From Briefing.com: 4:40 pm : Stocks took out new bear market lows in another volatile session Thursday. News of continued weakness in labor markets underscored ongoing economic concerns while a lack of leadership gave investors little reason to turn about-face.
The latest jobless data ensure an 11th consecutive decline in monthly nonfarm payrolls. Initial jobless claims for the week ended Nov. 15 jumped 27,000 to 542,000. That took the 4-week moving average to 506,500 from 490,750. Continuing claims increased to 4.01 million from 3.90 million.
Mounting jobless claims continue to reflect a downbeat mood among businesses. Layoffs have been on the rise as many businesses look to cut expenses and regain footing despite tenuous economic conditions.
Selling pressure took the S&P 500 down to 747.78 late in the session, which marked the lowest intraday trading level since 1997. All three of the major indices registered new closing lows.
Several marquee stocks also took out record lows this session. General Electric (GE 12.88, -1.57) dropped to its lowest point in more than a decade. A Dow Jones report indicated the company is not seeking equity investments from sovereign wealth funds, which countered earlier reports. Given GE's depressed stock price, shares now carry a dividend yield of almost 10%.
Citigroup (C 4.71, -1.69) shed a quarter of its market cap, despite word that Saudi Prince Alwaleed plans to boost his stake in the financial giant to 5% from under 4%.
Weakness in the financial sector was widespread. The sector closed 10.5% lower; it is now down 68% this year.
Energy posted the largest decline of the session, though. It shed 11.2% and is now down 46% year-to-date.
The steep declines in energy followed losses in crude oil prices. Crude futures fell below $49 per barrel to reach their lowest point in more than three years. The commodity finished the session near its lows.
Uncertainty, which is an enemy of the stock market, continues to surround auto makers. While some reports indicate senators have reached a bipartisan auto aid agreement with wide support, the likelihood that a bill is approved and passed in the immediate future is slim. One senator said an auto industry bailout would use existing $25 billion in loans.
Both Ford Motor Company (F 1.39, +0.13) and General Motors (GM 2.88, +0.09) advanced on the news. However, Standard & Poors lowered its rating on Ford Motor (F 1.45, +0.19) to CCC+ from B-, but removed it from CreditWatch.
Hope that auto makers would receive a bailout helped stocks climb to strong gains midsession. The S&P 500 was actually up 1.7% midday. However, stocks turned lower as the plan became muddled and now leader emerged.
As uncertainty and unease mounted around stocks, government Treasuries caught a strong bid. The benchmark 10-year Note surged 91 ticks and is now yielding just under 3.0%.DJ30 -444.99 NASDAQ -70.30 NQ100 -4.7% R2K -6.6% SP400 -7.8% SP500 -54.14 NASDAQ Dec/Adv/Vol 2458/358/3.15 bln NYSE Dec/Adv/Vol 2986/227/2.23 bln
4:05PM Dell beats by $0.06, misses on revs (DELL) 9.81 -0.54 : Reports Q3 (Oct) earnings of $0.37 per share, $0.06 better than the First Call consensus of $0.31; revenues fell 3.1% year/year to $15.16 bln vs the $16.22 bln consensus. Co said, Global industry demand in the quarter slowed through October, adversely affecting the company's cash conversion cycle, which ended at negative 25 days, and resulted in negative cash flow from operations of $86 million. As company growth stabilizes, more typical cash generation is expected to resume. Year to date, cash flow from operations was $1.2 billion and the company ended the quarter with $8.9 billion in cash and investments. In the quarter, Dell spent $400 million to buy back 21 million shares. Laptop units were flat as the company transitioned to the new Latitude Series E and Dell Precision laptop product lines, ranging from the lightest ultra-portable in the company's history to the most powerful mobile workstation. Server units declined 4 percent and growth in storage revenue was flat. Enhanced services revenue, which is largely driven by Dell's commercial business, was up 7 percent to $1.4 billion. Dell believes that global IT end-user demand will continue to be challenging. Against this backdrop the company will continue to focus on improving competitiveness, lowering costs and improving its mix of products and services to optimize liquidity, profitability and growth. The company will continue to incur costs as it realigns its business to improve competitiveness, reduce headcount in certain areas and invest in infrastructure, growth opportunities and acquisitions.
10:31AM JA Solar and BP intend to form long-term agreement (JASO) 1.92 -0.12 : The co and BP Alternative Energy Holdings Limited, a subsidiary of BP announce their intention to jointly develop and market part of their solar photovoltaic product portfolio over the next five years. The definitive commercial agreement is expected to be entered into before year end. JA Solar is expected to contribute its cost-efficient manufacturing and rapid execution capabilities, plus its access to third party silicon and/or wafers, while BP is expected to bring its access to its own silicon and/or wafer supply, provide access to its global customer portfolio, and leverage its strong brand and sales and marketing capabilities in key markets.
08:17 am Yahoo! upgraded to Buy at Needham; tgt $12: . Needham upgrades YHOO to Buy from Hold and sets target price at $12 saying they believe the significant sell-off in YHOO shares has finally neared a trough, and that downside from here is limited even under their worse-case scenario. The firm says while the economic, consumer and advertising backdrop remains challenged and highly uncertain, a change in leadership, new product launches and the potential for a renewed MSFT deal could all prove positive catalysts for Yahoo and its shares over the next 3-9 months.
08:00 am Broadcom target lowered to $22 at Friedman Billings: . Friedman Billings lowers their BRCM tgt to $22 from $29 following meetings with the CEO and investors on Wednesday. Mgmt would not comment on near-term business trends, though the firm's upcoming analyst day may present an opportunity for mgmt to update expectations if necessary. They think it is likely that Broadcom will preannounce lower 4Q revs in the next several weeks. As such, they are cutting their '09 EPS estimate to $1.05 from $1.50 ($1.38 consensus), which assumes an 8% organic revenue decline, and slower growth in operating expense spending in 2009. |
