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Post by cyclops on Aug 27, 2011 21:07:07 GMT 10
The S&P 500 rallied 4.7%, marking the first weekly gain in more than a month. Stocks gained in four of the five sessions, though there was still plenty of volatility. Stocks benefited from the potential end to the strife in Libya and a vote of confidence in financials by esteemed investor Warren Buffett.
Buying interest was broad-based with all 10 sectors advancing more than 2.0%. Recently hard-hit cyclical sectors outperformed. Consumer Discretionary rallied 6.0%, tech gained 6.2% and industrials advanced 6.0%.
The main item this week was a statement from Fed Chairman Ben Bernanke at Jackson Hole, Wyoming. Bernanke noted again that the economic recovery has been less robust than what had been hoped, but restated that the FOMC is prepared to employ tools as needed. The benefits and costs of additional stimulus were also discussed, but at this time the Fed appears to have no plans of making any changes to monetary policy. The market initially extended its losses following Bernanke's speech, but quickly rallied to positive territory to end the week on a positive note.
Bank of America (BAC 11.3%) continued to make headlines throughout the week. There was plenty of speculation regarding its financial state, which spurred Warren Buffett to reach out to BofA. Buffett's Berkshire Hathaway (BRK.A 2.1%) invested $5 bln in exchange for preferred shares and warrants. The move helped lift shares of BAC to a weekly gain of 11%.
Apple (AAPL) gained 7.7% even as Steve Jobs announced he is stepping down as CEO. Health concerns have been well known so the market had already priced in the possibility of Jobs stepping down.
Outside of equities, gold prices fell 1.2% as margin requirements were raised. Crude oil prices climbed 4.1% and the 10-year Treasury yield increased about 12 bps to 2.19%
In economic news, second quarter GDP was revised to 1.0% from 1.3% advance estimate. That was slightly worse than the consensus of 1.1%.
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Post by cyclops on Sept 4, 2011 18:45:16 GMT 10
Aggressive selling on Friday extended a slide that started on Thursday. That effectively erased gains staged in the first half of the week, giving the stock market a fractional weekly loss.
An upward trend carried stocks higher at the start of the week. Buyers were encouraged by signs of improved sentiment in Europe, where news of consolidation in Greece's banking industry was regarded as a step toward stabilizing the country's banking system. Stocks even overcame an abysmal Consumer Confidence Index reading of 44.5 for August; it was the worst level for the Index since April 2009.
Stocks climbed in seven out of eight sessions for a cumulative gain of more than 8% before becoming winded on Thursday, when the stock market attempted to bounce in response to a better-than-expected August ISM Manufacturing Index reading of 50.6. The move failed to hold when the S&P 500 encountered resistance near the 1230 zone, which marks the 50% retracement level between the July high and August low. Some conceived that the better-than-expected ISM reading, though relatively neutral on its own, could stand as evidence against the case for further monetary policy.
Speculation about a third round of quantitative easing has been rampant, but minutes from the most recent FOMC meeting failed to make note of any such plans. Instead, only a mention of the Fed's intent to monitor conditions and take action, if determined necessary, was made.
Still, talk of further easing resurfaced again on Friday, when stocks slumped 2.5% -- their worst one-day percentage drop in two weeks -- in response to a disappointing monthly payrolls report. According to official data, no nonfarm payroll additions were made during August. That contrasted with the consensus call for an increase of 70,000. Even nonfarm private payrolls increased by a mere 17,000, which is far less than the 110,000 that had been generally expected among economists.
Concern that the disappointing employment data reflected weakness in the broader economy sent oil prices 2.9% lower to $86.33 per barrel, but the want for safety bolstered buying among precious metals, such that gold prices spiked 2.6% to $1877.20 per ounce and silver prices surged 3.8% to $43.12 per ounce on Friday. Treasuries climbed sharply, too, such that the yield on the benchmark 10-year Note returned to 2.0%.
Financials suffered the worst fate during the back-to-back losses. The sector shed 2.4% on Thursday then surrendered another 4.0% on Friday. The latest leg of losses was exacerbated by news that a dozen banks are the target of federal accusations regarding mortgage securities misrepresentation.
There wasn't a great deal of share volume at week's end, but that's mostly because many trading desks were thinly staffed ahead of the three-day weekend -- U.S. markets are closed on Monday in observance of Labor Day.
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Post by cyclops on Sept 25, 2011 23:19:21 GMT 10
The stock market mustered its first gain of the week on Friday. The gain, although modest, came as participants moved to cover their positions following four days of concerted selling.
Action in the final session of the week was a bit boring, given the volatility of the preceding sessions. Stocks essentially spent the session chopping along in mixed fashion. The action came as participants displayed a sense of uncertainty regarding the market's treatment of headline risk related to tenuous global economic conditions and precarious financial conditions in Europe ahead of the weekend. Just last week traders were feeling more confident about those themes, resulting in five straight gains for stocks.
Following only the second weekly advance in almost two months, the risk trade was abruptly switched off at the start of this week. Traders showed disappointment over the lack of progress by Greece in establishing an austerity plan that would secure it financial assistance from the Troika. Reflecting the deterioration of financial conditions in the Eurozone's periphery, Italy had its debt downgraded by analysts at Moody's, but that decision really wasn't too surprising.
Sentiment really began to sour with the midweek announcement by the FOMC that it will purchase $400 billion of Treasuries with maturities of six years to 30 years, while selling an equal amount of Treasuries with a remaining maturities of three years or less, by the end of June 2012. The plan, labeled "Operation Twist" by traders, was generally in-line with what had been expected on Wall Street, but it seemed less than accommodative in light of the Fed's statement that downside risk to economic growth remain high.
Stocks responded to the Fed's statement by tumbling to a loss of almost 3%. Stocks then fell more than 3% the next day as selling pressure was perpetuated by aggressive selling abroad. Although the bloodletting eased on Friday, the stock market still suffered a weekly loss of 6.5%. That marks the seventh weekly slide in nine weeks time.
The resumption of the stock market's downtrend drove masses of traders into Treasuries. As a result, the yield on the benchmark 10-year Note dropped to a record low of less than 1.70%. It moved back above 1.80% on Friday, though.
The dollar also benefited from a flight to safety. Relative to a basket of major foreign currencies, the greenback climbed to a seven-month high, but wavered a bit in the final session of the week.
Interestingly, gold failed to attract safety seekers. Instead, the precious metal was caught up in the sell-off that slammed other commodities. Gold prices finished pit trade on Friday at $1645 per ounce for a 5.6% loss, but for the week the precious metal fell about 9%. Overall, commodities fell almost 7%, according to the CRB Commodity Index.
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Post by cyclops on Oct 1, 2011 15:22:17 GMT 10
A weak performance on Friday resulted in another weekly loss for stocks -- their eighth in 10 weeks of trade. Such an extensive stretch of weakness has left the stock market to log a monthly loss of 7% and a quarterly loss of more than 14%.
Trade on Friday was spent entirely in negative territory. Participants turned to selling after watching markets overseas slide. Trade in Europe, which has influenced sentiment at home for weeks, saw Britian's FTSE fall 1.3%, France's CAC close 1.5% lower, and Germany's DAX drop 2.4% after a 3.0% jump in Eurozone CPI dampened hope for a rate cut by the European Central Bank. Overnight action in Asia saw Hong Kong's Hang Seng slide 2.7%, China's Shanghai Composite slip 0.3%, and Japan's Nikkei finish flat. China's HSBC Manufacturing PMI for September stayed below 50, the dividing line between contraction and expansion, for the third straight month, making some question the country's ability to sustain growth in the face of sluggish global conditions.
The inclination to sell trumped a couple of better-than-expected domestic reports. The Chicago PMI for August bested the Briefing.com consensus call of 54.0 by improving to 60.4 from 56.5 in July. The final September reading on consumer sentiment from the University of Michigan was revised upward to 59.4 from the preliminary reading of 57.8. A reading of 57.5 had been expected.
Personal income and spending numbers for August were less impressive. Income declined by 0.1% while spending increased by 0.2%. Income failed to meet the 0.1% increase expected, on average, by economists polled by Briefing.com, but the increase in spending was exactly in line with what had been expected.
Without any kind of positive leadership, stocks were left to wrestle with sellers throughout the session. Even defensive-oriented stocks succumbed to aggressive selling pressure after they had limited losses in the first half of the day. As a result, all 10 major sectors tumbled to losses in excess of 1%.
Financials and materials stocks fell the hardest. They dropped 3.5% and 3.7%, respectively. They were also some of the poorest performers for all of September and all of the third quarter. During September, financials fell 11.5% while materials tumbled 16.6%. Over the course of the quarter, though, financials shed 23% and materials surrendered a full quarter, 25%, of their market cap.
With selling intensifying into the close, stocks effectively surrendered the gains that they had staged in previous sessions. That caused stocks to record a weekly loss of 0.4%. It all made for an appropriate conclusion to the third quarter, which goes down as the stock market's poorest quarter since a near 23% drop in the fourth quarter of 2008.
Although the action on Friday appeared appropriate in the context of the quarter, it contrasted with trade at the start of the week, when stocks climbed more than 2% on Monday and another 1% on Tuesday. Buying in both days was based largely on hope that officials in Europe are finally crafting a comprehensive plan that will help the region shore up its finances.
Momentum from those two sessions helped stocks open higher on Wednesday, but participants, starved for details of the rumored plan, began to push back against stocks and ultimately dropped the market for a 2% loss. Data that day didn't do anything to bolster the case buying either -- durable goods orders and orders less transportation both slipped 0.1% during August.
But by Thursday, approval from highly influential Germany to expand the European Financial Stability Facility helped stocks snap back. Upbeat data also played a pivotal part. The latest weekly initial jobless claims count dropped by 37,000 from the prior week to 391,000, which is the first time in more than a month that initial claims fell below 400,000. Moreover, the final reading for second quarter GDP showed growth of 1.3%, which not only marked an increase from the 1.0% rate posted in the prior reading, but it also bested the 1.2% growth rate that had been broadly expected.
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Post by cyclops on Oct 8, 2011 22:23:30 GMT 10
Failure to sustain a rebound from midday losses left stocks to roll into the red during the final hour. They still made it out with week 2% higher than where they started.
The major equity averages lacked direction this morning, even though premarket participants had cheered the September jobs report. Nonfarm payrolls grew by 103,000, up from an upwardly revised 57,000 in August. However, the upside surprise is mostly due to the end of a strike at Verizon. Excluding those workers, payrolls increased by 58,000, which is on par with the 60,000 new jobs that had been generally expected among economists polled. Meanwhile, private payrolls increased by 137,000, which came on top of the upwardly revised 42,000 jobs that were added during the prior month. An increase of 83,000 had been broadly expected.
The number of people entering the workforce was roughly the same as the number of workers who found jobs in September, so the unemployment rate remained at 9.1%, which is exactly what had been expected. However, job gains were mostly part-time, resulting in an increase in underemployment that took the "real" unemployment rate up to 16.5% from 16.2% in the prior month.
Even though the payrolls report proved better-than-expected, stocks lacked leadership at the open of trade. That made it difficult for the major equity averages to extend their streak of gains to a fourth straight session. The listlessness of early trade left stocks to slide into negative territory. Selling intensified in response to news that analysts at Fitch cut their ratings on Italy and Spain. At its low, the stock market was down more than 1%.
Stocks managed to stage a steady afternoon rebound that took the market back to a modest gain, but the move ultimately broke down in the final few minutes of trade. Although the late dive took all three major equity averages into negative territory, losses were steepest for the Nasdaq, which was hurt by weakness among biotech plays. Strength among a few blue chips helped limit the extent of the Dow's decline.
Financials were a drag all session. The sector descended to a 3.7% loss as bank stocks buckled. Banks were likely imbued by news that analysts at Moody's downgraded a dozen banks in the United Kingdom and a handful of others in Portugal.
Financials actually fueled broad market gains in the prior session, but only after the sector rallied back from an early loss. Their leadership yesterday helped the S&P 500 push through resistance at the 1160 line. Of course, the late slide on Friday caused the S&P 500 to finish the week below that mark.
Shares of retailers were also in play yesterday. The attention came after a relatively mixed batch of same-store sales results for September.
Initial weekly jobless claims on Thursday didn't have much of an influence on the mood of market participants, mostly because the 401,000 initial claims essentially matched what had been widely expected. That tally was indicative of an improving labor sector since it stayed at a level that is within the "Recovery Zone."
Europe was in close focus yesterday, too. Participants were generally surprised at the lack of accommodative action taken by the European Central Bank, which opted to keep its benchmark lending rate at 1.50%. The Bank of England opted to keep its target rate at 0.50%, but it increased its asset purchase plan to 275 billion pounds from 200 billion pounds. That news initially put pressure on the pound, but it eventually rallied back and even finished the week on a positive note.
Tuesday and Wednesday saw stocks climb sharply for the broad market's best back-to-back performance in more than a month. On Wednesday, participants were given insight into the official September payrolls number by an ADP Employment Change report that showed that private payrolls increased by 91,000. The consensus had called for an increase of 45,000. Although the report doesn't always accurately forecast the exact payrolls number, it is often directionally accurate relative to expectations.
The ISM Services Index for September was shrugged off; it slipped to 53.0 from 53.3 in the prior month, but still narrowly exceeded the 52.8 that had been widely expected.
Trade on Tuesday may have kicked off a three-day rally, which took stocks 6% higher, but what's more impressive is that stocks had to crawl out of a hole that had the S&P 500 at a 52-week low and more than 20% below its May high. The rally from those depths came once participants opted, for the time being, to look past the threat that Greece could default on its debt, let alone meet its deficit reduction targets, and the systemic troubles of the broader eurozone.
Such threats had weighed heavily on trade in the first session of the week, overshadowing an improvement in the ISM Manufacturing Index to 51.6 from 50.6 when it had been expected to slip to 50.5. The increase came amid solid growth in new orders, which actually played a part in the first increase in order backlogs since early summer. Weakness on Monday marked an extension of the selling that caused stocks to slide so sharply in the fourth quarter -- the worst quarter for the market in almost three years. That weakness had many seeking the safety of the benchmark 10-year Note. The Note's yield was down to 1.75% at the start of the week, but climbed back 2.00 by week's end.
The bond market will be closed on Monday in observance of Columbus Day.
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Post by cyclops on Oct 15, 2011 16:19:03 GMT 10
The S&P 500 overcame resistance on Friday to score another strong gain, contributing to the broad market's best weekly performance since July 2009.
A positive tone among market participants was perpetuated by more buying in Europe, where the continent's major bourses extended their recent rally. On Friday, Britain's FTSE advanced 1.2%, but gained more than 3% for the week. France's CAC clmbed 1.0% in the week's final session, but 4% over the past five trading days. A 0.9% advance by the Germany's DAX on Friday helped fuel a 5% weekly gain. Such strength reflected improved sentiment in the eurozone, where concerns about fiscal and financial conditions in both the peripheral and core constituents have threatened confidence for months. A commitment early this week by leading eurozone officials to develop a comprehensive plan intended to stabilize precarious conditions and shore up capital at European banks sent a strong signal to global investors. It also got the week started on a strong note -- the stock market rallied more than 3% on Monday for its best single-session percentage gain in almost seven weeks. Following that heady move, trade became more subdued on Tuesday. Participants kept their focus on Europe as Slovakia moved to vote on the European Financial Stability Facility (EFSF). Country officials actually voted down the plan Tuesday night in conjunction with a no confidence vote for Slovakia's prime minister, but there remained a belief that the EFSF will eventually win approval.
Tuesday also ushered in the unofficial start of earnings season when Dow component Alcoa (AA 10.26, +0.16) announced its latest quarterly results after the close. Some regarded the fact that the company came short of the consensus earnings estimate as an ominous sign. Minutes from the most recent FOMC meeting were released Wednesday, but the release was essentially a non-event since it offered no new insight into the mindset of the monetary policy setting committee. JPMorgan Chase (JPM 31.89, +0.29) was bid up aggressively ahead of its quarterly announcement on Thursday morning. The diversified financial services giant posted earnings that exceeded what Wall Street had widely expected, but the dubious quality of that beat was a focus of analysts. Concerted selling caused the stock to drop sharply. Given that JPMorgan Chase is widely regarded as the best in its class, many other banks were implicated. The result was a near 5% drop for the KBW Bank Index, which only made a half-hearted attempt to rebound on Friday, when it advanced a relatively tame 0.7%.
Another weekly initial jobless claims count narrowly above 400,000 -- 404,000 to be specific -- had little impact on action during Thursday's trade, but that's mostly because the tally was right in stride with the 406,000 claims that had been widely expected. A superior report from Google (GOOG 591.68, +32.69) helped close out the week on a strong note. Both the top and bottom line bested what had been expected. That sent the stock to its highest level in more than one month and inspired buying in other large-cap tech issues. Collectively, tech stocks climbed 2.1% on Friday. Since tech is the largest sector by market weight, its strength helped the S&P 500 stage a late climb that took it past the 1220 line, which had been a point of formidable resistance at the start of the session and earlier in the week.
Energy stocks were the best performers on Friday. Their 3.6% climb was helped along by a 3.2% spike in oil prices to almost $87 per barrel. Oil prices ended the week about 5% above where they began it. In the backdrop of Friday's action were some encouraging retail sales numbers.
Overall retail sales for September increased by 1.1%, while sales less autos increased by 0.6%. Economists surveyed by had expected respective increases of 0.6% and 0.3%. Not only did the September numbers exceed expectations, but they also marked the strongest increases since the first quarter. Friday's advance marked the fourth gain in five sessions, helping the S&P 500 score a 6% weekly gain. Perhaps more impressive is that the stock market has now advanced in seven of the past nine sessions for a cumulative gain of more than 11%. ..Nasdaq 100 +1.9%. ..S&P Midcap 400 +1.9%. ..Russell 2000 +2.0%.
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Post by cyclops on Oct 23, 2011 11:17:13 GMT 10
After another volatile week, stocks are closing the week out with a strong +1.9% gain, bringing the S&P 500 +1% vs. last Friday's close. Although earnings season picked up this week, the market remains preoccupied with Europe and the steady stream of back-and-forth headlines from various "officials" that flow out of the region. While a definitive plan remains to be seen, market participants seem to be giving policymakers the benefit of the doubt that they are making progress towards one. This weekend brings the first of two upcoming EU summits, although EU leaders have managed to lower expectations for this meeting and a plan is not expected until the follow-up summit midweek next week.
This week's swings have been heavily influenced by Europe. The markets sold off Monday and early on Tuesday, with weak Chinese data and a Goldman (GS) earnings miss weighing. However, late Tuesday stocks rallied on reports that Germany and France were looking to increase the size of the EFSF. Wednesday was less eventful, and then yesterday stocks saw another late-day rally. That strength is continuing today after reports indicated that Germany and France are on the same page with regard to a European bailout plan.
Outside of Europe, earnings remained the next most important topic of interest during the week. Overall the Q3 earnings season has gotten off to a decent start, with about 70% of companies beating EPS estimates. However, the stock reactions to the reports have been more mixed. It is reasonable to expect the percentage of companies beating expectations to decline somewhat as we progress through earnings season, as the size of companies reporting tends to decline.
Some earnings highlights from the week include the following:
Monday afternoon IBM (IBM) beat and raised EPS expectations but also reported a slight miss on the top line. The stock fell 4% on Tuesday and is down 3.5% on the week vs. a 1.2% gain in the S&P 500. Apple (AAPL) surprised the Street on Tuesday afternoon when it missed Q3 EPS estimates and issued an upside Q4 outlook. The company usually blows out estimates and gives very conservative guidance. iPhone 4 sales came up short as consumers held off for the iPhones 4S, released late last week.
Looking at the financials, Monday was a tale of two banks. Citi (C) reported a solid quarter which sent the stock 7% higher, while Wells Fargo (WFC) missed and fell 8%. On Tuesday morning, BofA (BAC) reported a noisy quarter while Goldman Sachs (GS) missed expectations and reported its second ever quarterly loss as a public company. Ironically, both stocks rallied and the financial sector led the broader market higher that day with a 4.8% gain. In general, forward estimates have come down for the money center banks, but seasonal loan growth and continued favorable loss trends have allayed some fears.
Industrial companies have further eased fears that we are on the verge of a recession. W. W. Grainger (GWW), Parker Hannifin (PH), CSX (CSX), Union Pacific (UNP) and this morning Honeywell (HON) all provided relatively upbeat outlooks.
There are hundreds of earnings reports due out next week, including results from Caterpillar (CAT), Netflix (NFLX), Amgen (AMGN), United Steel (X), UBS (UBS), F5 Networks (FFIV), Rightnow Technologies (RNOW), Broadcom (BRCM), Novellus (NVLS), Aflac (AFL), Akamai (AKAM), Triquint Semi (TQNT), Visa (V), Moody's (MCO) and Potash Corp (POT), among others.
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Post by cyclops on Oct 30, 2011 0:10:20 GMT 10
In contrast to the action of the first four sessions of the week, stocks spent Friday trading close to the neutral line for a flat finish.
Trade on Friday lacked excitement. Even with the weekend immediately around the corner, many market participants were compelled to take early rest. Their fatigue came after stocks staged four consecutive swings of 1% or more.
To be fair, though, the final session of the week didn't feature much news flow, or at least enough of the sort that would bring participants back in to the fold. Earnings were generally better than expected, as has been the case all week, but overall broad market participants appeared uninspired by them. That said, Merck (MRK 35.11, +0.80) made a strong move on the back of a better-than-expected report. Fellow blue chip Chevron (CVX 109.64, +0.67) had a quiet session, despite an upside earnings surprise of its own. Whirlpool (WHR 51.80, -8.67) tumbled in response to an earnings miss.
Economic data featured a 0.1% increase in personal income during September, slightly less than the consensus forecast of 0.3% growth. Personal spending increased by 0.6%, just as had been expected. These numbers were already incorporated into the advance reading on third quarter GDP.
On Thursday, advance GDP data showed that the economy expanded at a 2.5% clip during the third quarter. That exceeded the 2.3% growth rate that had been broadly expected to follow the 1.3% increase in output posted in the prior quarter.
Another weekly initial jobless claims tally just above 400,000 was given little discussion, especially since most traders focused their attention on the European Union's (EU) plan aimed at improving the continent's precarious financial conditions. Although specifics weren't released, participants were pleased that the plan will increase the eurozone bailout fund to about $1.4 trillion, recapitalize banks, and cut Greece's debt obligations by 50%. The stock market spiked more than 3% on Thursday for its best single-session performance in more than two weeks, but financials fared even better by boasting a 6% gain as bank stocks benefited quelled concern about their presence in Europe.
Many investors had thought that they would have to wait a few more weeks for the plan, given that a meeting among members of the EU on Wednesday finished without any word related to the matter. Still, the belief that European leaders were committed to finding a solution helped bolster buying interest, such that the stock market gained more than 1%. That contrasted trade on Tuesday, when angst ahead of the meeting left the broad market to tumble 2% for its only loss of the week.
Trade in the first session of the week was broadly positive, resulting in a gain of more than 1% for the stock market. The advance took the S&P 500 back above the 1250 line for the first time in more than two months. Tech stocks, which collectively make up the largest sector by market weight, were some of the top performers, partly fueled by news that Oracle (ORCL 33.69, +0.03) acquired RightNow Tech (RNOW 43.10, -0.16) for a hefty premium over its prior session closing price.
Market participants return on Monday for one final session in October. The S&P 500 heads into that session riding four straight weekly gains and on pace for monthly gain of more than 13%, which would make for one of the stock market's best monthly performances on record
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Post by cyclops on Nov 5, 2011 13:29:18 GMT 10
Renewed weakness on Friday left stocks to finish the week on a down note, contributing to the market's worst weekly performance in more than a month. As has been the case all week, participants paid close attention to the events of Europe.
Greece drove trade for virtually the entire week and, by extension, was responsible for most of the market's volatility. During the course of this week's first two sessions stocks sank more than 5% as participants reacted to news that Greece wanted to pursue a referendum of the eurozone bailout, effectively threatening to undermine the efficiency with which the plan could be completed and implemented. Stocks spiked in the next two sessions as sentiment improved amid reports that officials put pressure on Greece to acquiesce to the agenda of other eurozone members by abandoning its plans for a referendum. Although the drama didn't exactly rival a Greek tragedy, it still made for interesting theatre.
By Friday, stocks were unable to build on the gains achieved in the past two sessions. Buying was partly diffused by news that discourse during a G-20 meeting became less than amicable. That seemed to suggest that, despite recent efforts, an agreement on how to handle Greece and precarious conditions in the rest of Europe remain elusive.
Market participants were also uninspired by news that unemployment eased down to 9.0% from 9.1%, which is where it had been expected to remain. Nonfarm payrolls for October totaled 80,000, which is slightly less than the tally of 85,000 that had been expected, on average, among economists polled by Briefing.com. Nonfarm private payrolls increased by 104,000, which is less than the consensus call for an increase of 117,000, but on par with the ADP Employment Change that was reported this past Wednesday. The latest weekly initial jobless claims count of 397,000 was not included in calculations, though it is worth noting that that tally marked the first time in a month that initial claims slipped below 400,000.
In all, the employment levels proved on par with weak-to-moderate economic growth. With that in mind, the Fed announced mid-week that it raised its long-run umemployment rate forecast to 5.6% from 5.4%. The Fed also cut its growth forecast for fiscal 2011 to the range 1.6% to 1.7% from the range 2.7% to 2.9%. For 2012, growth is expected the range from 2.5% to 2.9%, down from a range of 3.3% to 3.7% that had been previously projected.
In its most recent policy statement, the FOMC kept its target interest rate at 0.00% to 0.25%. It also stated that the Fed remains prepared to employ its tools to promote a stronger economic recovery and that it will continue to extend the average maturity of its securities holdings. At the European Central Bank's latest meeting, members decided to become more accommodative by trimming the key lending rate by 25 basis points to 1.25%.
Other data this week featured the October ISM Manufacturing Index, which declined to 50.8 from 51.6 in the prior month. It had been expected to improve to 52.1. As for the ISM Services Index, it came in at 52.9, which is less than the 53.9 that had been broadly expected.
Given the market's fixation on macro-related headlines, earnings were given secondary concern. Overall, results this week were generally better-than-expected. Pfizer (PFE 56.50, +0.39), Kraft (KFT 35.18, -0.60), MasterCard (MA 360.09, -6.50), and Qualcomm (QCOM 56.50, +0.39) were among the more major names that reported -- each exceeded what Wall Street had expected. Comcast (CMCSA 22.75, -0.57), ArcelorMittal (MT 20.31, -0.29), Kellogg (K 49.91, +0.00) and Marsh & McLennan (MMC 30.58, -0.19) were among the more widely held names that came short of the consensus estimate.
With earnings mattering little to market participants this week, stocks slid to a 2.5% weekly loss. That snapped four straight weeks of gains.
Amid the market's weakness, the dollar attracted buyers. For the week it climbed about 2.5% against a basket of major foreign currencies. Most of its strength came earlier in the week, when participants had dumped the euro amid all of the headlines out of the eurozone. The yen also slumped earlier this week. Its dive came after Japan's officials intervened in the currency in an effort to curb its strength. Just last week the yen set a post-WWII record high.
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Post by cyclops on Nov 13, 2011 12:42:59 GMT 10
Stocks finished the week on a strong note, booking gains of about 2%. The effort marked the fourth advance in five sessions.
A strong, broad bid at the open lifted the major averages to big gains in the early going. The move attracted additional interest, adding to early gains, before stocks set adrift in afternoon trade. From then out support remained steady.
Consumer discretionary plays scored the strongest gains with a 2.5% climb, thanks to leadership from Disney (DIS 36.70, +2.06), which set a multi-month high on the back of a better-than-expected quarterly report. The stock's strength also helped the Dow maintain a modest lead over its counterparts for the duration of trade. All 30 of its components closed in positive territory.
Telecom was the worst performing sector on Friday, but even it scored a 1.0% gain.
Bolstering buying interest was another rally by Europe's bourses -- in broad terms, the EuroStoxx 50 bounced 2%. Underpinning the performance is an increased tolerance for risk as the region moves forward with efforts to stabilize precarious fiscal and financial conditions, especially in Italy, where a new austerity plan is gaining momentum in the legislative process. Yields on Italy's debt were down for the second straight session.
The only dose of data today came from the University of Michigan, which posted its preliminary Consumer Sentiment Survey for November. The Survey improved to 64.2 from 60.9 in the prior month, although it had only been expected to come in at 61.3.
Limited economic releases and corporate announcements likely prevented many market participants from taking positions, effectively keeping a cap on share volume. It probably didn't help that the bond market stayed closed in observance of Veterans Day, keeping many traders away from their desks. Fewer than 800 million shares were traded on the NYSE today.
Such thin share volume may prompt the more cynical market watchers to question the conviction underlying today's climb, especially since each bid carries a greater relative weight on light volume days. Nonetheless, the S&P 500 booked its best single-session percentage gain since the end of October. For the week, stocks advanced almost 1% and are now marginally positive for the year.
Market participants had displayed a renewed tolerance for risk on Thursday, reacting to improved market conditions in Europe and news of a successful debt auction by Italy. Although the auction came at a cost, demand for the country's debt was taken by the market as a sign of confidence.
The only loss of the week was suffered on Wednesday, but it was the worst one-day percentage drop for the S&P 500 about three months. Many were spooked by the specter of contagion as Italy's debt yields climbed to record levels and the notion that Italy's economy is far too large to be aided by a bailout.
Concerns about Italy and its ability to establish a unified political front were also at play as the country looked to replace its prime minister, but stocks were still able to overcome those concerns and score strong gains.
Greece was in focus at the start of the week, when it was announced that Prime Minister Papandreou would step down from his post. Later in the week it was announced that Lukas Papademos will succeed him. Papandreou's resignation came after he had unnerved many officials, and markets for that matter, by proposing a referendum for the country's bailout package.
There wasn't a great deal of data earlier this week, but traders took note of the latest weekly initial jobless claims count, which totaled 390,000. That is less than than 400,000 claims that had been exected, on average, among economists polled and is also 10,000 less than the prior week total.
The trade deficit for September was also posted. It contracted to $43.1 billion from $44.9 billion in the prior month. A $45.9 billion deficit had been generally expected for September.
The Treasury also posted its budget, which had a deficit of $98.5 billion. A $105.0 billion deficit had been broadly expected to follow the $140.0 billion deficit reported for the prior month.
The pace of earnings announcements slowed this week. Among the more widely held names that reported, Cisco (CSCO 19.04, +0.43), Best Buy (BBY 28.09, +0.79), and General Motors (GM 22.51, -0.19) all bested expectations for the bottom line. Shares of GM cast a pall over its report by issuing a disappointing outlook, however.
There were a handful of debt auctions this week, but results were mostly mixed. The yield on the benchmark 10-year Note ended the week a few basis points above 2.0%.
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Post by cyclops on Nov 20, 2011 16:24:42 GMT 10
Stocks slogged along for almost the entire session. They ultimately finished flat. The lack of action made for an unexciting finish to the stock market's worst week in more than a month.
Premarket posture was positive. Participants responded to the stabilization of yields on the debt of such trouble spots as Spain and Italy, renewed strength in the euro, and a climb by Europe's bourses from their session lows. Buying in Europe eventually lost momentum, leaving the region's major averages to settle with varied losses.
An absence of follow through buying in Europe undermined this morning's improved tone. In turn, stocks slipped at the open of U.S. trade and never really established a direction of trade. Movement in the S&P 500 was partly limited because of resistance near 1225 and support at the weekly low just beneath 1210.
Consistent with trade earlier this week, stocks lacked a legitimate form of leadership. That said, financials managed to put together their best performance of the week by advancing 0.5% as a group. They still shed more than 5% for the week, though.
Tech stocks, which make up the largest sector by market weight, lagged once again. With a 0.7% slide the sector logged its third straight loss. Tech stocks collectively fell about 4% this week.
The expiration of monthly options likely added to the market's chop. Option-related trade helped inflate share volume on the NYSE in the absence of market-moving corporate news and economic data. Share volume on the Big Board still didn't break 1 billion, though.
Action on Friday made for a rather boring follow-up to the sharp losses suffered in the prior two sessions. Those back-to-back declines combined for a drop of more than 3%, which made up the bulk of the near 4% weekly slide suffered by stocks
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Post by cyclops on Nov 26, 2011 11:57:17 GMT 10
The major market averages ended lower as the Nasdaq paced the decline with a loss of 0.8%. Today marked the seventh consecutive close in the red for the S&P 500, during which the index has fallen 7.8%. Today's slide caps off the worst Thanksgiving week ever for stocks as the S&P 500 tumbled 4.7%.
Financials were the top performers today as the S&P 500 Financial Index gained 0.4% collectively. Citigroup (C $23.63, +$0.12) and Bank of America (BAC $5.17, +$0.03), two of the more heavily beaten down names in the space, saw solid gains.
Shares of AT&T (T $27.41, -$0.14) fell 0.5% after the company announced it was withdrawing its T-Mobile merger plan from further consideration by the Federal Communications Commission. The company announced it will first focus on receiving approval from the U.S. Justice Department which filed a lawsuit to block the merger. AT&T is setting aside $4 billion which it would need to pay T-Mobile's parent company Deutsche Telekom should the deal collapse.
Retailers underperformed despite today's excitement over Black Friday, the busiest shopping day of the year. The SPDR S&P Retail Index (XRT $48.50, -$0.48) lost 1.0% after running to a gain of 0.7% early in the session. Online retailer Amazon (AMZN $182.40, -$6.59) was one of the worst performers in the space, ending down 3.5%. Home improvement stores Home Depot (HD $36.47, -$0.05) and Lowe's (LOW $22.68, +$0.20) outperformed while electronics retailer Best Buy (BBY $25.63, -$0.08) slid into the red.
Commodities were mixed as precious metals sold off while energy traded flat to higher. After a brief run into positive territory gold ended the day down more than $10 near $1685. Silver, the more speculative of the precious metals, fell more than 2.5% to finish the day just above the $31 level. Crude oil ran to session highs near $97.50 before paring its gains and ending near $96 per barrel. Natural gas outperformed all session long, gaining 1.5% to $3.51.
Markets were closed on Thursday in observance of Thanksgiving.
Widespread weakness on Wednesday resulted in a broad-based sell-off that sent stocks to their lowest level in more than a month. The descent came as market participants, already feeling bearish, reacted to the Fed's decision to increase capital controls for banks. Participants remained pessimistic following underwhelming data from abroad and an in-line initial jobless claims report, mixed durable goods orders data, and a mixed reading on personal income and spending.
On Tuesday stocks overcame disappointment related to downward revision to third quarter GDP, but a loss of momentum left the major averages to roll over. Stocks managed to rebound because of a combination of technical support and a headline that the IMF has established a new liquidity line, but the effort still failed to give stocks a positive finish.
Market participants were put into a negative mindset at the start of the week by renewed concerns about financial conditions in Europe's periphery and core after Moody's issued cautious comments about France's debt rating outlook. Bias was also imbued by the inability of U.S. officials to look past partisan politics in an effort to address domestic fiscal conditions. Such discouraging themes came as many participants continued to reflect on a significant technical breakdown that took place late in the previous week
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Post by cyclops on Dec 4, 2011 11:40:49 GMT 10
The major market averages ended lower as the Nasdaq paced the decline with a loss of 0.8%. Today marked the seventh consecutive close in the red for the S&P 500, during which the index has fallen 7.8%. Today's slide caps off the worst Thanksgiving week ever for stocks as the S&P 500 tumbled 4.7%.
Financials were the top performers today as the S&P 500 Financial Index gained 0.4% collectively. Citigroup (C $23.63, +$0.12) and Bank of America (BAC $5.17, +$0.03), two of the more heavily beaten down names in the space, saw solid gains.
Shares of AT&T (T $27.41, -$0.14) fell 0.5% after the company announced it was withdrawing its T-Mobile merger plan from further consideration by the Federal Communications Commission. The company announced it will first focus on receiving approval from the U.S. Justice Department which filed a lawsuit to block the merger. AT&T is setting aside $4 billion which it would need to pay T-Mobile's parent company Deutsche Telekom should the deal collapse.
Retailers underperformed despite today's excitement over Black Friday, the busiest shopping day of the year. The SPDR S&P Retail Index (XRT $48.50, -$0.48) lost 1.0% after running to a gain of 0.7% early in the session. Online retailer Amazon (AMZN $182.40, -$6.59) was one of the worst performers in the space, ending down 3.5%. Home improvement stores Home Depot (HD $36.47, -$0.05) and Lowe's (LOW $22.68, +$0.20) outperformed while electronics retailer Best Buy (BBY $25.63, -$0.08) slid into the red.
Commodities were mixed as precious metals sold off while energy traded flat to higher. After a brief run into positive territory gold ended the day down more than $10 near $1685. Silver, the more speculative of the precious metals, fell more than 2.5% to finish the day just above the $31 level. Crude oil ran to session highs near $97.50 before paring its gains and ending near $96 per barrel. Natural gas outperformed all session long, gaining 1.5% to $3.51.
Markets were closed on Thursday in observance of Thanksgiving.
Widespread weakness on Wednesday resulted in a broad-based sell-off that sent stocks to their lowest level in more than a month. The descent came as market participants, already feeling bearish, reacted to the Fed's decision to increase capital controls for banks. Participants remained pessimistic following underwhelming data from abroad and an in-line initial jobless claims report, mixed durable goods orders data, and a mixed reading on personal income and spending.
On Tuesday stocks overcame disappointment related to downward revision to third quarter GDP, but a loss of momentum left the major averages to roll over. Stocks managed to rebound because of a combination of technical support and a headline that the IMF has established a new liquidity line, but the effort still failed to give stocks a positive finish.
Market participants were put into a negative mindset at the start of the week by renewed concerns about financial conditions in Europe's periphery and core after Moody's issued cautious comments about France's debt rating outlook. Bias was also imbued by the inability of U.S. officials to look past partisan politics in an effort to address domestic fiscal conditions. Such discouraging themes came as many participants continued to reflect on a significant technical breakdown that took place late in the previous week.
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Post by cyclops on Dec 10, 2011 18:49:50 GMT 10
Stocks closed out the week on a strong note, helping the broad market book another weekly gain. Europe remained the primary topic of trade.
Traders took early cues from Europe, where the region's major bourses bounced because of the focus on news that eurozone officials agreed to tighter fiscal controls and also to make funds available to the International Monetary Fund for use in the rapid deployment of the European Financial Stability Facility, rather than the challenge of establishing changes to the eurozone treaty. Given the dissension and dysfunction that has been displayed so often during recent months, the eurozone summit was generally regarded as a step in the right direction. That helped drive the EuroStoxx 50 more than 1% higher, but the euro only gained 0.2% to end the session at $1.338.
Reports of progress in Europe were complemented by encouraging inflation data from China, which reported sharp declines in both CPI and PPI for November. Domestic data featured the preliminary Consumer Sentiment Survey for December from the University of Michigan. It improved to a six-month high of 67.7.
Equities traded with strength amid the hope that the macro picture might improve because of Europe's efforts to shore up its precarious financial and economic conditions, while cooler inflation in China could mean that the country can curb inflation without sacrificing economic growth.
Although buying was broad based, financials spent most of the session out in front of the rest of the market. The sector settled the session 2.3% higher with help from banking plays and diversified financial institutions.
Industrials were slower in their ascent, but the sector also scored a strong gain of 2.2%. General Electric (GE 16.84, +0.53) was a leader in the space after the conglomerate announced a dividend increase that many took as a sign of confidence in cash flow.
Other corporate news was less encouraging. Both Texas Instruments (TXN 29.94, +0.02) and DuPont (DD 45.04, -1.48) cut their outlooks, but those reports were generally shrugged off by a market that remained fixated on the events in Europe.
The broadly positive bias displayed by stocks stayed intact all session, helping the major equity averages settle the session near their highs. Share volume may have been light, but stocks still cut prior session losses to give the S&P 500 a near 1% weekly gain.
The bounce on Friday helped stocks offset part of the prior session's slide, which was the worst one-day drop for the stock market in about two weeks. To little surprise, that decline was driven by a mosaic of headlines from Europe. Participants were hardly surprised that the European Central Bank (ECB) cut its target lending rate, but there was a negative response to news that the vote was not unanimous and that ECB became more cautious in its economic outlook. The tone certainly wasn't helped by the European Banking Authority report that capital shortfalls increased in their latest stress test.
News that the ECB will extend collateral eligibility to asset-backed securities was overshadowed, as was the latest weekly initial jobless claims tally. Initial jobless claims totaled 381,000, which is less than the 395,000 initial claims had been widely expected.
Mid-week trade kept stocks mired near the neutral line as participants were reminded about the headline risk associated with Europe when it was learned that analysts at S&P were focusing on the European Union's top-notch credit rating. Tuesday trade was lackluster amid an absence of economic data and material corporate announcements.
Action this week began with a solid gain on Monday, when traders took encouragement from a decline in the borrowing costs of Italy and Spain -- a tacit sign of increased confidence in the two countries -- after Italy unveiled a new austerity plan. It was also learned that the ECB intends to inject one trillion euros for use in additional bond buying. Reports that Germany's Merkel and France's Sarkozy were making concerted efforts to lead Europe through its crises were also taken positively, although analysts at S&P put Germany and France on "creditwatch negative," while also placing all 17 euro nations on ratings downgrade watch. Little was made of the November ISM Services Index, which eased to 52.0 from 52.9 in the prior month and failed to meet the consensus estimate of 53.4
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Post by cyclops on Dec 17, 2011 12:08:30 GMT 10
The stock market was bid higher in the early going, but for the second straight session its failure to overcome resistance resulted in selling that left the major averages to finish the week in relatively mixed fashion.
This morning stocks benefited from strong buying on above-average volume, which was inflated by quadruple witching options expiration. Another pullback in sovereign debt yields was regarded as a relatively tacit sign that confidence in the precarious eurozone periphery may have improved, at least for the time being. That notion also helped the euro, although the currency's early gain was eventually clipped.
Although Europe's bourses ultimately forfeited their gains to end the week on a down note, many there seemed unsurprised by the decision by Fitch to cut ratings on several of the continent's major financial outfits. Bank of America (BAC 5.20, -0.06) and Goldman Sachs (GS 90.10, -1.80) were included in that list, but financials still provided leadership. The sector settled with a 0.5% gain after retreating alongside the broad market.
The broad market had been up about 1% in the early going, but rolled over after it failed to push past a key pivot point. Interestingly, that point proved too much to overtake after the S&P 500 successfully cleared its 50-day moving average, which had been a challenging line in the prior session and in the opening minutes of trade on Friday.
The modest gain helped improve the stock market's weekly performance, but not by much. Stocks suffered a weekly loss of slightly less than 3%. They're also down about 3% year to date.
The inability to overcome resistance in the prior session also prompted participants to turn against stocks. Buyers had initially began to scoop up stocks after the broad market had tumbled for a cumulative loss of more than 3% during the course of only three sessions. Sentiment was strengthened amid a successful debt offering from Spain and news of improved eurozone manufacturing activity during December. Domestic data also provided encouragement in the early going, but it was eventually shrugged off.
The first three sessions of the week saw stocks average losses of about 1%. A lack of progress by Europe's leaders in restoring economic and financial conditions in both the core and periphery of the continent often hung over the minds of many traders. Those themes also implicated the euro; it dropped to an 11-month low near $1.29 on Wednesday before making a modest recovery in the back half of the week. The euro suffered a weekly loss of 2.6%.
Trade on Tuesday saw stocks advance in the early going, but inevitably rolled over as participants opted to sell after the Fed failed to offer any new sign that it may be considering the implementation of another round of quantitative easing. Instead, the Fed kept its target interest rate in the range of 0.00% to 0.25% and remained committed to extending the average maturity of its holdings, as had been widely expected.
The week began with participants discouraged by data that showed China, a key player in keeping the global economy afloat, experienced a slowdown in export growth during November. Concerns were also raised about the formidable task associated with the efficient implementation of plans established during the previous week's eurozone summit.
Corporate news was mixed this week. Dow component and semiconductor bellwether Intel (INTC 23.23, -0.08) disappointed investors at the beginning of the week by issuing a cautious outlook. Big box electronics retailer Best Buy (BBY 23.19, -0.17) posted earnings that came short of what Wall Street had expected. On the positive side of things, FedEx (FDX 84.89, +1.42) reported a better-than-expected bottom line, while Discover Financial Services (DFS 24.23, +1.16) posted an upside earnings surprise of its own. The company also increased its quarterly dividend. A strong quarterly report from Adobe Systems (ADBE 28.20, +1.74) proved pleasing to investors at week's end.
Data for the week featured retail sales numbers for November that featured a 0.2% increase in both total sales and sales less autos. Total sales had been expected to increase by 0.6%, while sales less autos had been generally expected to post a 0.5% increase.
The latest initial weekly jobless claims tally dropped to a 43-month low of 366,000. Economists polled had expected something closer to 390,000.
December readings for the Empire State Manufacturing Survey and the Philadelphia Fed Survey improved to 9.5 and 10.3, respectively. It was generally expected that the Empire State Manufacturing Survey would improve to 3.0 and that the Philly Fed Survey would improve to just 4.5.
Industrial production declined by 0.2%, which contrasted with the consensus call for a 0.2% increase. Industrial production last declined in April.
November price data were also posted this week. Overall producer prices increased by 0.3%, but core prices increased by 0.1%. Total consumer prices were flat, but core prices increased by 0.2%. All producer price measures and consumer price measures had been expected to increase by 0.1%. There was nothing unusual in the core data that suggests inflationary problems may be gaining traction as we head into 2012.
Precarious market conditions spurred above-average demand at the latest series of Treasury auctions. An auction of 3-year Notes drew a bid-to-cover of 3.62, dollar demand of $115.8 billion, and an indirect bidder participation rate of 39.1%. An auction of 10-year Notes attracted dollar demand of $74.1 billion on a bid-to-cover ratio of 3.53 and an indirect bidder participation rate of 61.9%. A 30-year Bond auction drew a bid-to-cover of 3.05, dollar demand of $39.7 billion, and an indirect bidder rate of 32.5%. By the end of the week the yield on the benchmark 10-year Note dropped to a two-month low just beneath 1.85%
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