09:15 ET: [BRIEFING.COM] Still a negative bias to pre-market trading. S&P futures are trading at 1288 which is four points below fair value while the Nasdaq 100 pre-market indicator is down 10.9 points. Today we'll see just how strong the current rally is as the markets have little in the way of positive news to drive buying on a Friday. Warnings yesterday from DELL, PALM and CIEN once again raise two important questions: 1) just where is the bottom of this economic downturn and 2) have equities priced in too much in light of recent reports on industrial activity. For the most part, things continue to look murky in the end markets of most sectors. Yet the market is a discounting mechanism which means it prices in roughly six to nine months ahead. If corporate earnings are going to be on the upswing within this time frame, the recent market rally may be justified. It's worth noting that as a rule, markets tend to get it right. This emphasizes the importance of trying to make sense of the market rather than "telling the market" where it should be headed. On a separate note, market monster Krispy Kreme (KKD 56.40) has announced yet another two for one split this morning.
08:45 ET: [BRIEFING.COM] Looks like a modestly negative tone in pre-market activity. S&P futures at 1288 trade four points under fair value while the Nasdaq 100 pre-market indicator is -8.6. International markets are mixed with Europe slightly higher while Asia closed down. A few key earnings reports last night are having an impact on pre-market activity. Wireless device maker Palm Inc. (PALM 7.05) issued sharply reduced guidance for its upcoming quarter. The company now sees revenues coming in at roughly half previous forecasts. As a consequence, a number of firms are out with downgrades on the name and sector peers are trading lower in sympathy. Separately, Dell Computer (DELL 25.88) reported first quarter earnings in line with consensus figures but issued a warning of its own for its second quarter. The PC maker now expects a 3% - 5% sequential decline in revenues. Today will be another test of the rally's staying power as the markets are lacking for positive catalysts to attract buying.
08:30 ET: [BRIEFING.COM] S&P futures 1290 -1 or one point under fair value. Nasdaq 100 Pre-market indicator -6.2 points. Trade deficit for March just reported at $31.17 billion trade deficit; larger deficit than consensus estimate and larger than the prior month.
08:20 ET: [BRIEFING.COM] S&P futures 1290 -1 or one point under fair value. Nasdaq 100 Pre-market indicator -5.4 points. Markets modestly lower behind last night's earnings warnings.
07:30 ET: [BRIEFING.COM] This morning's fair value figures -- S&P 500 fair value: 1291; closed even with fair value. Nasdaq 100 fair value: 1932; closed 6 pts below fair value. Current indications: S&P 500 futures are -4, or 4 pts below fair value. Nasdaq 100 is -10.5, or 16.5 pts below fair value... Negative earnings guidance issued last night by Agilent, Dell, and Analog Devices weighing on the futures; France's Alcatel (ALA) slumps 6% on NYT report that company is in talks to acquire troubled Lucent.
06:17 ET: [BRIEFING.COM] S&P futures trading at 1289, 2.0 points below fair value, Nasdaq 100 futures trading at 1925, 93.0 points over fair value. The 30-year bond is up 3 ticks at 5.755%. The dollar is beating up on both the yen and the euro this morning.
06:16 ET: FTSE +0.38%, DAX +0.21%: [BRIEFING.COM] European stocks higher despite a slide in shares of Alcatel on the back of news that Europe’s fourth largest phone-equipment maker is in advanced talks for a $40 bln takeover of Lucent Technologies. Shares supported by strong gains in the energy sector following President Bush’s new energy plan and strong first quarter profits from TotalFinaElf, Europe’s largest refiner.
06:16 ET Nikkei -0.24%, Hang Seng -1.31%: [BRIEFING.COM] Asian stocks mostly lower with Japan hit by uncertainty surrounding changes to the Morgan Stanley Capital Index (MSCI) to be announced this weekend. NTT still plagued by weak earnings and expectations that its low free float (shares available for trading) will force a cut in the company’s MSCI weighting. Korea’s Kospi closed 0.7% higher, boosted by better foreign buying and hopes that Pohang Iron & Steel will see its MSCI weighting increased. Taiwan hit by an underperformance of banking stocks amid concerns about bad loans, while Singapore fell on growth concerns and Hong Kong was hurt by its small overall free float.
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Close Dow +32.66 at 11248.58, Nasdaq +27.25 at 2193.69, S&P +3.50 at 1288.49: [BRIEFING.COM] Today's gains paled in comparison to yesterday's gains, however, investors have reason to be just as pleased with the market's performance... That's because the follow through seen today is just the type of action that is necessary to foster the belief that the recent rally is for real... First, it occurred on heavy volume... Second, there was a willingness to buy the dips.... And third, the participation was broad-based... It is factors such as those that will ultimately prompt the shorts to cover their positions and draw the sidelined cash of retail investors back into the fray... Speaking of retail, that was one of the market's best performing groups today as it rallied on the heels of better than expected earnings news from Ann Taylor (ANN +1.59), and Kmart (KM +0.45), as well as an expectation that the economy, and earnings prospects, will be improving in the latter half of the year... A 0.1% increase in the index of Leading Indicators in April helped fuel that positive view as that was only the third increase in the last 12 months... That understanding was an added source of support for the market that ignited an early rally in the market... Better than expected earning from CIENA (CIEN -2.15) and Hewlett-Packard (HWP +3.96), solid gains in overseas markets, and Citigroup's (C -1.10) $12.5 bln acquisition of Bannaci, Mexico's No. 2 banking group, also provided ammunition for the bulls in the early-going... The initial surge, though, created an overbought condition that was greeted with selling activity that left the indices near unchanged shortly before mid-day... The market was quick to rebound, and by 13:30ET, the major indices were all trading at new session highs... The catalyst for the early-afternoon uptick was the Nasdaq's penetration of the 2200 level... Conversely, its inability to hold above 2200 prompted an afternoon retreat... Nevertheless, selling efforts were held in check throughout the session as a solid showing from the retail, biotech, cyclical, and energy-related issues provided some important support... The latter stocks started to run after President Bush delivered an energy plan whose main provisions were increased drilling, conservation, and a call for more reliance on coal, oil and nuclear power... The laggards of note today were many of the groups that have often been considered to be defensive in nature (i.e. food, beverage, HMO, insurance, telephone, and household products)... SOX +2.0%... XOI +0.5%... BTK +6.6%... Nasdaq 100 +1.4%... S&P Midcap 400 +1.5%... Russell 2000 +1.5%... NYSE Adv/Dec 1879/1203... Nasdaq Adv/Dec 2392/1432. |
