|
Edited on Mon Feb-28-05 12:53 PM by RawMaterials
12:30PM : Renewed selling interest in equities, prompted by profit taking in energy stocks and a sell off in bonds, pushes the indices to their lowest levels of the session... The S&P Energy Index (-2.5%), which has soared nearly 22.0% in 2005 alone, has turned firmly negative over the last half hour as crude oil prices ($51.30/bbl -$0.19) have fallen... Extensive weakness in treasuries, subsequent to the resignation of Lebanon's government, has lifted yields on the 10-year note (-20/32) to 4.34%, rates not seen since late Dec. 2004, and also weighed on stocks...
Speculation of a large Euro/US trade running through a very thin market has also been cited as adding pressure to bonds...NYSE Adv/Dec 1277/1921, Nasdaq Adv/Dec 1053/1935
12:00PM : Major indices continue to sport widespread losses midday in the wake of mixed economic data, renewed inflation concerns and volatile oil prices despite strong M&A activity... Jan income fell a less than expected 2.3%, (consensus -2.6%) while personal spending was flat (consensus +0.1%)... However, the inflation indicator for consumer prices climbed 0.2% while the core PCE deflator rose 0.3%, the largest gain since Oct. 2001...
Feb Chicago PMI checked in at 62.7 (consensus 60.5), as both the production and new orders components rose to very strong 68.5 levels, but Jan new home sales dipped 9.2% to 1.106 mln (consensus 1.125 mln)... The latter has prompted profit taking in homebuilders (-1.3%) after last week's strong performance while investors overall have maintained a more cautious sentiment after the increase in a key measure of inflation... Biotech (-4.9%) has been the largest standout to the downside, and weighed on health care (-1.2%) and drug stocks (-0.5%), following Biogen Idec (BIIB 36.15 -31.13) and Elan Corp's (ELN 8.52 -18.38) voluntarily withdrawal of MS drug Tysabri...
Energy (-0.8%), which was strong early on as crude oil futures ($51.53/bbl +$0.04) neared $52/bbl, has since succumbed to some profit taking after it too is coming off a solid week of gains... Other areas under pressure have been airline, financial, materials, disk drive and semiconductor... Transportation (+0.8%), however, has been strong following Yellow Roadway's (YELL 58.97 -2.34) plans to acquire USF Corp (USFC 48.12 +9.30) for $1.37 bln while retail has found modest buying support now that Federated (FD 56.90 +0.11) has confirmed it will acquire May Dept. Stores (MAY 34.69 -0.66) for $11 bln...
Other M&A news includes Mylan (MYL 17.39 +0.45) has terminated its $4 bln agreement to buy King Pharmaceuticals (KG 9.48 -0.77)... Computer hardware and software have also posted modest gains... Meanwhile, all three of this morning's only worth earnings reports - Heinz (HNZ 37.91 +0.52), Nicor (GAS 37.36 +0.67) and TIF came in better than analysts expected, but downside guidance from Tiffany (TIF 30.26 -0.66) has pressured shares of the retailer... Treasuries have failed to benefit from this morning's mixed economic data as the 10-year note is now off 9 ticks to yield 4.29%, the benchmark's highest yields of the session... NYSE Adv/Dec 1570/1590, Nasdaq Adv/Dec 1259/1673
11:30AM : Still not much conviction this morning as weakness in biotech weighs on sentiment... Shares of both Biogen Idec (BIIB 36.06 -31.22) and Elan Corp (ELN 8.42 -18.48) have plummeted after the companies voluntarily withdrew multiple sclerosis (MS) drug Tysabri (which was cleared for marketing by the FDA in Nov.) following two serious adverse events - one patient died and another developed a serious central nervous system disease...
PDLI (-11.0%) has also fallen in sympathy while some rivals like TEVA (+6.9%), which markets a competitive Copaxone MS treatment, as well as SRA (+18.4%) and CHIR (+1.9%), have actually surged as Tysabri has been suspended until further notification... S&P Health Care Index -1.1%... ..DRG -0.4%...NYSE Adv/Dec 1569/1549, Nasdaq Adv/Dec 1255/1655
11:00AM : Market pares some of its losses and climbs to highs of the morning but still trades with a tinge of caution... Meanwhile, resurgence in M&A activity has helped minimize today's losses as strong balance sheets and confidence in management provide some modest support for equities... Federated Dept. Stores (FD 57.45 +0.66) has confirmed it will acquire May Dept. Stores (MAY 34.87 -0.48) for $11 bln...
Yellow Roadway (YELL 59.12 -2.19) has reached a definitive agreement to acquire USF Corp (USFC 48.18 +9.36) for $1.37 bln while reports suggest Qwest (Q 3.90 +0.04) is willing to revise its offer for MCI (MCIP 22.72 +0.12)... However, Mylan (MYL 17.44 +0.50) has terminated its $4 bln agreement to buy King Pharmaceuticals (KG 9.58 -0.67), but investors have applauded Mylan's decision as MYL shares have surged 3.0%...NYSE Adv/Dec 1508/1530, Nasdaq Adv/Dec 1253/1600
10:30AM : Stocks remain under pressure as Chicago PMI holds strong but new home sales fall... Feb Chicago PMI has checked in above the breakeven 50% mark for the 22nd consecutive month with a read of 62.7 (consensus 60.5), as both the production and new orders components rose to very strong 68.5 levels and employment rose 5 points to 57.7... The better than expected expansion in regional manufacturing activity should bode well for tomorrow's release of the ISM index (consensus 57.0)...
Jan new home sales, however, dipped 9.2% to 1.106 mln (consensus 1.125 mln) as the Dec gain was revised to 5.6% (from 0.1%)... The housing data, which are more volatile over the winter months, were reflected by an even wilder swing in pricing...NYSE Adv/Dec 1349/1619, Nasdaq Adv/Dec 1097/1634
10:00AM : Indices continue to sport modest losses early on as investors await another batch of economic data... Meanwhile, energy (+1.0%) continues to benefit from higher oil prices while semiconductor has extended last week's gains after the SOX (+0.6%) hit a new 2005 high on Friday and positive comments on Oracle (ORCL 13.22 +0.09) have given software a boost... Biotech (-4.2%), however has been hammered after Biogen Idec (BIIB 40.37 -26.91) and Elan (ELN 9.12 -17.78) pulled their MS drug Tysabri from the market...
Airline, transportation, financial, utility, homebuilding and materials have also been weak...NYSE Adv/Dec 1169/1362, Nasdaq Adv/Dec 1171/1334
9:40AM : Market shows little follow through, opening on a lower note, as inflation concerns resurface... While the underlying trends with regards to the Commerce Dept.'s earlier report were stable, Jan personal income and spending data were affected by monthly fluctuations... Jan income fell 2.3%, less than economists expected (consensus -2.6%), due to the downside of Microsoft's Dec dividend payment which left a 3.7% gain, while personal spending was flat (consensus +0.1%)...
More noteworthy was the inflation indicator (deflator) for personal spending, which climbed 0.2%, while the core deflator rose 0.3%, the largest gain since Oct. 2001, adding some interim inflation worries following the larger than expected Jan core PPI of +0.8%... At 10:00 ET, Feb Chicago PMI (consensus 60.5) and Jan New Home Sales (consensus 1125K) will be released...
9:15AM : S&P futures vs fair value: -1.8. Nasdaq futures vs fair value: -6.0. Expectations remain intact for stocks to open on a downbeat note... Still contributing to the modest weakness have been mixed economic data, downside guidance and and oil prices near $52/bbl
|