DOW -77 WMT doing its thing
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Message #7431 from scottonstocks at 11/29/2004 9:14:22 AM
DOW -opening @ 10522 with futures higher. I expect a close some 75-100 points lower. WMT forecast will have greatest weight today
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U.S. stocks lower as Wal-Mart, weak bond mkt weigh
Monday November 29, 11:16 am ET
By Mark Cotton
NEW YORK (CBS.MW) - U.S. stocks turned lower Monday as Wal-Mart's November sales warning cast a pall on an otherwise solid start to the holiday shopping season.
Weakness in the bond market sparked by concern U.S. interest rates may have to rise in order to stoke foreign investor appetite for U.S. assets further weighed on sentiment.
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The Dow Jones Industrial Average (^DJI - News) was last down 64 points, at 10,457 after climbing as high as 10,557 in early trading.
Putting a cap on the Dow's gains, Wal-Mart slumped more than 3 percent to a one-month low of $53.44 on its lower November sales forecast.
The Nasdaq Composite (NasdaqSC:^IXIC - News) was down 3 point, at 2,098, off an intraday high of 2,118.
The S&P 500 Index (CBOE:^SPX - News) fell 5.85 points, to 1,176.
"This is a carry-over of the weekend enthusiasm about retail sales," said Michael Metz, chief investment strategist at Oppenheimer & Co.
"But it won't last," said Metz. "I think the real problem now is going to be rising rates and this puts a lid on the market."
Metz pointed to this morning's weakness in the bond market. The 10-year benchmark note was down 20/32 at 99 13/32, with its yield standing at 4.31 percent.
"The bond market is down sharply on fears on a lack of foreign central bank demand (for U.S. assets) will cause rates to rise," said Metz.
On the currency markets, the dollar saw early gains fade against the euro, although the greenback was still some way off its record low of $1.3329 reached on Friday.
The euro was virtually unchanged at $1.3280, after falling as low as $1.3227 in early trading.
Against the Japanese yen, the greenback also pared early gains, to stand at 102.55.
Gold futures climbed above $450 an ounce for the first time since July 1988, although market participants said profit taking would remain a temptation.
"Multiple closes above $450 will be needed to keep gold moving forward, but ... a dip back to the $438-$440 area would be healthy for the market at this juncture," said Dale Doelling, chief market commentator at Bullion.com in Chicago.
In the oil markets, crude futures edged higher in New York. Earlier, Saudi Oil Minister Ali Al-Nuaimi said at a conference in London that the country will raise production capacity to 12.5 million barrels per day within a few years from the current 11 million bpd.
The benchmark January contract was last up 11 cents at $49.55 on the New York Mercantile Exchange.
Turning back to the broader market for equities, decliners had a 16 to 14 edge over advancers, but there were 15 winners for every 13 losers on the Nasdaq.
Volume was 378 million on the Big Board and 596 million on the Nasdaq.
Wal-Mart cast a pall over holiday sales
Wal-Mart (NYSE:WMT - News) was a weak spot on the Dow after the world's largest retailer cut its November sales forecast by more than half.
Wal-Mart cited disappointing sales the day after the Thanksgiving holiday, and said sales grew by only 0.7 percent in the year to November, much less than the 2 to 4 percent increase it projected earlier in the month.
Wal-Mart's downbeat outlook aside, early signs suggest holiday spending is topping projections.
The average holiday shopper already spent $265.15 on Thanksgiving weekend, bringing in a total of $22.8 billion, according to industry statistics announced on Sunday.
That amounts to more than 10 percent of the $220 billion that the National Retail Federation expects will be spent during entire holiday shopping season.
Meanwhile, Visa USA said Saturday that the total of its credit and debit card transactions was more than $4.1 billion, up 15.5 percent from the same day last year.
Apple, Intel boosted by upbeat analyst notes
Forecasts of a strong holiday season for Apple Computer Inc (NasdaqNM:AAPL - News) was behind a decision by brokerage UBS to raise its price target and earnings estimate on the PC maker.
UBS said a survey of U.S. retailers showed strong demand for its higher margin Photo iPods and Mini iPods as well as iMacs and accessories. Apple shares soared as much as 7.8 percent, and were last trading up 5.8 percent, at $68.32.
Elsewhere in technology, Intel shares (NasdaqNM:INTC - News) gained 0.3 percent to $23.27 in morning trading after Bank of America said strengthening PC demand will prompt the chip maker to adjust its fourth-quarter revenue forecast to the upper half of its previously provided expected range of $8.6 billion to $9.2 billion. The company provides a mid-quarter update on Thursday.
Lending some support to this forecast, sales of semiconductors worldwide in October increased 22 percent from the year-earlier month and 1.5 percent from September as companies used up inventories, the Semiconductor Industry Association, a trade group, said.
In other news, IBM (NYSE:IBM - News) shares gained in morning trading in the wake of Wall Street Journal report that it is preparing to announce limited production plans for a chip for home entertainment products.
biz.yahoo.com |
