Nasdaq Declines

123jump.com Staff
16 Mar, 2001
New York City

Investors for the second day read economic reports of healthy economic growth and contained inflation. February CPI rose 0.1% after gaining 0.7% in January and Phily Fed suggested that the inflation at retail level is under control. Less than a steep decline in February housing starts and falling yields drove most housing stocks higher. Emerging markets were led by Indonesia and Mexico. India closed at record high for the third time.

4:15PM Nasdaq Declines on tech stocks sell-offs.

DOW 11,253.24 UP 43.47
NASDAQ 2,299.56 DOWN 12.28
S&P 1,305.33 UP 2.31

- Yields on 10-year bond fell 4.648% and for 30-year bond dropped to 4.679%.
-Home builders, energy explorers and service providers rose for the second day.

-Crude rose 2% or $1.49 to $63.58. Gasoline, heating oil and gas gained a fraction.
-Gold gained $1 to $555.40 per ounce and silver fell 80 cents to $10.342.

-Pakistan, Indonesia and Mexico led emerging markets gainers.

Bond yields fall, tech stocks decline and home builders rise for the week.
Report on Consumer Price Index for February month suggested a rise of 0.1% after having jumped 0.7% in January supported early rise in three broad averages. The S&P 500 and Dow remained near multi-year high however did lose most of the gains near the close. Home builders and interest rate sensitive stocks advanced in sympathy. Rise in energy price dampened most stocks in the transportation sectors including railroads, airlines and trucking companies however, energy related stocks. Housing starts fell 7.9% in February less than what market had expected and economic report from Philadelphia Fed suggested that inflation is under check. Market for the most of the day operated under the belief that economy is growing without serious inflation problem. Treasury advanced on the economic report and on the news that the U.S. has carried out its biggest air assault on Iraq since the invasion in 2003. Bear Stearns reported higher earnings as reported by Lehman Bros and Goldman Sachs but all three stocks fell during the day. Bear Stearns also reported a fine of $250 million for fraudulent market timing and late trading of mutual funds.


3:00PM Emerging markets climb higher for the third time this week.
Russia managed to gain 0.32% and Turkey lost 1.44% today. Asian emerging markets were led by substantial gains in Pakistan, Indonesia and India generating returns of 2.84%, 2.36% and 0.71%. Markets in Taiwan and Thailand were under pressure and sold-off by 0.21% and 0.17%. Thailand Prime Minister expressed a possibility of stepping aside ‘temporarily’ till the date of election to satisfy critics of the current regime. Tech stocks in Taiwan suffered profit taking. Mainland telecom operator China Mobil reported earnings rise of 28% after the close on Thursday. The stock has advanced in the recent days in Hong Kong. Bank of East Asia rose 2.9% and New World Development after the earning release rose 4% on Thursday in Hong Kong.

In Latin America Mexican market rose 0.71% near close on the strength in home builders, consumer banking and telecom stocks. Ara and Homex ((HXM)), two home builder stocks advanced 3% and 1% respectively. Cemex, ((CX)) largest cement maker rose 3% and soft drink bottler Fomex ((FMX)) rose 1.6% in ADR trading in New York. Brazil traded lower 0.45% near close however, land-line telecom operator Telemar, small jet air craft maker Embraer rose 1% and 0.4% and steel companies Geradu and Usiminas rose 1% and 0.4%. New York listed ADR CVRD ((RIO)) and Petrobras ((PBR)) were fractionally lower and TAM Airline ((TAM)) and Gol Air ((GOL)) traded near unchanged.


2:00PM Indian market trades near record high.
Indian market continued to scale new high as the Sensex index in Mumbai increased 77.02 and ended the day with10,878.74 points. Indian market up for the year is up more than 15% so far. The S&P CNX Nifty rose 0.98% or 31.25 points to a record high of 3,226.60. The turnover at BSE on Thursday dropped to Rs. 4,450 crore compared to Tuesday’s turnover of Rs. 5,334 crore. The top gainer for the day was Zee Telefilms with its share price up by 15.14% to Rs. 219. The other top gainers were VSNL, Reliance Industries, Dabur India and Tata Power. Ranbaxy Laboratories led the top five losers, followed by L&T, Tata Tea, National Aluminum Co. and Dr. Reddy’s Laboratory.

12:30PM European markets closed near the flat line.
European markets closed near the unchanged mark. A strong performance from supermarket group Casino Guichard and steelmaker Corus Croup managed to limit losses in oil, healthcare and insurance stocks. The German DAX 30 declined 0.01%, the French CAC 40 fell 0.04%, while London FTSE 100 rose 0.5%.

Crude oil prices retreated on speculations of steady oil prices between $50 and $60 a barrel. Light sweet crude April delivery fell 12 cents to $62.05 a barrel. Gasoline fell 4 cents to $1.787. Heating oil was steady at $1.779. London Brent for April delivery lost 42 cents to $62.52 a barrel. European gold lost ground Thursday. In London gold declined to $549.70 bid per troy ounce, down from $554.90. In Zurich the precious metal fell to $548.60 from $554.80. In Hong Kong gold lost 40 cents to $551.30. Silver closed at $10.10, up from $9.90. The U.S. dollar declined against other major currencies. The euro traded at $1.2141, up from $1.2070. The dollar bought 117.10 yen, down from 117.26. The British pound was quoted at $1.7537, up from $1.7475.


11:30AM Stocks traded in a narrow range.
Stocks traded higher Thursday morning, supported by upbeat economic data, prompting that the Fed Reserve wouldn’t raise interest rates aggressively. The Dow Jones was trading just below the highs of the morning. The Nasdaq hovered above the flat-line, currently up 4 points. U.S. Treasuries rose in price while yields fell. The benchmark 10-year note added 13/32 in price while the yield fell to 4.67% from 4.73% on Wednesday.

General Motors ((GM)) was the most conspicuous mover to the upside within the Dow this morning, rising around 1.9%. Alcoa ((AA)) climbed 1.8%, setting a one-month high. Wal-Mart ((WMT)) advanced to 1.2%. Six Dow components moved to the downside with the largest decliner, Procter & Gamble ((PG)), falling down around 1.1%. The stock dropped to a 6-week low, beneath its 50-day moving average. Banks and companies relatively sensitive to higher interest rates rose. Blue-chip manufacturer 3M ((MMM)) gained 1.5% and Citigroup ((C)), the largest U.S. bank, rose 0.8%.

On Nasdaq, Qualcomm Inc. ((QCOM)) rose 2% on upgrade at Merrill Lynch. Shares of Bear Stearns ((BSC)) bank reversed earlier gains on strong quarterly results and fell 0.4%. Ford Motor Co. ((F)) fell 1.1% after J.P. Morgan cut its investment rating on the company to underweight. ConAgra Foods Inc. ((CAG)) fell 6.9% on restructuring plan and lowered dividend.


10:30AM Benign inflation data and housing starts data lifted stocks.
Stocks came off intraday highs, following the initial advance on benign inflation data. The Dow gained about 50 points, or 0.5%. The Nasdaq posted a gain of about 7 points, or 0.3%. Bonds edged higher, with the yield on the 10-year Treasury note falling to 4.69% from 4.73% late Thursday. In economic news, fears of a declining housing market eased after the Commerce Department reported better-than-anticipated figures of 2.145 million new homes under construction in February. Market welcomed the latest consumer price index report, which showed consumer prices rising just 0.1% in February with the core CPI, with food and fuel prices removed, also up 0.1%. Meanwhile, the Labor Department reported that jobless claims unexpectedly rose with 309,000 new jobless claims filed last week. In corporate news, Ford Motor Co. ((F)) fell on downgrade at Citigroup to underweight from equal weight. Bear Stearns Cos. ((BSC)) advanced on record Q1 earnings. Regulators announced a $250 million settlement with the company over improper mututal fund trading. ConAgra Foods Inc. ((CAG)) fell 7% on a massive restructuring plan. The company also cut its quarterly dividend by 34%. American Italian Pasta ((PLB)), pasta maker, surged 68% to stand out as one of the best performers in the early going, following an announcement that it entered into a new 5-year, $295 million senior credit facility. FARO Technologies ((FARO)) was one of the biggest decliners in the early going, falling 18%, after the company delayed its 10-K filing and said it was looking into suspicious payments.


9:45AM Stocks opened higher on tame inflation.
U.S. stocks advanced at opening on consumer prices report which showed inflation at tame levels, easing concerns about interest rate increases and encouraging investors to extend recent gains. According to a Commerce Department report, inflation slowed sharply in February as food costs moderated and the price of gasoline, natural gas and other energy products significantly declined. The Dow and S&P 500 added to their multi-year highs, with the blue chip average up about 25 points. The Nasdaq rose about 6 points to 0.3%. At Wednesday close U.S. stocks rallied with the S&P 500 breaching the 1,300 mark for the first time since May 2001. On the earnings front, Bear Stearns ((BSC)) posted better-than-expected earnings, following strong reports from Goldman Sachs Group and Lehman Brothers. Housing stocks advanced in the early going on falling treasury yields. Toll Bros ((TOL)) rose 4.7%, Ryland Group ((RYL)) 2.5%, Hovnanian ((HIOV)) gained 2.1%, KB Home ((KBH)) added 1.6%. Utility stocks also gained on activity in the fixed income market. The broker/dealer sector advanced, following the release of strong earnings from Bear Stearns.

Weekly jobless claims unexpectedly increased.
Jobless claims unexpectedly increased in the week ended March 11, according to a Department of Labor report released Thursday morning. The increase came as a surprise to economists, who had been expecting jobless claims to fall. The report showed that jobless claims rose to 309,000 from the previous week's revised figure of 304,000. Economists had expected jobless claims to fall to 298,000 compared to the 303,000 originally reported for the previous week. The Labor Dept. also said that the 4-week moving average rose to 296,500 from the previous week's revised average of 293,750. With the increase, the moving average moved higher for the third consecutive week. The report also showed that continuing claims for the week ended March 4 fell to 2.445 million from the preceding week's revised level of 2.494 million.

Housing starts fell 7.9%, less than economists had expected.
The Department of Commerce released its report on housing starts in the month of February on Thursday, showing that housing starts fell after surging higher in January. Nonetheless, housing starts did not fall as much as economists had anticipated. The report showed that housing starts fell 7.9 percent to a seasonally adjusted annual rate of 2.120 million units in February from an upwardly revised 2.303 million unit rate in January. The revised January reading was up 15.8 percent from December. The decrease in February was not as steep as economists had expected, with economists forecasting a more significant decline to a 2.000 million unit rate from the 2.276 million unit rate originally reported for January. The Commerce Dept. said that the drop in housing starts reflected notable decreases in the Northeast, Midwest, and South. Housing starts in the West bucked the downtrend, however, increasing by 7.9 percent in February. The report also showed that building permits fell 3.2 percent to a seasonally adjusted annual rate of 2.145 million units in February from a 2.216 million unit rate in January. Building permits are seen as a good indicator of future housing demand.


9:00AM Stock futures pointed to a higher opening on economic data.
U.S. stock futures recovered from earlier weakness and took the positive direction, following two consecutive days of gains and a report on consumer prices which showed inflation at tame levels. The Standard & Poor's 500 futures were up 2.3 points, above fair value. Dow Jones industrial average futures were up 8 points, and Nasdaq 100 futures were up 4 points.

The Labor Department said that February Consumer Price Index rose 0.1%, in line with expectations, compared with a 0.7% increase in January. Excluding food and energy, prices also rose 0.1%, slightly below the forecast 0.2% rise.

The largest company to release quarterly data today, Bear Stearns Cos. ((BSC)), reported record Q1 earnings of 36.6% on strong equity trading and a jump in investment banking fees. The brokerage earned $508.7 million, or $3.54 per share, compared to $372.3 million, or $2.64 per share in 2005, beating expectations. Revenue rose 18.9% to $2.19 billion compared to $1.84 billion a year ago. Barnes & Noble (BKS) is also expected to report quarterly earnings before the opening bell. Analysts predict the bookseller will report fourth quarter earnings of $1.75, an increase from last year.

February CPI rose 0.1%, the core consumer price index was up 0.1%.
Thursday morning, the Department of Labor released its closely watched report on consumer prices in the month of February. The report showed a modest increase in prices that came in line with economist estimates. The Labor Dept. said that its consumer price index rose 0.1 percent in February following an unrevised increase of 0.7 percent in January. The increase came in line with economist estimates of an increase of 0.1 percent. The modest increase in prices came as a decrease in energy prices helped to offset price increases in other areas. The report showed that energy prices fell 1.2 percent in February following a 5.0 percent increase in January. The core consumer price index, which excludes food and energy prices, also rose 0.1 percent in February following a 0.2 percent increase in January. Economists had been expecting the core CPI to increase by 0.2 percent. The Labor Dept. said that the increase in core prices was primarily due to a rise in shelter costs, which rose 0.4 percent in February. The increase was partly offset by a 1.0 percent decrease in clothing prices.

Crude oil prices eased back on strong U.S. oil supplies. Light sweet crude April delivery fell 20 cents to $61.97 a barrel. Gasoline fell 3 cents to $1.800. Heating oil was steady at $1.7790. London Brent for April delivery lost 42 cents to $62.52 a barrel. European gold lost ground Thursday. In London gold declined to $553.25 bid per troy ounce, down from $554.90. In Zurich the precious metal fell to $553.80 from $554.80. In Hong Kong gold lost 40 cents to $551.30. Silver opened at $10, up from $9.90. The U.S. dollar traded mixed against other major currencies. The euro traded at $1.2078, up from $1.2070. The dollar bought 117.61 yen, up from 117.26. The British pound was quoted at $1.7473, down from $1.7475.


8:30AM Winnebago net plunges, Global Crossing loss widens.
Winnebago Industries Inc., ((WGO)), motor home manufacturer, reported that Q2 profit dropped 39 % to 23 cents per share, from 37 cents per share in the year-ago period on lower demand and prices for motor homes, below analyst estimate of 38 cents a share. Revenue declined 14 % due to lower motor home deliveries because of decreased industry retail demand and a shift to lower priced motor homes.

Global Crossing Ltd, ((GLBC)), communications company, reported a Q4 loss of $79 million, down from a loss of $27 million a year-earlier, before the payment of preferred stock dividends of $1 million in each period. Revenue dropped to $462 million from $573 million in the same period a year ago. The company added that its adjusted EBITDA came to a loss of $32 million, down from equivalent loss of $19 million in the year-ago period. Q4 results include $15 million in additional incentive and stock compensation costs.

Shoe Carnival Inc, ((SCVL)), footwear retailer, reported that Q4 earnings advanced more than twice to 22 cents a share, with sales up 13.7% and same-store sales up 11.7% in Q4, beating analysts’ expectations of 21 cents a share

Leap Wireless, ((LEAP)), wireless communications carrier, reported that it reversed to Q4 profit of 8 cents a share, up from a quarterly loss of 11 cents a share in the prior year, as it added nearly 46,000 new customers. Revenue advanced to $228.9 million from $206.6 million. The company beat analysts’ estimates for earnings of 5 cents.

New York & Co Thursday, ((NWY)), women's apparel retailer, reported Q4 earnings of 36 cents a share, up from 32 cents a share a year-earlier on 16.1% sales growth and 9.6% same-store sales growth. The company’s results were in line with analysts’ estimates for a profit of 36 cents a share.

Cost Plus Inc, ((CPWM)), retailer, reported Q4 net profit dropped 8.5% to 97 cents a share despite 7% net sales growth. Same-store sales dropped 2.1%. The company missed analysts’ views by a penny.


8:00AM Asian markets closed mixed. The Nikkei slipped 1.4%.
Asian-Pacific benchmarks ended Thursday session mixed, reflecting interest-rate concerns and a key earnings report from China Mobile. The Nikkei opened higher on exporter issues, boosted by stronger dollar, but eventually tumbled 1.4% to 16,096.21 as investors worries about higher Japanese interest rates dragged real estate and bank stocks, including Sumitomo Realty and Development, down 6.6%. Hong Kong’s Hang Seng slightly advanced to 0.06% on optimism about strong corporate results. Taiwan Weighted index fell 0.2% on profit-taking in the tech sector. Australia All Ordinaries climbed 0.6% on resources and building-materials issues.

European markets traded lower at mid-day, erasing early gains. A strong performance from supermarket group Casino Guichard and steelmaker Corus Croup failed to keep stocks in the positive as oil, healthcare and insurance stocks exerted strong pressure. The German DAX 30 declined 0.3%, the French CAC 40 fell 0.3%, and London FTSE 100 lost 0.2%.