/Vol 1137/1535/733 mln NYSE Dec/Adv/Vol 1279/1677/419 mln
11:30 am : The major indices climb back toward session highs, with all ten economic sectors in positive territory.
The dollar is holding a substantial 0.5% gain, with the advance fueled by comments this morning from Fed Chairman Bernanke. Bernanke stated that the Fed’s commitment to price stability and the underlying strength of the U.S. economy will be key factors in ensuring that the dollar remains a strong and stable currency.
The advance in the dollar is playing a significant role in the 0.7% decrease in commodity prices, with oil falling 1.9%.DJ30 +20.62 NASDAQ +16.48 SP500 +4.85 NASDAQ Dec/Adv/Vol 1193/1444/636 mln NYSE Dec/Adv/Vol 1322/1593/365 mln
11:00 am : Trading is somewhat choppy as the Dow briefly dips into the red and then recovers. Financials (-0.3%) are playing a large role in the fluctuations.
Lehman Brothers (LEH 31.99, -1.85) is down 5.4% after opening 0.1% higher. The Wall Street Journal reported this morning that Lehman may raise billions more in capital, citing people familiar with the matter. Lehman's stock is up 58% since the March 17 Bear Stearns bailout, largely due to a massive 46% gain on March 18.
Standard & Poor's said during a conference call that earnings questions regarding financial companies are much more severe than what it had previously thought. S&P noted that Merrill Lynch (MER 42.02, -0.60) still has a large exposure to troubled asset types and that Lehman has higher risk exposure than its peers. Yesterday, S&P downgraded the credit ratings of Merrill, Lehman and Morgan Stanley (MS 42.63, -0.47).DJ30 +16.60 NASDAQ +15.65 SP500 +4.73 NASDAQ Dec/Adv/Vol 1202/1372/509 mln NYSE Dec/Adv/Vol 1354/1534/295 mln
10:30 am : The major indices give up a portion of their factory orders induced gains as financials (-0.3%) retreat into the red. The Nasdaq is outperforming as tech gains 0.8%.
Crude oil prices have eased 1.1% to $126.30 per barrel, which is giving a 2.2% boost to the Amex Airline Index. Commodities as a whole have slipped 0.9% as the dollar advances 0.6% against a basket of world currencies.DJ30 +13.84 NASDAQ +13.01 SP500 +3.71 NASDAQ Dec/Adv/Vol 1102/1397/359 mln NYSE Dec/Adv/Vol 1193/1623/219 mln
10:05 am : The major indices extend their gains on a better-than-expected economic release.
April factory orders rose 1.1%, after increasing 1.5% in March. The result was better than the expected decline of 0.1%. Orders increased 2.6% when excluding transports. Importantly, this report does not indicate an economy that is in a recession.
Eight of the ten economic sectors are posting a gain. Materials (+1.0%) saw a surge in buying interest on the report.DJ30 +30.45 NASDAQ +16.35 SP500 +5.14 NASDAQ Dec/Adv/Vol 1056/1260/1.66 mln NYSE Dec/Adv/Vol 1340/1383/113 mln
09:40 am : The stock market opens modestly higher after Monday's steep losses. We expect choppy trading conditions as economic data shoots down the worst recession fears, but still paints a picture of weak growth.
The financial sector is playing a significant role in whipsaw action of the market. Financials are again in focus today, as The Wall Street Journal reported Lehman Brothers (LEH 33.16, -0.67) is considering as much as a $4 billion new capital raise.
In other news, General Motors (GM 17.68, +0.24) is closing four North American plants that produce trucks and SUVs in response to changing consumer preferences in the face of $4 per gallon gas. GM expects the plant closings will save $1 billion. GM's stock is trading near 26-year lows.DJ30 +23.12 NASDAQ +9.15 SP500 +3.31
09:20 am : S&P futures vs fair value: +4.4. Nasdaq futures vs fair value: +6.5. Futures have a muted reaction to Fed Chairman Bernanke's comments. Bernanke is concerned about increasing inflation expectations, noting that the possibility of continued increases in commodity prices is an important risk to the inflation forecast. He said the Fed's commitment to price stability and the underlying strengths of the U.S. economy will be key factors in ensuring that the dollar remains a strong and stable currency.
08:59 am : S&P futures vs fair value: +4.0. Nasdaq futures vs fair value: +6.0. Futures climb to their best levels of the morning, although the advance remains modest. Crude oil prices are down 0.3% to $127.43 per barrel.
08:30 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: +5.5. Futures continue to suggest a slightly higher start to the trading day ahead of Fed Chairman Ben Bernanke's speech at 9:00 ET. In response to changing consumer preferences, General Motors (GM) is going to close four North American plants that produce trucks and SUVs. The company will review is Hummer brand, which includes the possibility of a complete sale.
08:01 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: +4.0. Futures suggest a slightly higher start to the trading day, which follows yesterday's steep declines. Financials are likely to be in focus, after The Wall Street Journal reported Lehman Brothers (LEH) may raise billions in new capital. In earnings news, luxury homebuilder Toll Brothers (TOL) posted a quarterly loss of $94 million, although the results were better than expected.
06:19 am : S&P futures vs fair value: +2.7. Nasdaq futures vs fair value: +4.0.
06:19 am : FTSE...6027.10...+19.50...+0.3%. DAX...6996.18...-12.59...-0.2%.
06:19 am : Nikkei...14209.17...-230.97...-1.6%. Hang Seng...24375.76...-455.60...-1.8%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
http://biz.yahoo.com/mu/update.html
4:30 pm : The stock market traded in a volatile manner on Tuesday, with financial stocks (-0.6%) driving much of the action. The S&P 500 ended the day 0.6% lower, although it traded as high as 0.5% and down as much as 1.1%.
Lehman Brothers (LEH 30.81, -3.02) was the underlying catalyst to the session's swings. The investment bank was in focus in the early-going after The Wall Street Journal reported the company may raise billions of dollars of additional capital, citing sources familiar with the situation.
The market shrugged off this news during early trade, with an unexpected increase in May factory orders acting as a buying catalyst. The 1.1% increase in factory orders (consensus -0.1%) indicate second quarter GDP may rise more than what is currently forecast.
Sentiment then soured, as Lehman Brothers, and the market, sharply sold off in late afternoon trade as rumors swirled that Lehman may have borrowed emergency funds from the Fed's discount window.
Lehman Brothers subsequently denied it borrowed from the Fed, according to reports. The market pared its losses on the denial, but still ended the day with a substantial decline of 0.6%.
Although Lehman stole the limelight on Tuesday, there was plenty of trading action in other areas of the financial markets.
Fed Chairman Ben Bernanke's remarks on the economic outlook gave support to the dollar (+0.5%). He said, "Over time, the Federal Reserve's commitment to both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy... will be key factors ensuring that the dollar remains a strong and stable currency."
The strengthening dollar played a role in a 1.4% decline in commodity prices and a sharp 2.7% decline in crude prices. The weakness in crude weighed on the energy sector, which was the main laggard with a decline of 1.8%.
In corporate news, General Motors (GM 17.58, +0.14) rose as much as 4.2% on news that it is shutting down four North American plants that produce trucks and SUVs in response to a shift in consumer preferences on record gasoline prices. The company expects the measures will save its North American operations at a run rate over $1 billion by 2010. Some of the enthusiasm over the cost cutting measures faded after General Motors reported May North American auto sales fell 28%, compared to the expected decline of roughly 20%.
In the end, nine of the ten economic sectors ended the day with a loss. Energy (-1.8%) and telecom (-1.3%) posted the largest declines. Health care (+0.3%) was the sole sector to post a gain.DJ30 -100.97 NASDAQ -11.05 NQ100 -0.5% R2K -0.3% SP400 +0.03% SP500 -8.02 NASDAQ Dec/Adv/Vol 1623/1221/2.20 bln NYSE Dec/Adv/Vol 1844/1261/1.29 bln
3:35 pm : Press reports indicate Lehman Brothers (LEH 30.90, -2.93) denied speculation that it accessed the Fed's borrowing window, saying that its cash holdings rose to more than $40 billion in the second quarter. The firm said the last time it went to a Fed facility was April 16. In March, rumors over Lehman's capital position spurred a 31% decline in its stock price over a two-day period. Lehman eventually recovered much of those losses, while Bear Stearns collapsed.
The news lifted the financial sector (-0.5%) and the broader market (-0.5%), although stocks remain in the red.DJ30 -79.55 NASDAQ -9.20 SP500 -5.95 NASDAQ Dec/Adv/Vol 1656/1172/1.80 bln NYSE Dec/Adv/Vol 1911/1188/1.00 bln
3:00 pm : The major indices are off their worst levels but continue to post substantial losses.
The financial sector has made a significant recovery attempt, as it is currently down 0.9% after being down as much as 1.9%. The sector was under pressure yesterday and is down 3.7% for the week.DJ30 -119.94 NASDAQ -22.64 SP500 -11.28 NASDAQ Dec/Adv/Vol 1828/989/1.59 bln NYSE Dec/Adv/Vol 2082/999/876 mln
2:35 pm : Broad-based selling pressure sends the major indices to fresh lows. There does not appear to be a single catalyst for the sell-off, but rather a confluence of factors that includes concerns over financials as Lehman Bros. (LEH 29.60, -4.23) tumbles and disappointment over General Motors' (GM 17.28, -0.16) auto sales.
Although the decline is broad-based, some sectors are playing a large role in the reversal than others. Financials are down 1.8% after being up as much as 0.9%, tech is down 1.0% after being up 1.3%, and energy is down 1.6% after being up 0.9%.
At the same time, crude oil prices have plummeted 2.9% to $124.27 per barrel. Crude prices have retreated 8.5% from their all time high of $135 that was reached on May 22.DJ30 -145.50 NASDAQ -29.34 SP500 -14.45 NASDAQ Dec/Adv/Vol 1897/918/1.47 bln NYSE Dec/Adv/Vol 2161/908/806 mln
2:00 pm : The major indices extend their losses as disappointing auto sales data from General Motors (GM 17.20, -0.24) hits the wires.
General Motors reported May North American sales fell 28%, compared to the expected decline of roughly 20%. Truck sales plummeted 39%, while car sales fell 17%. GM's stock reverses into the red, going from a gain of 4.2% to a loss of 1.4%. GM announced early this morning that it is closing four North America auto plants in an effort to cut costs.
The stock market is now down 0.8% after being up as much as 0.5%.DJ30 -119.69 NASDAQ -18.14 SP500 -10.49 NASDAQ Dec/Adv/Vol 1717/1081/1.25 bln NYSE Dec/Adv/Vol 1925/1123/691 mln
1:35 pm : The stock market suddenly retreats into the red, falling to its worst level of the session. The decline is broad-based, with only health care (+0.3%) and materials (+0.4%) still in positive territory. Crude prices are also under selling pressure, down 2.0% to $125.25 per barrel.
European markets ended their session higher, with a rebound in banks leading the way. London's FTSE rose 0.8%, Germany's DAX advanced 0.2% and France's CAC gained 1.0%.DJ30 -76.87 NASDAQ -6.15 SP500 -4.86 NASDAQ Dec/Adv/Vol 1344/1409/1.03 bln NYSE Dec/Adv/Vol 1492/1525/582 mln
1:00 pm : The stock market is trading in mixed fashion with neither sellers nor buyers able to establish much momentum to this point.
Separately, the dollar has enjoyed a good session as it has caught a bid on remarks made by Fed Chairman Bernanke in a speech to the International Monetary Conference. Notably, the Fed Chairman said the Fed is attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and that both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy will be key factors ensuring that the dollar remains a strong and stable currency.
This view led traders to think we have likely seen the end of the rate-cuttting cycle, which is supportive for the dollar. In turn, the dollar's strength today has led to a moderation in dollar-denominated commodity prices such as oil (-1.5%).DJ30 -16.37 NASDAQ +8.86 SP500 +2.17 NASDAQ Dec/Adv/Vol 1282/1455/904 mln NYSE Dec/Adv/Vol 1398/1610/513 mln
12:30 pm : The stock market gives up some of its advance following an increase in broad-based selling pressure. The Dow has fallen into negative territory, although its loss is slight.
Within the Dow, 20 of the 30 components are in positive territory. Weakness in Boeing (BA 78.58, -2.57) is acting as the limiting factor, as it is shedding 18 points off the Dow.DJ30 -5.79 NASDAQ +11.47 SP500 +3.73 NASDAQ Dec/Adv/Vol 1231/1478/841 mln NYSE Dec/Adv/Vol 1382/1611/479 mln
11:55 am : The major indices are modestly higher at midday, as traders shrug off a report that a major investment bank may raise more capital and embrace a better-than-expected economic reading. Nine of the ten economic sectors are in positive territory, although most of the strength is concentrated within large-cap tech and materials.
The Wall Street Journal reported this morning that Lehman Brothers (LEH 32.35, -1.48) may raise billions more in capital due to an expected second quarter loss, citing people familiar with the matter. Lehman opened 0.1% higher, but then succumbed to selling pressure as it trades 4.4% lower. The financial sector as a whole is underperforming the broader market on a relative basis with a 0.2% gain, but has held up well.
The session's sole economic release helped spur some buying interest. April factory orders rose 1.1%, after increasing 1.5% in March. The result was better than the expected decline of 0.1%. Orders increased 2.6% when excluding transports. Importantly, this report does not indicate an economy that is in a recession and suggests second quarter GDP could be stronger than what is currently forecast.
The report helped lift the energy (+0.4%) and materials (+1.0%) sectors, even as oil (-1.4%) and commodities (-0.9%) fall as the dollar advances 0.6%. The dollar saw an increase in buying interest after Fed Chairman Bernanke said the Fed's commitment to price stability and the underlying strength of the U.S. economy will be key factors in ensuring that the dollar remains a strong and stable currency.
The tech sector (+1.1%) has been posting the largest gain for much of the session thanks to strength in large-cap bellwethers Oracle (ORCL 23.37, +0.69), Cisco (CSCO 2426.69, +0.34) and IBM (IBM 128.67, +1.31).
In corporate news, General Motors (GM 18.03, +0.59) is shutting down four North American plants that produce trucks and SUVs in response to a shift in consumer preferences on record gasoline prices. The company is reviewing its Hummer brand, including the possibility of a complete sale.
Luxury homebuilder Toll Brothers (TOL 21.93, +0.97) posted a quarterly loss of $94 million, although the results were better than expected. DJ30 +23.20 NASDAQ +18.56 SP500 +6.52 NASDAQ Dec/Adv/Vol 1137/1535/733 mln NYSE Dec/Adv/Vol 1279/1677/419 mln
11:30 am : The major indices climb back toward session highs, with all ten economic sectors in positive territory.
The dollar is holding a substantial 0.5% gain, with the advance fueled by comments this morning from Fed Chairman Bernanke. Bernanke stated that the Fed’s commitment to price stability and the underlying strength of the U.S. economy will be key factors in ensuring that the dollar remains a strong and stable currency.
The advance in the dollar is playing a significant role in the 0.7% decrease in commodity prices, with oil falling 1.9%.DJ30 +20.62 NASDAQ +16.48 SP500 +4.85 NASDAQ Dec/Adv/Vol 1193/1444/636 mln NYSE Dec/Adv/Vol 1322/1593/365 mln
11:00 am : Trading is somewhat choppy as the Dow briefly dips into the red and then recovers. Financials (-0.3%) are playing a large role in the fluctuations.
Lehman Brothers (LEH 31.99, -1.85) is down 5.4% after opening 0.1% higher. The Wall Street Journal reported this morning that Lehman may raise billions more in capital, citing people familiar with the matter. Lehman's stock is up 58% since the March 17 Bear Stearns bailout, largely due to a massive 46% gain on March 18.
Standard & Poor's said during a conference call that earnings questions regarding financial companies are much more severe than what it had previously thought. S&P noted that Merrill Lynch (MER 42.02, -0.60) still has a large exposure to troubled asset types and that Lehman has higher risk exposure than its peers. Yesterday, S&P downgraded the credit ratings of Merrill, Lehman and Morgan Stanley (MS 42.63, -0.47).DJ30 +16.60 NASDAQ +15.65 SP500 +4.73 NASDAQ Dec/Adv/Vol 1202/1372/509 mln NYSE Dec/Adv/Vol 1354/1534/295 mln
10:30 am : The major indices give up a portion of their factory orders induced gains as financials (-0.3%) retreat into the red. The Nasdaq is outperforming as tech gains 0.8%.
Crude oil prices have eased 1.1% to $126.30 per barrel, which is giving a 2.2% boost to the Amex Airline Index. Commodities as a whole have slipped 0.9% as the dollar advances 0.6% against a basket of world currencies.DJ30 +13.84 NASDAQ +13.01 SP500 +3.71 NASDAQ Dec/Adv/Vol 1102/1397/359 mln NYSE Dec/Adv/Vol 1193/1623/219 mln
10:05 am : The major indices extend their gains on a better-than-expected economic release.
April factory orders rose 1.1%, after increasing 1.5% in March. The result was better than the expected decline of 0.1%. Orders increased 2.6% when excluding transports. Importantly, this report does not indicate an economy that is in a recession.
Eight of the ten economic sectors are posting a gain. Materials (+1.0%) saw a surge in buying interest on the report.DJ30 +30.45 NASDAQ +16.35 SP500 +5.14 NASDAQ Dec/Adv/Vol 1056/1260/1.66 mln NYSE Dec/Adv/Vol 1340/1383/113 mln
09:40 am : The stock market opens modestly higher after Monday's steep losses. We expect choppy trading conditions as economic data shoots down the worst recession fears, but still paints a picture of weak growth.
The financial sector is playing a significant role in whipsaw action of the market. Financials are again in focus today, as The Wall Street Journal reported Lehman Brothers (LEH 33.16, -0.67) is considering as much as a $4 billion new capital raise.
In other news, General Motors (GM 17.68, +0.24) is closing four North American plants that produce trucks and SUVs in response to changing consumer preferences in the face of $4 per gallon gas. GM expects the plant closings will save $1 billion. GM's stock is trading near 26-year lows.DJ30 +23.12 NASDAQ +9.15 SP500 +3.31
09:20 am : S&P futures vs fair value: +4.4. Nasdaq futures vs fair value: +6.5. Futures have a muted reaction to Fed Chairman Bernanke's comments. Bernanke is concerned about increasing inflation expectations, noting that the possibility of continued increases in commodity prices is an important risk to the inflation forecast. He said the Fed's commitment to price stability and the underlying strengths of the U.S. economy will be key factors in ensuring that the dollar remains a strong and stable currency.
08:59 am : S&P futures vs fair value: +4.0. Nasdaq futures vs fair value: +6.0. Futures climb to their best levels of the morning, although the advance remains modest. Crude oil prices are down 0.3% to $127.43 per barrel.
08:30 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: +5.5. Futures continue to suggest a slightly higher start to the trading day ahead of Fed Chairman Ben Bernanke's speech at 9:00 ET. In response to changing consumer preferences, General Motors (GM) is going to close four North American plants that produce trucks and SUVs. The company will review is Hummer brand, which includes the possibility of a complete sale.
08:01 am : S&P futures vs fair value: +2.9. Nasdaq futures vs fair value: +4.0. Futures suggest a slightly higher start to the trading day, which follows yesterday's steep declines. Financials are likely to be in focus, after The Wall Street Journal reported Lehman Brothers (LEH) may raise billions in new capital. In earnings news, luxury homebuilder Toll Brothers (TOL) posted a quarterly loss of $94 million, although the results were better than expected.
06:19 am : S&P futures vs fair value: +2.7. Nasdaq futures vs fair value: +4.0.
06:19 am : FTSE...6027.10...+19.50...+0.3%. DAX...6996.18...-12.59...-0.2%.
06:19 am : Nikkei...14209.17...-230.97...-1.6%. Hang Seng...24375.76...-455.60...-1.8%.
My posting is for my own entertainment, do your own DD before pushing your buy/call button
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