Reply #43: 10:39 EST numbers and blather [View All]

[UpInArms]

Dow 11,199.61 -39.94 (-0.36%)
Nasdaq 2,353.19 -6.56 (-0.28%)
S&P 500 1,306.99 -4.57 (-0.35%)
10-Yr Bond 4.880 +0.41 (+0.85%)

NYSE Volume 562,181,000
Nasdaq Volume 536,081,000

10:30 am : Selling has increased and is especially affecting blue chips. Merck (MRK 34.40 -1.59) is the primary culprit behind the Dow's decline. At this point, that stock has dropped more than 4%, following the latest Vioxx verdict. A split jury found Merck's drug responsible for one of the two heart attacks involved in the trial, and awarded $4.5 million before punitive damages. More importantly, the decision paves the way for other plaintiffs, who were long-term Vioxx users, to press their cases against Merck. While Merck is the muscle behind the Dow's decline, it's not the only sore spot. Of the 30 constituents, only six are trending higher. 3M (MMM 80.60 +3.14) is the best source of support, following its upped Q1 guidance. Industrial peer Boing (BA 79.81 +0.70) has also lifted, due to news that it's won a $1 billion order from Spain's Air Europa. News from those two companies underpin the Overweight rating on the Industrial sector that we continue to hold. DJ30 -28.90 NASDAQ -4.45 SP500 -3.74 NASDAQ Dec/Adv/Vol 1564/1090/475.5 mln NYSE Dec/Adv/Vol 1699/1139/342.1 mln

10:00 am : The market remains modestly lower. The Energy sector is providing some support with its 0.7% gain, but that advance is offset by losses levied by seven other sectors. Telecom (-1.0%) is currently faring worst, but it's the Financial sector (-0.4%) that is weighing most heavily. Rate-sensitive areas of the market are facing selling, and they reflect traders' caution ahead of tomorrow's jobs data. The Treasury market, on the other hand, is improving. Yields are ticking lower, largely to the credit of a rally in the Euro zone. That factor is supportive for the stock market, and is helping to keep selling pressure in check. It will be interesting to see if the improvement persists as attention to the impending jobs data increases. DJ30 -10.81 NASDAQ -1.31 SP500 -1.71 NASDAQ Dec/Adv/Vol 1416/1104/305.9 mln NYSE Dec/Adv/Vol 1540/1139/212.0 mln

09:40 am : As futures trade had foreshadowed, the equity market started the session in the red. There are a few factors that are discouraging buyers. First, retailers' March same-store sales data has been relatively disappointing. Apparel retailers and specialty stores were amongst the worst faring, and many are attributing their weak showing to the calendar as Easter falls later this year than last. Discounters did relatively better, with Costco (COST) the brightest amongst them. Second, Merck (MRK) was found liable for a heart attack in its latest Vioxx suit. A split verdict awarded $4.5 million, before punitive damages, to one plaintiff; for the the other co-plaintiff involved, Vioxx was not blamed. Third, crude is again pushing $68 per barrel, and is in focus in light of reports that Iran could face U.N. sanctions after two security council warnings on nuclear activity. Depite these negatives, selling is contained at this point. There are also a few reasons for that. Treasury yields are improving, 3M (MMM) upped its guidance, Boing (BA) won a Spanish contract, and Bed Bath & Beyond (BBBY) delivered better than expected earnings, solid same-store sales, and raised its full-year forecast.DJ30 -9.85 NASDAQ -1.53 SP500 -1.94