Stocks really wanted to go up today & tried hard, but after digesting the FED's rate cut & what they had to say, sold off. Dow had been flirting with 13K & S&P 500 topped 1400, both important ceilings, but they could not keep the gains. In the last hour, Dow sold off about 175 to 12820. For the day, the averages ended slightly underwater although the internals were a little better with advancers a little ahead of decliners. For what it's worth, volume of 1.44B was slightly higher than in the recent past. The month turned out to be good. Dow was up more than 500 after a lousy start in Q1.
Markets were debating whether this is the end of rate cuts for awhile. Maybe. With low rates & more signs of inflation becoming a bigger problem, they can be expected to proceed cautiously on new rate cuts. "Rates on hold" is a new buzz phrase which seemed to be the thinking driving down stocks in the last hour of trading. For what it's worth, oil fell 2.17 to 113.46. But that remains high enough to drive gas prices up many more notches at the pump.
Starbucks (SBUX) was essentially even on down profits. I don't drink coffee but it's such a well known brand, hard to ignore it. CNBC had an excellent interview with Dr. Eric Schmidt CEO of Google (GOOG) sending the stock up 15.82. Check it out!
Wednesday, April 30, 2008
Stocks up before FED meeting
Stocks advanced before the FED meeting this PM. Dow was up 84 (helped by GM and P&G), advancers ahead of decliners 3-2 & NAZ was up 13. The Commerce Dept reported the US economy grew at a meager 0.6% rate in Q1 as housing & credit problems slowed consumers & businesses. This pace matched Q4 of 2007. While not defined as a recession, the economy continues to be stuck in a rut with modest growth. After yesterday's sharp fall, oil rose 60¢ to 116.23.
GM (GM) lost over $3B in Q1 on weak US sales. Excluding one-times charges, EPS was 62¢ beating analysts forecasts sending the stock up 1.93. Procter & Gamble (PG) reported excellent earnings from cost controls & price increases, the stock rose 2.10. Time Warner (TWX) reported lower earnings & decided to spin off its cable business. The stock dropped 11¢. Let's see what the FED meeting brings.
GM (GM) lost over $3B in Q1 on weak US sales. Excluding one-times charges, EPS was 62¢ beating analysts forecasts sending the stock up 1.93. Procter & Gamble (PG) reported excellent earnings from cost controls & price increases, the stock rose 2.10. Time Warner (TWX) reported lower earnings & decided to spin off its cable business. The stock dropped 11¢. Let's see what the FED meeting brings.
Tuesday, April 29, 2008
Stocks slip ahead of FED meeting
Stocks were down a little ahead of tomorrow's FED meeting. Dow was down 40, decliners ahead of advancers 3-2 while NAZ eaked out a gain of 2 as volume continues at a low 1.2B level. Merck (MRK) hurt the Dow, pulling back 4.30 after its new cholesterol drug was rejected by the FDA. Commodities which had been strong, pulled back today partially on recent strength in the dollar. Oil led the decline in commodities, down 3.12 to 115.63 after knocking on the 120 door just yesterday. Commodity declines help ease inflationary concerns.
Consumer confidence slipped again in Apr. The Conference Board said their Consumer Confidence index fell to 62.3 from 65.9 in the prior month (in line with expectations). This is another sign of a deteriorating economy. The FED meeting should give markets a sense of direction.
Consumer confidence slipped again in Apr. The Conference Board said their Consumer Confidence index fell to 62.3 from 65.9 in the prior month (in line with expectations). This is another sign of a deteriorating economy. The FED meeting should give markets a sense of direction.
More housing troubles
Sorry to report more ugly news. Masco (MAS), a member of the S&P Dividend Aristocrat list (paying higher divs year over year for around 40 years in their case), announced the housing slump is hitting them harder than formerly indicated. They are projecting EPS will fall to 50-65¢ down from from .85-1.15 in their former guidance, street forecasts had been looking for 1.03. This news sent the stock to the low 18's, down 8% at another new multi year low. Obviously their div is at risk.
Stocks continue mixed
Stocks continue mixed afraid to make a major move ahead of the FED's meeting. Dow is down 52, decliners over advancers 3-2 & NAZ down 9. Gloomy economic news has not been able to attract sellers in a big way. Foreclosures for homes more than doubled in Q1 compared with the prior year. The trend continues negative as the number is 23% ahead of the prior qtr. Home prices dropped 12.7% in Feb, the fast rate recorded. It's no secret, the housing slump is dragging on & promises to be with us for months.
Some company reports were better. MasterCard (MA) had a great qtr with profits more than doubling, stock up 22.53. Foreign business, up 30%, showed the greatest gains, although US business was also strong, up 9%, helped when I used my card. BP (BP), Europe's 2nd biggest oil producer reported profits were up 63% from higher oil prices. BP gained 3.07 & Royal Dutch Shell (RDS-B), Europe's biggest oil producer, also reported substantially higher earnings sending its stock up 3.77. Meanwhile Countrywide (CFC) reported another whopper loss which may result in Bank of America (BAC) reducing the price it's paying for the company, although CFC is down only fractionally today.
Some company reports were better. MasterCard (MA) had a great qtr with profits more than doubling, stock up 22.53. Foreign business, up 30%, showed the greatest gains, although US business was also strong, up 9%, helped when I used my card. BP (BP), Europe's 2nd biggest oil producer reported profits were up 63% from higher oil prices. BP gained 3.07 & Royal Dutch Shell (RDS-B), Europe's biggest oil producer, also reported substantially higher earnings sending its stock up 3.77. Meanwhile Countrywide (CFC) reported another whopper loss which may result in Bank of America (BAC) reducing the price it's paying for the company, although CFC is down only fractionally today.
Monday, April 28, 2008
Markets little changed ahead of FED meeting
Markets were little changed ahead of the FED meeting but the averages closed near the lows for the day. Dow dropped 60 in the last ½ hour & S&P closed near its lows in a range of only 8½ points. The internals were stronger with advancers leading decliners 3-2. Volume continues at 1.2B, near the lowest levels for the year. Morgan Stanley recommended selling big banks although Bank of America (BAC), on the right, was down only 12¢. There is a lot of mention that the purchases of Wrigley (WWY) & Ford (F) didn't stimulate more buying. The big picture story remains the same, everybody is watching for the 25 point rate cut & especially interested in what the FED says.
Oil had traded near 120, it closed at 118.75, up 23¢. Until the FED acts there may be more sideways trading.
Oil had traded near 120, it closed at 118.75, up 23¢. Until the FED acts there may be more sideways trading.
Stocks slightly up, again
Without clear signals & awaiting the FED's meetings on Tues-Wed, markets were only slightly up. Dow & NAZ were barely up while internals were better, advancers were 40% ahead of decliners. The FED is widely expected to cut their rate another 25 basis points but the wording on their follow-up statement will probably have more significance for the markets. Oil is nearing 120 once again while gas reaches another record, 3.60. Kirk Kirkorian is offering 8.50 for another 20M shares of Ford (F), up 73¢ to 8.43. Mars (love their candy) is offering $23B to buy Wrigley (WWY), up 14.50, with help from Berkshire Hathaway, Warren Buffet's company. Many times these offers for large blocks of stocks at premiums help boost the markets, not so today.
Stocks may be held back by an interview Warren Buffet had on CNBC where he said the recession may be more serious & longer lasting than some are predicting. Among other things, he's also worried that higher food & gas prices are pinching hard on consumers.
Stocks may be held back by an interview Warren Buffet had on CNBC where he said the recession may be more serious & longer lasting than some are predicting. Among other things, he's also worried that higher food & gas prices are pinching hard on consumers.
Friday, April 25, 2008
Stocks up a little
After one of those wobbly days, stocks generally finished up. Dow was up 43, advancers ahead of decliners 3-2 but NAZ was down 6 not helped by MSFT down 2 after its earnings announcement. Even with mostly sideways movement during the week, the modest rally in the last couple of days gave the Dow about 100 point gain for the week. Volume continues light at under 1.2B, one of the lightest days of the year. The Alerian Master Limited Partnership Index has been performing well recently, up 10 in the last couple of weeks.
Oil finished at 118.24 up 2.40 on worries about supplies, a common worry in recent days. Consumer confidence fell for the 5th month in a row, to the lowest level in 26 years. The last time it was this low, there was stagflation to worry about in 1982. Next week, the earnings season will begin winding down. So far, the markets have handled them well.
Oil finished at 118.24 up 2.40 on worries about supplies, a common worry in recent days. Consumer confidence fell for the 5th month in a row, to the lowest level in 26 years. The last time it was this low, there was stagflation to worry about in 1982. Next week, the earnings season will begin winding down. So far, the markets have handled them well.
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