Back to OIL...for the moment. Some mentions peppered in this day's analysis.
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NEW YORK (CBS.MW) -- U.S. stocks stumbled Wednesday in yet another downbeat session punctuated by fears of disappointing fourth-quarter earnings results. Not helping matters was a fresh round of turmoil in Asian financial markets.
Blue-chip issues logged modest setbacks on the session after a round of computerized buy programs kicked in during the final 15 minutes of trading to trim what were hefty losses.
As a result, the Dow Jones Industrial Average, down 86.19 points at 3:44 p.m. ET, closed off just 3.98 points, or 0.1 percent, to 7902.27.
But the broader market fared worse, stymied by further bloodshed in the technology and financial sectors, considered to have the most exposure to fading Asian economies.
On the plus side, energy shares gained momentum as the day wore on after suffering extensive markdowns in Tuesday's session. Also buoyant was the transportation sector, beneficiary of lower fuel costs given the recent decline in oil prices.
"This is a pure stock-picking market," said Louis Navellier, president of money manager Navellier & Associates and publisher of the MPT Review newsletter. "The market is due to have a broad-based rally here based solely on falling bond yields. So, we might have a pop in the market for two weeks--but then it'll be a very selective market.
"I like the financial sector," Navellier continued. "Outside of this area, I love the air freight group. Airborne Freight is my favorite stock here, but I don't like Federal Express. A lot of the shipping companies are stealing UPS's business. I also think some of the food stocks are attractive, such as Dean Foods and Interstate Bakeries, but I wouldn't buy all of the stocks in the group.
"The best earnings are in oil service right now. But oil prices have fallen 30 percent and some analysts are trimming earnings estimates, so you can't buy all of them. Here, I like Cliffs Drilling and UTI Energy."
"The next few weeks will see more volatility and fluctuations in both directions, with a bias to the downside as the market works off its technically overbought condition," said Robert Dickey, managing director of technical research at Dain Bosworth Inc.
Banking shares gave ground amid worries of deteriorating credit quality and the narrowing spread between short- and long-term interest rates. Banks generally borrow money at short-term rates and lend at long-term rates. A narrowing spread between the two squeezes the companies' profit margins. Bankers Trust sagged 3 1/2 to 108 3/8, Citicorp 1 to 122, BankAmerica 1 1/2 to 67 5/8, BankBoston 2 3/8 to 92 1/4, and First Chicago 1 3/4 to 78 5/8.
A relative bright spot was the energy sector, hounded of late due to slowing Asian demand, unseasonably warmer weather, and the resumption of Iraqi oil exports. Among international oils, British Petroleum added 2 3/4 to 77 3/8, Mobil 2 1/4 to 69 3/4, Exxon 1 7/8 to 60 7/8, and Chevron 2 5/8 to 76 3/8.
In the oil & gas equipment group, prices rose 2.6 percent. EVI tacked on 4 to 48, National Oilwell 2 3/4 to 33, Cooper Cameron 2 3/4 to 55 1/8, and Smith International 2 7/8 to 56.
Oil & gas drilling names surged 4.2 percent, with nearly every issue rising. Biggest winners included Reading & Bates, up 2 3/4 to 41 7/8; Santa Fe International, 2 3/8 to 38 3/8; Noble Drilling, 1 7/8 to 27 1/2; Patterson Energy, 1 7/8 to 29 7/8; Ensco International, 1 7/16 to 30 13/16; and Cliffs Drilling, 1 3/8 to 45 3/8.
Also exhibiting relative strength was the transportation sector. In the airline group, AMR was ahead 3 1/4 to 132 3/4, Delta Air Lines 2 5/8 to 120 1/2, U.S. Airways 1 1/8 to 61 5/8, Mesaba Holdings 1 to 27 1/8, and Southwest Airlines 15/16 to 25 7/16.
Elsewhere in the transportation arena, railroads excelled, with Union Pacific gaining 1 5/8 to 63 3/8, Florida East Coast Industries 1 1/8 to 95 3/4, and Genesee & Wyoming 1 1/8 to 24 1/2. |
