Reply #89: So we're looking at these US closing numbers, and spiel: [View All]

[Ghost Dog]

Dow 12,650.36 Up 207.53 (1.67%)
Nasdaq 2,389.86 Up 40.86 (1.74%)
S&P 500 1,378.55 Up 22.74 (1.68%)
10-Yr Bond 3.6390% Down 0.0940
NYSE Volume 5,369,650,500
Nasdaq Volume 2,925,491,250

4:25 pm : On Thursday, the major indices were able to rally, despite opening sharply lower in the wake of a disappointing unemployment claim report. Sentiment was lifted due to a bond insurer's positive outlook. This is in contrast to Wednesday, when concerns over bond insurers caused the stock market to give up all of its FOMC induced gains.

The major indices finished modestly off their highs on a report released with five minutes left in the session that said Standard & Poor's put MBIA's (MBI 15.50, +1.54) credit rating on negative watch and downgraded FGIC to AA from AAA. Yesteday, Fitch cut FGIC's rating, so its downgrade was not surprising. S&P affirmed Ambac's (ABK 11.64, +0.79) AAA rating.

Despite the S&P report, the major indices still finished sharply higher, led by financials (+2.7%), retailers (+4.4%) and consumer discretionary (+3.4%). These three areas were the main laggards in 2007, and stand to benefit from the recent rate cutting cycle. The Dow, Nasdaq and S&P all closed 3.3% above their session lows.

Bond insurers weighed on sentiment in the early going after MBIA reported a larger than expected loss. MBIA said it had an operating loss of $3.38 per share in the fourth quarter, compared to a profit of $1.16 a year ago.

Sentiment then turned positve, as MBIA led financials and the broader market higher. MBIA's conference call, which lasted four hours, eased traders' uneasiness.

Specifically, the company acknowledged it will have significant losses, but nothing to justify the 80% decline in the share price since last year. The company said its capital plan will exceed all AAA rating requirements. It said a downgrade would impact capital by $100 million to $200 million in a worst case scenario. The company said it will not be forced into bankruptcy and that it is virtually impossible to imagine a situation where MBI would become insolvent.

In economic news, a Dept. of Labor report showed jobless claims for the week ended Jan. 26 jumped to 375,000 from 306,000. Economists expected 320,000 claims. Stocks opened sharply lower on the report. The knee jerk reaction was overdone, as one week does not make a trend, and Briefing.com expected claims to increase due to seasonal factors.

The Dept. of Commerce said December personal income rose 0.5% and spending rose 0.2%, which were mostly in-line with expectations. Separately, fourth quarter employment costs rose 0.8%, in-line with expectations.

All ten sectors closed higher. Energy (+0.3%) underperformed on a relative basis due to a 0.8% slip in crude oil prices. DJ30 +207.53 NASDAQ +40.86 NQ100 +1.8% R2K +2.6% SP400 +2.2% SP500 +22.74 NASDAQ Dec/Adv/Vol 966/2039/2.87 bln NYSE Dec/Adv/Vol 776/2384/2.19 bln

3:30 pm : The major indices climb to fresh session highs with the Dow now posting a gain of more than 200 points. Retailers are up 5.4%, financials are up 2.9% and consumer discretionary is up 3.9%.

Although stocks are looking to end the month on a high note, January has been a volatile and disappointing start to the trading year, with the Dow, Nasdaq and S&P down 4.9%, 10.0% and 6.3% yesterday. The following is the best and worst performing industry groups this month. Best: 1) Homebuilding +27% 2) Home improvement retail +14.5% 3) Education services +13.7%. Worst: 1) Consumer electronics -36.4% 2) oil & gas equipment -19.8% 3) home entertainment software -19.4%.

All sectors are in the red this year. Financials, the worst-performing sector in 2007, is outperforming on a relative basis with a 0.5% loss. Tech is the main laggard with a 12.4% loss.DJ30 +208.32 NASDAQ +41.35 SP500 +23.48 NASDAQ Dec/Adv/Vol 975/2001/2.14 bln NYSE Dec/Adv/Vol 831/2328/1.42 bln

3:00 pm : The stock market is trading near its best level of the session. Energy (-0.7%) has pared most of its losses in conjunction with crude oil (-0.9% to $91.52)

Reuters reports New York Gov. Spitzer said he and the state insurance superintendent were making "good progress" in creating a plan to help bond insurers. Both MBIA (MBI 14.72, +0.76) and Ambac (ABK 11.72, +0.87) are trading off their session highs.

Despite the Fed cutting interest rates by 125 basis points in the last two weeks, traders still expect more. Fed funds futures price a 68% chance of a 50 basis point rate cut on March 18, with the rest of the bets on a 25 basis point cut. The meeting is a long time away, so expectations may change substantially by then.DJ30 +155.75 NASDAQ +33.06 SP500 +18.29 NASDAQ Dec/Adv/Vol 1090/1884/1.91 bln NYSE Dec/Adv/Vol 941/2196/1.27 bln

2:30 pm : The major indices hit or reach their session highs before retreating a bit. The beaten down areas of 2007, financials (+2.3%), consumer discretionary (+3.0%) and retailers (+4.2%), are providing leadership. Those areas are also outperforming the broader market year-to-date.

Bank of America (BAC 43.99, +1.78), CVS Caremark (CVS 38.60, +2.58) and Wal-Mart (WMT50.49, +1.34) are the leaders among the 361 stocks trading higher in the S&P 500. Dow components Exxon Mobil (XOM 84.57, -0.76) and Merck (MRK 45.96, 0.74) are the main laggards.DJ30 +135.51 NASDAQ +28.91 SP500 +14.32 NASDAQ Dec/Adv/Vol 1098/1862/1.75 bln NYSE Dec/Adv/Vol 1026/2089/1.15 bln

2:00 pm : The stock market climbs near its session high after a new wave of buying interest. All sectors are seeing some interest, and there is notable strength within consumer discretionary (+2.6%) and financials (+1.9%).

During a question and answer session, MBIA (MBI 15.28, +1.32) said they could not be forced into bankruptcy. The company said it is virtually impossible to imagine a situation where MBI would become insolvent and go into a rehabilitation program in New York. DJ30 +107.38 NASDAQ +20.93 SP500 +11.20 NASDAQ Dec/Adv/Vol 1092/1821/1.59 bln NYSE Dec/Adv/Vol 1034/2075/1.08 bln

/... http://finance.yahoo.com/marketupdate/update (emphasis added)