Reply #59: 12:22 EST - here's the nooner [View All]

[UpInArms]

Dow 10,357.46 +9.36 (+0.09%)
Nasdaq 2,071.98 +1.68 (+0.08%)
S&P 500 1,188.07 -2.03 (-0.17%)
10-Yr Bond 4.477 -0.12 (-0.27%)

NYSE Volume 932,111,000
Nasdaq Volume 656,448,000

12:05PM: Fixated upon inflation fears of late, traders found no relief this morning. While a large rise was expected after energy prices soared 7.1% in the month following Hurricane Katrina, Sept. PPI increased a more than expected 1.9% (consensus +1.2%) - more than tripling the Aug. read and rising most sharply since 1990. The core rate, which excludes food and energy and is arguably a more accurate inflation indication, was up 0.3% (consensus +0.2%) over last month's flat read. While one month does not make a trend, the uptick raises modest concerns that broad-based inflationary pressures are building. At the same time, recently released Sept. core CPI data has already shown investors that inflation remains contained at the consumer level, and has perhaps helped to counter today's PPI headlines. Inflation concerns have essentially challenged third quarter earnings reports for the session's spotlight. As usual, about 65% of reporters are beating estimates and have extended some support today; however, an overall lack of leadership leaves the indices vacillating around the unchanged mark, and keeps eight of the ten economic sectors in the red. Technology's 0.3% gain is thus far the session's best, and is driven largely by strength in IBM (IBM 84.01 +1.42) due to its upside earnings report - the tech titan beat estimates by $0.13 per share - delivered after yesterday's bell. Intel's rise (INTC 23.89 +0.43) ahead of its report, due to hit the post-close wires, pairs with IBM in offsetting broad-based selling pressure and particular earnings-induced weakness in Novellus (NVLS 21.50 -3.39). Healthcare has kept its nose above the flat line, pushed largely by the recovered Amgen (AMGN 76.93 +1.53). Wide-spread selling has affected that sector as well, with especial weakness in medical equipment stunting its advance. After Johnson & Johnson (JNJ 63.85 +0.85), which trends negative after reporting EPS a penny ahead of expectations but on light revenues, indicated it's considering alternatives to its Guidant (GDT 64.77 -7.61) acquisition agreement, GDT shares have plunged and weigh heavily upon the sector. Genzyme (GENZ 70.25 +0.93), however, helps offset Guidant's effect within the space after delivering a better than expected Q3 report. With respect to the deluge of upside earners, 3M (MMM 74.86 +2.39), United Technologies (UTX 50.56 -0.55), and Merrill Lynch (MER 61.60 +0.51) are amongst the most notable, but their effects have been somewhat muted by traders' focus upon inflation for the time being. Separately, the session's leading laggard is the Energy sector, off 1.4% alongside declines in energy prices that followed reports that Tropical Storm Wilma's path has headed away from the refinery-rich Gulf Coast.NYSE Adv/Dec 1090/1987, Nasdaq Adv/Dec 1142/1616