10:40 ET Dow -27, Nasdaq -7, S&P -4.27: [BRIEFING.COM] Indices coming under heavy pressure over last 15 minutes on April New Home Sales data, which was much worse than expected. Figure was 894 K, firmly below the consensus of 975 K. The slide in April was the biggest drop since April 1997. The housing market had been surprisingly resilient given rising unemployment; the sharp decline in April is the first hint that the consumer is finally feeling the pressure of rising layoffs and reduced job security. Homebuilders off sharply from highs early in the session...3M (MMM 118.50 -2.14) taking a dive after the appearance of CFO at a Salomon conference. Briefing.com hearing that a wire is running headlines that the company sees no improvement in weak business conditions, but we have been unable to confirm that...Chips and chip equipment stocks have weakened considerably. NYSE Adv/Dec 1163/1481... Nasdaq Adv/Dec 1535/1528.
10:00 ET Dow +35, Nasdaq +14, S&P +3.24: [BRIEFING.COM] Encouraging first 30 mins of trading on the Nasdaq on a combination of strong internals as well as a strong technical bounce off recent previous high of 2232....Senator James Jeffords officially switches parties to become an Independent tipping the Senate to the Democrats. Bush-friendly groups are mixed such as oil, tobacco, HMOs....Techs continue to provide leadership, especially storage stocks. Seeing interest in QLogic (QLGC 57.81 +2.06) and Emulex (EMLX 44.90 +2.18). Chips are mixed with TriQuint (TQNT 21.26 -3.55) under heavy pressure after guiding down numbers...Biotechs open the session strong. UBS Warburg initiating coverage of GLFD, CEPH, NBIX and CTIC with Buy ratings. NYSE Adv/Dec 1268/1124... Nasdaq Adv/Dec 1588/1206.
09:45 ET Dow +34, Nasdaq +1, S&P +1.32: [BRIEFING.COM] A slightly higher open for the cash market with the tech-heavy Nasdaq continuing to outperform...Seeing early interest in biotechs, banks and CLECs. Techs are mixed with networkers and storage stocks showing the most strength...New Home Sales Report for April due out at 10ET....Enterprise software stocks under early pressure on comments from CIBC World Markets that BMC is seeing more competitive threats from HWP and Tivoli. Speaking of HWP, stock not being affected by negative comments from Bernstein about its near term UNIX business.
09:15 ET: [BRIEFING.COM] S&P futures, at 1291, are flat with fair value; Nasdaq Pre-Market Indicator +7.14... Accordingly, expectations for a mixed to modestly positive open for the cash market remain intact...Wireless chipmaker TriQuint (TQNT 24.81) under heavy pressure after guiding down numbers in its mid-qtr conference call after the bell. Dain Rauscher downgrading the shares...Look for paper stocks to be under pressure as Salomon Smith Barney is downgrading four paper stocks: IP, BCC, MEA, TIN...With housing having been the strongest leg of the economy, the 10 ET report on New Home Sales for April will be closely watched. Briefing.com expects the incredibly strong pace to soften only modestly.
08:50 ET: [BRIEFING.COM] Current expectations are for a modestly positive beginning for the cash market. S&P futures at 1292, trade one point above fair value while the Nasdaq 100 pre-market indicator is +8. Market is looking to recoup losses from yesterday even without much of a catalyst on this relatively quiet pre-market session....Merger in the oil drilling space as Pride Intl (PDE 32.65) is off $4 on news it will join forces with Marine Drilling (MRL 27.72) in a $6.2 bln deal...Retailers grabbing most of the headlines with generally positive news. Visit Briefing.com's Short Stories for more detail. Lehman upgrading Gap Inc (GPS 32.43) to Strong Buy from Buy...Initial jobless claims for the week ended 5/19 rose 15K to 407K (consensus 390K)....Overnight, the euro fell to a 6-month low against the dollar and a 5-month low against the yen due to reports of weaker-than-expected growth in Germany and France. At the same time, rising inflation may prevent the ECB from cutting rates.
08:30 ET: [BRIEFING.COM] S&P futures +3, or 2 pts above fair value; Nasdaq 100 pre-market indicator +14. Retail stocks continue to be the main story for this quiet pre-market.
08:05 ET: [BRIEFING.COM] S&P futures +2, or 1 pt above fair value; Nasdaq 100 futures +12, or 7 pts above fair value. A number of retail apparel stocks reporting, but overall a quiet pre-market.
07:20 ET: [BRIEFING.COM] This morning's fair value figures -- S&P 500 fair value: 1291; closed 1 pt below fair value. Nasdaq 100 fair value: 1963; closed 5 pts below fair value. Current indications: S&P 500 futures are +1, or even with fair value. Nasdaq 100 is +8, or 3 pts above fair value... M&A activity in the oil patch (PDE/MRL) the big story of the morning; could provide a lift to oilfield drilling/services stocks; quite on the research front.
06:12 ET: [BRIEFING.COM] S&P futures trading at 1293.90, 2.9 points over fair value, Nasdaq 100 futures trading at 1975, 12.0 points over fair value. The 30-year bond is up a tick at 5.796%. The dollar is weaker against both the yen and the euro.
06:12 ET: FTSE +0.72%, DAX +0.88%: [BRIEFING.COM] European stocks mostly higher. Recent growth concerns somewhat pacified by strong Italian consumer confidence Vodafone boosted by Lehman Brothers’ suggestion that next Tuesday’s earnings will come in at the high end of expectations. HSBC also helped by Goldman Sachs’ upgrade to market outperform from market perform. Prudential shares supported by UBS Warburg upgrade to strong buy from buy.
06:11 ET Nikkei -1.22%, Hang Seng -0.21%: [BRIEFING.COM] Asian stocks mostly lower. Technology hit by Nasdaq underperformance. Nikkei down for the third straight session with help from the recent strength in the yen. Semiconductor stocks throughout the region under pressure on the back of the bearish report from U.S.-based trade group Semiconductor Equipment and Materials International (expects chip equipment sales to fall 27% this year). Foreign buying helped Taiwan to buck the regional trend. Interest linked to expectations of another round of government intervention.
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Close Dow -151.73 at 11105.51, Nasdaq -70.35 at 2243.50, S&P -20.33 at 1289.05: [BRIEFING.COM] The markets gapped down at the open and never really looked back. In light of recent equity strength, the pullback wasn't surprising. Yet the way the markets dropped leaves room for additional downside. The indices closed near the day's worst levels and the Nasdaq modestly broke below support in the 2250/2255 area. The one silver lining in today's session was that total volume traded came in on the light side... An unusual development in the political arena contributed to equity weakness. This morning, Senator James Jeffords of Vermont confirmed he will be leaving the Republican party to become an independent. He also announced he will vote for Democrat Tom Daschle for Majority Leader. Though this leaves the status of individual committee chairmanships unclear, Daschle as Majority Leader means Democrats would control the timing of votes on the Senate floor. The shift in power is not necessarily conclusive, however, as Republicans have been trying to entice Georgia Democrat Zell Miller to switch to the GOP... Contributing to broad-based technology weakness was the release of the semiconductor equipment book-to-bill ratio. April's number came in at 0.42 which represents a sharp decline from the prior month reading of 0.59. A book-to-bill of 0.42 means for every $100 of orders fulfilled only $42 of new orders were generated. A reading under 1.0 raises a red flag, but a 0.42 reading signifies genuine weakness. Merrill Lynch estimates the consensus expectation for April's book-to-bill had been 0.55 which suggests the data may not have been priced into equities in that sector. The semiconductor index or SOX dropped 5.0% on this weak report. DJTA -0.7%... DJUA +0.9%... SOX -5.0%... XOI -1.4%... BTK -6.1%... Nasdaq 100 -4.0%... S&P Midcap 400 -2.3%... NYSE Adv/Dec 1036/2019... Nasdaq Adv/Dec 1436/2387. |
