Stock Market Update-Updated: 09-Aug-10

Market Snapshot Dow 10686.56 +33.00 (+0.31%) Nasdaq 2299.47 +11.00 (+0.48%) SP 500 1125.51 +3.87 (+0.34%) 10-yr Note +00/32 2.82% NYSE Adv 2031 Dec 892 Vol 316 mln Nasdaq Adv 1559 Dec 993 Vol 830 mln

Industry Watch Strong: building products; homebuilding; apparel retailers; general merchandisers; communication equipment; integrated telecom; internet software and services Weak: computer hardware; diversified financial services

Moving the Market News flow is light and the economic calendar is empty ahead of the FOMC rate decision on Tuesday Dollar gains against euro Europe's major bourses climb and Asia's markets settle mixed

13:00 ET

Stocks Hold on to Modest Gains

Dow +33.00 at 10686.56, Nasdaq +11.00 at 2299.47,S&P +3.87 at 1125.51

[BRIEFING.COM] Stocks recently chopped their way to session highs, where they sported solid gains, but the move failed to hold amid a lack of leadership. 

A lack of domestic data ahead of tomorrow’s FOMC decision and a limited number of corporate announcements has left participants without any clear trading cues. In turn, action has generally been choppy and there hasn’t been any form of concerted leadership.

Tech stocks, the largest sector by market weight, struggled in the early going, but it has since made its way to a modest gain of 0.3%. However, Hewlett-Packard (HPQ 42.89, -3.41) remains under pressure following news of CEO Mark Hurd’s resignation amid sexual harassment claims. HP also issued upside guidance, which may have tempered the negative reaction to the loss of the company’s leader.

Financial stocks continue to trail. The sector is currently up just 0.1% as diversified financial services plays succumb to selling.

Telecom has been strong all session, but the sector’s lack of weight gives it little sway with the overall trade. Nonetheless, the sector is up 1.3% as Dow components AT&T (T 26.95, +0.41) and Verizon (VZ 29.98, +0.43) test their best levels of the past seven months.

Without any drivers to keep stocks propped up, the stock market has handed back some of its gains in recent trade. The overall mood remains moderately positive, though.

This session’s overall gains remain modest, but they are impressive in that they come in the face of a weaker euro. The euro has lagged the dollar all day and recently retreated to a fresh session low, where it now trades with a 0.4% loss against the greenback. In contrast, the yen remains strong, such that the currency is near its best levels of the past decade. Its strength weighed on shares of exporters in Japan’s Nikkei, which was the only major average in either Europe or Asia to log a loss.

 

12:30 ET

Stocks Ease Off of Highs

Dow +35.05 at 10688.61, Nasdaq +10.72 at 2299.91, S&P +3.84 at 1125.48

[BRIEFING.COM] Stocks have had some trouble holding steady at their recent highs. In turn, the major equity averages have started to hand back some of their gains. Stocks are still generally up modestly for the session, though.

While the broader market is up with mixed gains, airline shares are outperforming. The group, according to the Amex Airline Index, has ascended to a 2.0% gain.

12:00 ET

Broad Gains Take Indices to Session Highs

Dow +39.70 at 10693.26, Nasdaq +11.31 at 2299.78, S&P +3.88 at 1125.52

[BRIEFING.COM] Stocks recently worked their ways to session highs. The move was generally broad based as all 10 major sectors are in the green, but the stock market still lacks any clear form of leadership.

Nonetheless, recent gains come in the face of a stronger dollar. The greenback had dropped to multimonth lows last week, but it has worked its way to a 0.3% gain today.

Despite a seemingly positive tone to trade, volatility is up this session. Specifically, the Volatility Index has climbed 3%.

11:30 ET

HP Gets Hammered in High Volume

Dow +41.10 at 10694.66, Nasdaq +11.76 at 2300.23, S&P +4.48 at 1126.12

[BRIEFING.COM] Shares of computer hardware outfit Hewlett-Packard (HPQ 42.90, -3.40) are near the 52-week lows that they set this past Friday. Volume behind the weak price action has already surpassed 100 million shares, which is more than double the next highest volume total for any given session in the past year.

The high volume slide comes in response to news that HP's CEO, Mark Hurd, will resign amid sexual harassment claims. While some analysts argue that the culture of HP will remain strong, others are concerned that the loss of leadership will leave the company vulnerable. As a sign of strength, HP issued upside guidance following last week's close, which was also when news of Hurd's departure began to make its rounds.

11:00 ET

Telecom Climbs

Dow +33.46 at 10687.02, Nasdaq +8.57 at 2297.04, S&P +3.34 at 1124.98

[BRIEFING.COM] The broader market has chopped its way back to a modest gain, although there isn't much in the way of leadership at the moment.

While it lacks any real sway with the overall market, telecom has put together an impressive advance so that it is now up 1.1%. The sector's relative strength is underpinned by integrated telecom giants and Dow components AT&T (T 26.88, +0.34) and Verizon (VZ 29.93, +0.38). There are no news items surrounding the two stocks, but shares of the two companies are testing their best levels of 2010.

10:35 ET

Commodities Mixed as Dollar Remains Strong

Dow +14.69 at 10668.25, Nasdaq +6.45 at 2294.92, S&P +0.96 at 1122.60

[BRIEFING.COM] Strength in the dollar index has pushed most commodities to new session lows in morning trade. Overall, the CRB Index remains in positive territory, but well off today's highs.

September crude oil was trading near morning highs of $81.76 per barrel before quickly reversing around 9:00am back to the flat line of around $80.70. Currently, crude is trading 0.7% higher at $81.26 per barrel. September natural gas was having an uneventful morning, trading near the unchanged line. In recent action though, natural gas fell into the red around 9:30am ET and just hit new session lows of $4.41 per MMBtu. Natural gas is currently 1.6% lower at $4.40 per MMBtu.

Precious metals followed the energy market lower this morning, but gold is back near the unchanged line. Earlier this morning, less than two hours ago, gold initially dipped into negative territory and to new morning lows of $1201.40 per ounce, but rose back into positive territory within the hour and is currently up $1.60 at $1203.70 per ounce. Silver, on the other hand, fell around the same time, but posted larger losses, finally hitting morning lows of $18.26 per ounce. Silver has recovered a portion of its losses, but still remains in the red, down 0.9% at $18.31 per ounce.

10:00 ET

Major Sectors Undermine Early Action

Dow +5.26 at 10658.82, Nasdaq +3.03 at 2291.50, S&P -0.02 at 1121.62

[BRIEFING.COM] The stock market's choppy start has given way to a minor slide that has taken the Dow and S&P 500 down to the neutral line.

Tech stocks and financial stocks have been a negative influence in the early going and health care stocks haven't helped. The three sectors, which are the largest by market cap and represent almost half of the weight in the S&P 500, are all in the red.

Advancing Sectors: Telecom (+0.7%), Consumer Discretionary (+0.5%), Consumer Staples (+0.4%), Utilities (+0.3%), Energy (+0.2%), Industrials (+0.2%), Materials (+0.1%)Declining Sectors: Financials (-0.3%), Tech (-0.2%), Health Care (-0.1%)

09:45 ET

Slow Start

Dow +12.57 at 1066.13, Nasdaq +6.21 at 2294.68, S&P +1.36 at 1123.00

[BRIEFING.COM] The major equity averages are up just modestly at the moment. Underlying action is a bit mixed.

Financials are under an early bout of pressure. As such, the sector is down 0.3% amid weakness in diversified financial services plays like Citigroup (C 4.03, -0.04), JPMorgan (JPM 39.90, -0.54), and Bank of America (BAC 13.82, -0.14).

In contrast, retailers are solid. The group is up 1.1%, which has been enough to boost the consumer discretionary sector to a 0.8% gain.

09:15 ET

Market is Closed

 [BRIEFING.COM] S&P futures vs fair value: +4.70. Nasdaq futures vs fair value: +7.30.  Stock futures suggest that the week is set to make a solid start. The positive tone comes amid strong gains among Europe’s major bourses and solid advances by the Shanghai Composite and Hong Kong’s Hang Seng, though Japan’s Nikkei was weakened shares of exporters that were hurt by strength in the yen. Continued strength in the Japanese yen has the currency near its best levels of the past decade. In contrast, the euro is down against the dollar after setting a fresh three-month high this past Friday. Earnings season has started to slow, so there are fewer corporate headlines of consequence this morning. However, Hewlett-Packard (HPQ) has been thrown into the center of business media’s attention due to the resignation of company CEO Mark Hurd amid sexual harassment claims. Despite the ignominy of the situation, the company also came out with upside guidance. There hasn't been any domestic economic data put out this morning, so participants are putting their focus on the fact that tomorrow brings the the latest FOMC policy decision.

09:00 ET

Market is Closed

 [BRIEFING.COM] S&P futures vs fair value: +5.30. Nasdaq futures vs fair value: +7.50.  The dollar is up just 0.1% against a basket of major foreign currencies this morning. Most of the move comes at the expense of the euro, which has shed 0.2% to now trade at $1.325, which is just shy of the three-month high of $1.333 that was registered this past Friday. Meanwhile, the yen has made its way to almost 85.7 yen per dollar. That puts it just shy of the decade-high of 84.8 that was seen in November. In commodities trade, oil prices are up 1.0% to $81.50 per barrel during the first few moments of pit trade. Gold prices have gained just 0.1% to trade at $1205 per ounce.

08:35 ET

Market is Closed

 [BRIEFING.COM] S&P futures vs fair value: +5.60. Nasdaq futures vs fair value: +7.50.  U.S. stock futures continue to trade with relative strength. Meanwhile, Germany’s DAX is up 1.3% following news that the country’s exports for June increased a stronger-than-expected 3.8% month-over-month and its imports made a surprise 1.9% month-over-month increase. Given the size of the country’s economy, the data is thought to portend positive things for economic activity in Europe. Industrial stocks have seen the strongest response. The group is up 2.2% in the German bourse. In France, the CAC is up 1.6%. Oil and gas plays are its strongest as they climb to a 2.2% gain. Financials aren’t far behind; they are up 2.0%. Britain’s FTSE has made its way to a 1.5% gain. Broad-based buying has 95% of its holdings in positive territory and all 10 major sectors up markedly, but the best gains are coming from financials (+1.7%) and oil and gas plays (+1.6%). BP (BP) has been an individual leader amid broad market support and news that it continues to progress in its efforts to plug its problematic Gulf oil well.

In Asia, Japan’s Nikkei surrendered 0.7% as the yen climbed against the greenback back toward multiyear highs. Of the Nikkei’s major sectors, only utilities (+0.6%) and consumer services (+0.2%) advanced. In Hong Kong, the Hang Sang advanced 0.6%. Consumer goods stocks and consumer services plays were led by Li & Fung LTD and MTR Corp, respectively. Mainland China’s Shanghai Composite climbed 0.5%. Zhongjin Gold and Shandong Gold were primary sources of strength, but banking issues faltered as Industrial & Commercial Bank and Bank of China fell.

08:00 ET

Market is Closed

 [BRIEFING.COM] S&P futures vs fair value: +5.70. Nasdaq futures vs fair value: +7.80.  Stock futures are up markedly amid strength in Europe, where the major bourses are all up in excess of 1% following news that Germany’s June exports increased a stronger-than-expected 3.8% month-over-month and its imports made a surprise 1.9% month-over-month increase. There are no U.S. economic items scheduled for release today, but data picks up tomorrow with second quarter productivity figures, monthly wholesale inventories, and the FOMC rate decision. Corporate news flow is light, but many are still abuzz about the resignation of Hewlett-Packard(HPQ) CEO Mark Hurd. The company announced the resignation late Friday and simultaneously issued upside guidance.

07:26 ET

Market is Closed

 [BRIEFING.COM] S&P futures vs fair value: +3.80. Nasdaq futures vs fair value: +6.30.  

07:26 ET

Market is Closed

[BRIEFING.COM] FTSE...5408.22...+75.80...+1.40%. DAX...6339.65...+80.00...+1.30%.

07:26 ET

Market is Closed

[BRIEFING.COM] Nikkei...9572.49...-69.60...-0.70%. Hang Seng...21801.59...+122.80...+0.60%.

16:30 ET

Disappointing Jobs Report Drives Trade

Dow -21.42 at 10653.56, Nasdaq -4.59 at 2288.47, S&P -4.17 at 1121.64

[BRIEFING.COM] The week of August 6 began with plenty of promise, but disappointment over the July jobs led to a lackluster finish.

The stock market started the week with a 2.2% surge that saw it close above its 200-day moving average for the first time since June. Participants were encouraged by the latest ISM Manufacturing Index, which pulled back for the third straight month to hit 55.5 for July, but still exceeded the 54.2 that had been widely expected.

Midweek action was much more muddled. Participants digested a better-than-expected July ISM Service Index of 54.3, a worse-than-forecast 1.2% drop in June factory orders, a surprise decline in June pending home sales, and flat personal income and spending figures for June.

Some took hope that the job market was seeing improvement since the latest ADP Employment Change stated that private payrolls for July increased by 42,000 when only 25,000 additions had been expected. However, news that initial jobless claims for the week ended July 31 climbed more than expected to a three-month high of 479,000 weighed on sentiment.

Trade on Friday was mostly dictated by the government’s official monthly jobs report, which showed that 131,000 nonfarm payrolls were slashed in July. A sample of economists polled by Briefing.com had expected, on average, a more moderate decline of 87,000 jobs. Combining the worse-than-expected July jobs report and the downward revision to June data, nonfarm payrolls had their worst pair of payrolls reports in eight months.

Despite that development, the headline unemployment rate stayed at 9.5%, but that is because the labor force continues to shrink as discouraged job seekers suspend their efforts.

The dour data at the end of the week turned many participants into sellers, such that stocks were down as much as 1.6% Friday. That took the S&P 500 back below its 200-day moving average and encouraged a flight to safety the drove the yield on the 10-year Treasury Note as low as 2.81%, which is almost a 16-month low. A late rebound helped stocks move back above the 200-day average and book a less feeble finish.

Though the unemployment report removed an element of uncertainty from trade, it didn’t pull any players off of the sidelines. Plenty of retail investors remain cautious about returning to the stock market due to concerns about weakening economic conditions and the prospect of further market corrections. In turn, trading volume remains depressed.  Share volume on the NYSE didn’t even break 1 billion Friday and it averaged just 960 million this week. Prior to this week, the 50-day moving average on the Big Board stood at 1.3 billion shares.

Corporate earnings continued to come in above expectations, but their influence over broader trade remained negligible. Among the more widely held names to report this past week, Dow components Pfizer (PFE 16.24, +0.05) and Kraft (KFT 30.36, +0.70) exceeded earnings expectations, while MasterCard (MA 207.42, +5.79) had an upside surprise of its own. Consumer staples giant and Dow component Procter & Gamble (PG 60.02, +0.16) stood out for being one of the few notable names that missed Wall Street’s consensus earnings estimate.

European banks BNP Paribas and HSBC (HBC 53.08, -0.25) both reported strong earnings this week, while embattled energy giant BP (BP 41.33, +0.65) made progress toward permanently capping its leaking oil well in the Gulf.

Retailers reported same-store sales figures for July. The results were generally mixed, but retailers still finished the week 2.4% higher, collectively.

A 1.5% drop during the course of the past five sessions gave the greenback its ninth consecutive weekly loss. Such weakness has the dollar down 10% since its June high and at its lowest level in almost four months. The dollar’s decline has come amid concerns about a weakening U.S. economy.  Conversely, there has been a surge in the yen to a near 15-year high and a bounce by the euro to its best level in three months.

..Nasdaq 100 -0.1%. ..S&P Midcap 400 -0.2%. ..Russell 2000 -0.7%.

Source:Briefing