U.S. stocks confined themselves below the unchanged line throughout Wednesday's session after a Commerce Department report showed an unexpected decline in durable goods orders for February. The Dow declined 109.74 points or 0.88% to 12,423 and the S&P 500 Index receded 11.86 points or 0.88% to 1,341. Meanwhile, the Nasdaq Composite Index ended down 16.69 points or 0.71% at 2,324.
Notwithstanding Wednesday's weakness, the Nasdaq Composite held above its 50-day moving average of 2,310. It may be worth keeping an eye on the tech space, as it appears that some interest is building up in the space. The willingness expressed by the government as well as the central bank has definitely served to build confidence among market participants. In the near term, traders could bid up stocks on this newfound confidence.
Technology stocks, which have been laggards thus far, are looking for the right catalyst to take off. Once momentum is in place, it is adequate to carry the Nasdaq up on its road to recovery. Moves in some big names such as Apple (AAPL | news | PowerRating | PR Charts ), Amazon (AMZN | news | PowerRating | PR Charts ) and Research In Motion (RIMM | news | PowerRating | PR Charts ) could set the ball rolling for other tech stocks. Additional buying interest may arise from the end of the quarter marking up by money managers, as the first quarter draws to a close.
A bounce from the current levels is definitely a possibility. The moot point is whether the recovery is a long lasting and sustainable recovery. That depends largely on how the economy is responding to all stimulus measures and whether these measures translate to growth without stoking inflationary pressures.
Currency, Commodity Markets
Crude oil futures are edging up after seeing significant gains in the previous session. Currently, oil is trading up $0.63 at $106.53 a barrel after rising $4.68 to $105.90 a barrel on Wednesday.
Yesterday's run up in prices followed the release of the EIA's weekly oil inventory report and reflected bargain hunting following their recent sharp slide. The oil inventory report showed that crude oil stockpiles held steady at 311.8 million barrels in the week ended March 21st. Distillate and gasoline inventories declined 2.2 million barrels and 3.3 million barrels, respectively. The report also showed that refineries operated at 82.2 percent of their operable capacity last week, which represents a 1.6 percentage point decrease compared to the previous week. Gold futures, which rose $18.20 to $953.20 an ounce in the previous session, are currently trading down $1.70 at $952.50 an ounce.
Among the currencies, the U.S. dollar is showing some strength. The greenback is currently fetching 106.53 yen after it was worth 99.1905 yen at the close of New York trading on Wednesday. The dollar is currently valued at $1.5734 versus the euro.
Asia
The major Asian markets were mixed on Thursday, as some of the major markets in the region cringed on fears of an economic slowdown in the U.S. The Hong Kong, Indonesian, Malaysian and Singaporean markets closed higher, while the rest showed weakness.
Japan's Nikkei 225 average opened lower and saw incremental weakness in the morning. After snapping back some of its losses, the index closed down 102.05 points or 0.80% at 12,605.
Auto and technology stocks turned lower, weighing on the broader market. Real estate, paper and financial stocks also saw weakness. Oil, mining and steel stocks showed mixed sentiment.
Australia's All Ordinaries, which traded below the unchanged line for the better part of the session, recouped most of its losses in late trading. At the close of trading, the index was down 2.80 points or 0.05% at 5,419. Energy and other resource stocks helped to offset some of the negative sentiment generated due to weakness in most other sectors.
Hong Kong's Hang Seng Index gap-opened significantly lower, but it clawed back it losses in the afternoon session. Despite showing some volatility in the afternoon, the index closed up 47.21 points or 0.21% at 22,664. China-related stocks and property stocks revealed mixed sentiment, while utilities advanced in the session.
India's Sensex also remained below the unchanged line for most of Thursday's session. Recovering from an intra-day low of 15,869, the index closed down 71.27 points or 0.44% at 16,016. IT and technology stocks dragged the markets lower.
Europe
The major European markets are advancing on Thursday. The France CAC 40 Index is gaining 1.55% compared to a 1.71% advance by the German DAX Index, while the U.K.'s FTSE 100 Index is down 1.24%.
A report released by the GfK Institute showed that consumer climate in Germany improved in March. The consumer climate indicator for April is expected to come in at 4.6 points compared to 4.5 points for March. The economic expectations index rose 0.6 points to 15 points, while the income expectations index advanced more than 4 points.
U.S. Economic Reports
Among the economic reports released today, the Bureau of Economic Analysis' revised fourth quarter GDP report showed that the U.S. economy expanded at an annual rate of 0.6% in the quarter. The reading was in-line with the expectations of economists. In the third quarter, GDP growth was 4.9%.
The slowdown in fourth quarter growth was due to a downturn in inventory investment and decelerations in export, PCE and federal government spending. However, a slowdown in imports helped growth.
On a year-over-year basis, GDP growth was 2.5% in the fourth quarter, slower than the 2.8% growth in the previous quarter. The core personal consumption expenditure index rose at a sequential pace of 2.5% compared to 2% growth in the previous quarter. Meanwhile, the Labor Department said today that jobless claims declined 9,000 in the week ended March 22nd to 366,000 from the downwardly reading of 375,000 for the previous week. Economists had been expecting jobless claims to decline to 371,000 from the 378,000 originally reported for the previous week.
The less volatile four-week moving average increased to 358,000 from the previous week's revised average of 356,250. Continuing claims in the week ended March 15th increased to 2.845 million from the preceding week's revised level of 2.850 million.
Stocks in Focus
Oracle (ORCL | news | PowerRating | PR Charts ) may see some weakness after it reported that third quarter sales rose 21% to $5.35 billion, which however trailed the mean analysts' estimate of $5.42 billion The company's adjusted earnings of 30 cents per share, in-line with the consensus estimate. The company guided fourth quarter earnings to 43-44 cents per share and sales to grow 15%-19%. Meanwhile, Oracle lowered its new software licenses growth guidance to 10%-20%.
Paychex (PAYX | news | PowerRating | PR Charts ) could react to its announcement that its third quarter earnings increased to 39 cents per share from 33 cents per share in the year-ago period. Revenues were up 9.7% to $532.2 million. Analysts, on average, estimated earnings of 39 cents per share on revenues of $533.3 million.
Lennar (LEN | news | PowerRating | PR Charts ) is likely to move in reaction to its first quarter results. The company reported a first quarter loss of 56 cents per share, including a 38 cents per share charge, compared to a profit of 43 cents per share last year. Total revenues declined to $1.06 billion from $2.79 billion in the year-ago period. The Street estimated a loss of $1.07 per share on revenues of $1.13 billion.
Clear Channel (CCU | news | PowerRating | PR Charts ) may bounce back after it said a Texas state court judge ruled in favor of the company, forcing the banks funding its private equity predators to provide the necessary financing for the deal.
CKE Restaurants (CKE | news | PowerRating | PR Charts ) may come under pressure after it reported break-even results for its fourth quarter compared to earnings of 15 cents per share for the year-ago period. The company's recent quarter's earnings included an expense of 11 cents per share. Revenues declined 3% to $338.1 million. Analysts, on average, estimated earnings of 2 cents per share on revenues of $339.1 million.
Cnet Networks (CNET | news | PowerRating | PR Charts ) may react to its announcement that it will lay-off about 120 employees, as it strives to streamline its online media business. The company noted that the lay-offs represents about 4.4% of the company's labor force. CommScope (CTV | news | PowerRating | PR Charts ) could be in focus after it said it has signed an agreement to divest its minority interest in Andes Industries. The divestiture is being done to comply with the Department of Justice's dictate related to its impending merger of Andrew Corp. Andes has agreed to pay CommScope up to $16 million contingent on the occurrence of certain extraordinary events.
NuStar (NS | news | PowerRating | PR Charts ) may see some weakness after it said it intends to sell 4 million shares in a public offering. The issuance is based on a shelf registration it previously filed with the SEC.
Resource Connection (RECN | news | PowerRating | PR Charts ) could recede after it reported that its third quarter earnings declined to 19 cents per share from 26 cents per share, even as revenues rose 8% to $202.8 million.
Robbin Myers (RBN | news | PowerRating | PR Charts ) could move to the upside after it reported that its second quarter earnings increased to 47 cents per share from 23 cents per share last year. Revenues climbed 14% to $184.9 million. The consensus estimates had called for earnings of 43 cents per share on revenues of $180.2 million. The company also upwardly revised its earnings estimate for 2008 to $1.82-$1.92 per share from its previous estimate of $1.78-$1.88 per share.
Security Capital Assurance (SCA | news | PowerRating | PR Charts ) could come under pressure after rating agency Fitch downgraded the company's long-term issuer rating to "B-" from "BBB". Fitch also downgraded the insurer strength of XL Capital Assurance (XL | news | PowerRating | PR Charts ) to "BB" from "A."
Interesting Stock Trends
Rambus (RMBS | news | PowerRating | PR Charts ) had a good up-day yesterday after it was cleared by a U.S. District court in an anti-trust lawsuit filed by rivals Hynix Semiconductor and Micron Technology (MU | news | PowerRating | PR Charts ). Rambus was charged with patenting technologies that later became a standard in memory chips. The company's shares surged about 39% on Wednesday, closing at their highest level in about 2 years. The company could now charge royalties on these patents.
Prior to the move, the stock has largely been confined to a range of $23.50 to $15.80 ever since it declined sharply in early 2006. At current levels, it is challenging a long-term resistance level.
The resumption in the climb of oil prices has sparked interest in oil and oil services stocks. Apache (APA | news | PowerRating | PR Charts ), Devon Energy (DVN | news | PowerRating | PR Charts ) and Cimarex Energy (XEC | news | PowerRating | PR Charts ) have all built on their gains. Apache tested its mid-March highs, but closed shy of that level. A decisive break above this level could be positive for the stock.
Devon Energy is at an all time high and the upward move has been accompanied by heavy volume. Notwithstanding the global economic slowdown, the price of oil has managed to remain firm due to supply constraints and geopolitical tensions. The predictions that prices will remain elevated are likely to support this space.
For comments and feedback: contact editorial@rttnews.com Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
|
|
