10:05 ET Dow +65, Nasdaq +35, S&P +9.25: [BRIEFING.COM] The markets gapped up at the open and have been selling into the strength since. Nonetheless, each of the major indices retains a positive bias behind buy interest that looks broad based. The optics group is struggling a bit early behind cautious comments out of Corning (GLW -6%) last night and Salomon Smith Barney downgrades on Ciena (CIEN -5%) and Corvis (CORV -13%). Semiconductors continue to look solid despite reiterated caution on Intel (INTC +2%) from Morgan Stanley. The retail group is experiencing buy interest due to increased growth in personal consumption on nondurables. The question at this point is how much steam does the current rally have. Volume continues to be on the light side though market internals remain favorable. DJTA +0.5%... DJUA +0.2%... SOX +3.3%... XOI -0.1%... BTK +3.0%... Nasdaq 100 +1.7%... S&P Midcap 400 +0.7%... Russell 2000 +0.7%... NYSE Adv/Dec 1551/722... Nasdaq Adv/Dec 1867/796.
09:45 ET Dow +68, Nasdaq +33, S&P +9.21: [BRIEFING.COM] Not surprisingly, we have a positive start to the trading day behind a first quarter GDP growth rate of +2.0%. The early rally looks reasonably broad based with participation evident across retail, financials and technology. Within technology, both semiconductors and biotechs are experiencing early buy interest with the SOX higher by 3.5% and the BTK posting a 3.2% increase. Groups getting hit with sell pressure include tobacco, drugs, chemicals and oil. Market internals look good on both the NYSE and the Nasdaq yet it's still early and total volume isn't overwhelming.
09:15 ET: [BRIEFING.COM] Still solidly positive on the back of stronger than expected first quarter GDP data. S&P futures at 1252, trade 12 points above fair value while Nasdaq 100 futures at 1816 trade lock limit up and 42 points over fair value. Getting back into the GDP details, it's notable that business investment was reported +1.1%. Briefing.com believes once revisions are completed, total GDP is likely to be somewhat lower than 2.0%. The tendency in past downturns is for the economic readings early in the process to overstate growth as they incorporate past (more optimistic) assumptions. We wouldn't be surprised to see the same again in this instance. Nonetheless, the number reflects growth which is a positive for the economy and it's being well received by the markets. In business activity, optical component maker Corning (GLW 21.00) reported first quarter earnings which beat consensus expectations by a penny, but guided down full-year projections by 16-24%. Sector peers Ciena (CIEN 52.15) and Corvis (CORV 7.89) have been downgraded to Outperform from Buy by Salomon Smith Barney.
08:45 ET: [BRIEFING.COM] A slightly positive bias in pre-market activity. S&P futures at 1252, trade 12 points above fair value while Nasdaq 100 futures at 1816, trade lock limit up and 42 points over fair value. First quarter GDP was just released and came in at 2.0%, much stronger than consensus expectations for a 0.9% increase and nowhere close to recessionary levels. The inventories component of GDP fell by $7.1 billion which is a positive for the economy. It suggests some of the inventory buildup businesses have been citing is beginning to get worked down. The implication being when end-market demand does ramp, much of the demand will go straight towards new production rather than burning off previously built up inventories. While GDP is backward looking, it looks as if the Fed may have managed its easing policy appropriately. The cuts that began in early January will start filtering into the economy in June with the subsequent cuts working in through the summer.
08:00 ET: [BRIEFING.COM] S&P futures +1, or 2 pts above fair value; Nasdaq 100 futures +10, or 10 pts above fair value. Still a quiet morning with a slight positive bias; market waiting for GDP at 8:30 ET, negative number unlikely but could change the psychology regarding the economy.
07:20 ET: [BRIEFING.COM] This morning's fair value figures -- S&P 500 fair value: 1240; closed 1 pt above fair value on Thursday. Nasdaq 100 fair value: 1774; closed at fair value on Thursday. Current indications: S&P 500 futures are +1, or 2 pts above fair value. Nasdaq 100 is +5, or 5 pts above fair value. Saw a generally positive tone following yesterday afternoon's earnings reports, but no clear direction and the major after hours movers were breaking both ways: positive - VRSN, ARTG, IRF; negative - SBUX, AMGN.
06:07 ET: [BRIEFING.COM] S&P futures trading at 1241.20, 1.2 points over fair value, Nasdaq 100 futures trading at 1782.50, 8.5 points over fair value. The 30-year bond is up 2 ticks at 5.704%. The dollar is outperforming both the yen and the euro.
06:06 ET: FTSE -0.26%, DAX -0.41%: [BRIEFING.COM] European stocks also mixed in uneventful trading. Earnings still the main driver. Vodafone hit by Goldman Sachs' cut of earnings forecasts for the mobile phone company. Chemical company Bayer lower on disappointing earnings as higher input costs weigh on profit margins. However, Unliever has pushed higher with first quarter profits falling 4.2% versus analysts' expectations of a 16% decline. US contagion still a major concern with German government lowering forecast for 2001 GDP growth to 2.0% from 2.75%.
06:06 ET Nikkei -0.28%, Hang Seng +0.70%: [BRIEFING.COM] Asian stocks mixed with heavyweights Japan and Korea both closing lower on the session. However, Hong Kong and Singapore managed to post decent gains. Energy stocks lifted Hong Kong higher, with help from second-tier banks. Korea hit by surging bond yields on the back of another round of weakness in the won. Singapore boosted by gains in blue-chip Singapore Press Holdings stemming from the procurement of a TV broadcast license. Japan modestly lower with profit-taking in tech ahead of next week's Golden Week holidays.
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Close Dow +67.15 at 10692.35, Nasdaq -24.92 at 2034.88, S&P +5.77 at 1234.52: [BRIEFING.COM] For a while today, it looked as if the market was set to coast to another broad-based rally... Stocks were up pretty much across-the-board with healthy leadership being provided by the technology, oil service, retail, basic materials and transportation issues... That journey was interrupted in the early-afternoon, however, when the tech sector, led by an erosion in the semiconductor, PC and telecom equipment issues, reversed course... The Nasdaq 100 dropped 2.8%, but strength in the small- and mid-cap stocks helped limit the Composite's slide to a 1.2% decline... The S&P 400 Midcap Index and the Russell 2000 were up 1.1% and 1.0% respectively... Despite the strength in the small- and mid-cap stocks, the drag created by the big-cap tech stocks still weighed on the broader market as the Dow and S&P finished well off their highs for the session... Even so, there was reason to be encouraged by the blue chip performance today as the gains were accompanied by solid volume and healthy market internals that saw advancers beat decliners by a 19-to-11 margin, and up volume outpace down volume by a better than 2-to-1 margin... Following a host of strong earnings reports, the oil-related stocks were blue chip standouts from the opening bell and provided leadership along with the gold, railroad, retail, drug, homebuilding and basic materials components... Financial stocks turned in a mixed performance, with weakness in the regional bank and saving & loans issues acting as a limiting influence... The lackluster performance from the finacial sector was noteworthy since a number of Fed officials made dovish comments and the ECI and jobless claims data supported the view that the Fed should continue to lower interest rates... Otherwise, most of the rate-sensitive groups behaved fairly well today... Leading the Dow's advance were Honeywell (HON +1.68), Alcoa (AA +1.59) and Johnson & Johnson (JNJ +1.55)... The latter company announced a 2-for-1 stock split and an increase in its quarterly dividend... DJTA +2.1%... SOX -3.7%... XOI +1.0%... NYSE Adv/Dec 1956/1109... Nasdaq Adv/Dec 2098/1711. |
