Reply #45: Closing Numbers and Blather [View All]

[RawMaterials]

Dow 10442.87 -13.15 (-0.13%)
Nasdaq 1991.06 +0.84 (+0.04%)
S&P 500 1171.42 -1.11 (-0.09%)
10-Yr Bond 4.591% -0.16

NYSE Volume 1,721,785,000
Nasdaq Volume 1,657,807,000



Close: The indices opened higher, amid upbeat corporate news and waning inflation fears, and traded in positive territory most of the day until pre-holiday uncertainty prompted some late-day profit taking... As volumes tailed off during the last half hour of trading, both the Dow and the S&P edged below the flat line, as the latter failed to celebrate its five-year, all-time high (1527.46) anniversary with an uptick... Increased earnings guidance from GE and NOC provided an early floor of support for equities that hinted at better than expected profits in a rising interest rate environment...

General Electric (GE 35.76 +0.26) raised Q1 EPS guidance to $0.37-0.38 while Northrop Grumman (NOC 53.66 +0.88) raised FY05 guidance and boosted its quarterly dividend 13%... But GE had the largest impact on overall market sentiment as a 0.7% rise in its share price subsequently helped it reclaim the lead from ExxonMobil (XOM 59.00 -1.09) as the world's largest company by market cap... Meanwhile, there were a couple of economic reports that also played a role underpinning a positive tone that helped virtually every sector finish to the upside...

But while headline reads on the reports initially appeared disappointing, they were not inadequate in a way that altered economic perceptions... Feb durable orders grew a less than expected 0.3% (consensus +0.8%), following a revised 1.1% decline in January, and fell 0.2% excluding the volatile transportation component, still indicative of strong underlying trends but also showing a modest slowdown in business spending and economic growth...

Also easing inflationary pressures was an unexpected 3K rise in weekly jobless claims to 324K (consensus 315K), lifting the 4-week moving average to nearly 322K (from 318K last week) but a level that is still consistent with non-farm payroll gains of 200K or more... Crude oil futures ($54.84/bbl +$1.03), while swapping stages of influence with bond yields over the last few weeks, arguably had a minimal impact on the market throughout most of the day as eyes remained fixated on whether or not Treasurys would move aggressively in either direction during a shortened trading session (bond market closed at 1:00 ET)... But the 10-year note was off just 1 tick to yield 4.58%...

Oil prices opened higher following an explosion at one of BP PLC's (BP 61.82 -0.19) largest refineries but was under modest pressure throughout the session after natural gas inventories fell less than expected... However, gasoline futures still hovered near record levels, as the explosion at BP's facility heightened concerns about available supplies heading into the peak summer driving season... Energy, despite the 1.0% rebound in oil still closed lower, while Airline (-1.7%) took it on the chin amid higher oil and renewed bankruptcy worries at Delta Air Lines (DAL 4.07 -0.13) due to rising fuel costs...

Homebuilding (+0.9%), however, was strong all day, getting an additional boost after Feb new home sales climbed to their second highest level, surging ever 9.4% to a 1.226 mln annual rate (consensus 1.150 mln)... Other interest-rate sensitive areas, like Utility (+1.2%) and REITs (+0.3%) also traded higher while Financial (+0.4%) faltered into the close... While Consumer Discretionary finished slightly higher, gains were minimized by a sell off in shares of Sears (S 50.04 -6.76), which gained shareholder approval for Kmart's (KMRT 132.52 +7.69) acquisition of the struggling retailer...

Separately, the dollar strengthened against the euro (1.2945) for the sixth consecutive session - its longest winning streak in more than a year - amid the possibility of more aggressive Fed tightening and found additional support against the yen (106.31) following a government report that showed Japanese manufacturers grew more pessimistic in Q1...DJTA +0.3, DJUA +1.5, DOT -0.4, Nasdaq 100 -0.1, Russell 2000 +0.5, SOX +0.3, S&P Midcap 400 +0.2, XOI -0.1, NYSE Adv/Dec 1985/1320, Nasdaq Adv/Dec 1633/1413