NYSE Jumps 25%

123jump.com Staff
08 Mar, 2006
New York City

Markets are adjusting to events at the same time. Rising interest rates and falling oil prices. Rates are likely to rise to 5.25% in the near-term and oil fell 2.5% today and if not for the fear factor could trade as los as $55 per barrel. Emerging markets colntinued their slide for the second day in a row. NYSE Group trades up 25% on its first day of trading. Investors are likely to bid the stock highe in the coming days.

4:00PM- NYSE Group jump 25% on its first day of trading.

S&P -1278.61 up 2.73 DOW-11,005.74 up 25.05 up 0.2% Nasdaq-2,268 down 0.13

Broader averages traded sideways for the most of the session as traders worried for the second day of the rising interest rates. Emerging markets indexes around the world had a steep decline for the second day in a row. Markets in Russia, India, Brazil and Turkey suffered the most. In the U.S. averages recovered in the afternoon trading however, European markets close lower. Micron Technology agreed to acquire NAND flash memory maker Lexar Media for $688 million as the company prepares to enter the market in partnership with Intel. Rival, Sandisk stock fell 4.3% on the news. Sotheby’s reported 39% rise in fourth quarter earnings on 15% rise in revenue to 88 cents per share beating the estimates of 74 cents. The company stock rose 13% at close.

On the first day of trading, NYSE Group jumped 24.51% and closed at $80. With 158 million shares the company has a market cap of $12.64 billion, only second to Chicago Mercantile Exchange with market cap of $14 billion, CBOT market cap of $6.4 billon and Nasdaq market cap of $3.4 billion. Two-thirds of shares are held by the former seat holders in the NY Exchange and the rest by stock holders of Archipelago trading system. The company plans to do a secondary offering of more than 35 million shares in six week.


3:00PM-Emerging markets keep closing lower for the second day in a row.
NYSE Group, the renamed New York Stock Exchange, began trading as a public corporation for the first time in its 213 years of existence. The stock is trading $11.16 higher at $75.41 after the reverse merger with Archipelago exchange. The Exchange hopes to put behind its recent scandals and opaque operating procedures. The other exchanges that have been recently priced such as Chicago Mercantile Exchange, Chicago Board of Trade and options and NASDAQ Exchange have rewarded investors well.

Emerging markets around the world continued their slide on the second day. Brazil and Mexico are down more than 1% near the close of trading session, in overnight trading India, Thailand and Indonesia closed lower by 2.02%, 1.96% and 1.02% respectively. Russia and Turkey, the two best performing markets in the world for the year 2005 and so far for the year 2006 closed lower as well. Turkish market has lost 8% in the last two days and various indexes on Russian market closed at least 5% lower, yesterday.


12:30AM European markets close in the negative.
European stocks closed in the negative Wednesday, rebounding from earlier gains with investors eyeing earnings news from companies like EADS and Credit Agricole. Lower trading on Wall Street also contributed to the general weakness. The German DAX 30 led losers with a decline of 1.2%. The French CAC 40 slipped 0.5%, and London FTSE 100 dropped 0.8% on lower mining stocks.

Crude oil prices dropped below $60 as OPEC decided to keep output levels steady and inventory report showed a large increase in fuel stocks. Light sweet crude April delivery slipped $1.93 to $59.65 a barrel. Gasoline lost 2 cents to $1.6125, while heating oil was down 4 cents to $1.6825. Natural gas dropped 21 cents to $6.47 per 1,000 cubic feet. European gold prices extended losses. In London gold fell to $542.10 bid per troy ounce, down from $565.10. In Zurich the precious metal fell to $542.50 from $565. In Hong Kong gold dropped $4 to $550.60. Silver closed at $9.90 per troy ounce, down from $9.98. The U.S. dollar was mixed against other major currencies. The euro traded at $1.1919, up from $1.1885. The dollar bought 117.87 yen, down from 117.89. The British pound was quoted at $1.7356, down from $1.7359.


11:30AM Rates pressure keeps averages under check.
Stocks suffered weakness Wednesday morning hit by the benchmark 10-year Treasury note yield which rose 4.744%, causing concerns about interest-rates hikes and economic slowdown. This led investors to focus on consumer stocks, including Procter & Gamble, up 1%. Declining oil prices helped stock recover slightly from the initial drop. Benchmark U.S. crude oil futures fell 68 cents to $60.90 a barrel on stronger-than-expected oil inventories. The Nasdaq Composite index was the biggest loser among averages, dragged by Google, which fell 2.5% after it released unauthorized data on profit and sales projections on its Web site. The Dow Jones hovered just above morning lows. The Dow was down around 23 points. The Nasdaq was also trading near the lows of the morning, falling 9 points.

Caterpillar ((CAT)) was the most conspicuous decliner of all Dow stocks Wednesday morning. The stock dropped 2%, falling to a 3-week low. Alcoa continued its early-week decline, falling around 1.4%. DuPont ((DD)) and Boeing ((BA)) were other notable movers to the negative. Microsoft ((MSFT)) was the most notable gainer in the Dow, rising 1.2% to climb over a one-month high. The other advancing Dow components posted modest strength only. Retailers gained at mid-day with Best Buy ((BBY)) rising 2.6%, Nordstrom ((JWN)) also up 2.6% and Pacific Sunwear ((PSUN)), up 1.6%.


10:30AM U.S. market averages gain momentum.
Stocks opened in the negative but managed to erase significant part of earlier losses, supported by falling oil prices. Crude futures fell after OPEC agreed to keep production levels on rising concerns about Iran's nuclear program. U.S. light crude oil for April delivery fell 38 cents to $61.20 a barrel on the New York Mercantile Exchange. However, market averages lack a strong upward momentum to find a comfortable position in the positive territory. The Dow Jones industrial average and the Standard & Poor's 500 index hovered around breakeven. The Nasdaq composite fell about 0.2% after tumbling more after the market open.

The gold sector moved to the downside, extending recent losses. The disk drive sector, which was a standout among weak tech stocks Tuesday, further declined. The housing sector also added to recent weakness. There were few standouts to the upside in the early going. Drug, bank and airline stocks showed modest gains. Lexar Media ((LEXR)) was the best performer in early going after it agreed to be acquired by Micron Technology ((MU)). Shares of the company jumped 19%. Distributed Energy Systems ((DESC)) was one of the biggest decliners, hurt by quarterly earnings. Shares of the energy product developer dropped 29%.

Crude oil inventories sharply advance.
Crude oil inventories sharply recorded a sharp advance in the latest week, according to government statistics released Wednesday. This added to a recent string of gains. Meanwhile, stocks of gasoline ticked down. The Department of Energy''''s Energy Information Administration revealed that crude oil inventories climbed by 6.8 million barrels for the week ended March 3, rising to 335.1 million barrels from the prior week''''s level of 328.3 million barrels. This followed an advance of 1.6 million barrels in the previous week. Oil inventories were 10% higher than their levels of the same time last year.

Gasoline inventories posted a week-over-week decline of 1.1 million barrels, the government said. This broke a recent string of gains, including an advance of 300,000 barrels in the previous week. Gasoline stocks were 0.5% below their levels of last year. Inventories of distillate fuel oil declined again, falling by 2.7 million barrels in the most recent week.


9:45AM- U.S. Treasury debt yields held near 21-month highs.
U.S. stocks were weak at opening, dragged by lingering concerns over interest-rate hikes, provoked by a sharp jump in the 10-year Treasury note which rose to 4.75%. In addition, fears that central banks in Japan and Europe will raise interest rates further weighed on sentiment building on worries that rising rates could lead to a slowdown in economy as loans would be harder to get for consumers and businesses. Meanwhile, bonds could take advantage of the situation and become more attractive than equities, draining money away from stocks. A stream of weakness flowed from the tech sector as Google fell 2.3% to $356.06 after the Web search company released unauthorized information on profit projections on its Web site.

In the first hour of trading, the Dow Jones industrial average fell 13.29, or 0.12 %. The S&P 500 index fell 3.14, or 0.25%, and the Nasdaq composite index fell 7.53, or 0.33%.


9:00AM–Techs hurt stock future, Google released sales projections by mistake.
U.S. stock futures pointed to a lower start of Wednesday session as continuous interest-rate hikes concerns kept investors nervous. The treasury yields had a flat performance Tuesday as the bond market stabilized. The 10-year Treasury note advanced early Wednesday to hover round a 52-week high. The tech sector weighed for second day in a row with Google in the spotlight. Google lost ground before the opening bell after it unwillingly released internal sales projections on its investor website. A further decline in crude oil prices failed to bring cheer to the market.


8:30 AM A Couple of Companies Reverse to Profit
Covansys Corp., ((CVNS)), provider of consulting and technology services, reported Q4 earnings of 25 cents a share, up from a profit of 24 cents a share a year-ago on revenue growth. The company also added it has got over all material weaknesses identified in its assessment of internal controls for 2004. Powell Industries, ((POWL)), electrical energy equipment maker, reported it reversed to a Q1 profit of 10 cents a share on 76% revenue growth. The company is set to report Q2 earnings between 8 cents and 12 cents a share and 2006 earnings between 45 cents and 55 cents a share, incorporating stock option expenses. Revenue is anticipated to be between $300 million and $325 million.

Dynegy Inc, ((DYN)), power generator, reported Q4 net income of 75 cents a share, swinging from a loss of 46 cents a share year-ago. Q4 profit reflected income from discontinued operations of $1.74 a share. The company's loss from continuing operations increased to 98 cents a share, from 60 cents a share. Dynegy topped analysts’ forecasts for a quarterly loss of 12 cents a share. Six Flags, ((PKS)), theme park operator, reported a Q4 loss of $1.55 a share, down from a loss of $1.24 a share year-ago despite revenue growth. On a continuing operations basis, the company lost $1.31 a share, down from a year-ago loss of $1.20 a share. The company missed analysts’ estimate for a loss 73 cents a share. The company added attendance slipped 1% in Q4 to 3.6 million, and operating costs and expenses grew 12%. Gander Mountain Co, ((GMTN)), outdoor products retailer, reported Q4 earnings of $1.45 a share, up from a profit of $1.21 a share a year-earlier on sales growth, topping analysts’ estimate for a profit of 87 cents.


8:00AM Asian markets extended weakness ahead of BOJ meeting.
Asian-Pacific benchmarks closed Wednesday session lower to extend recent weakness. Stocks declines on cautiousness as the Bank of Japan started re-examining the monetary policy with the Nikkei losing 0.8%. Across the region, Shanghai Composite was the biggest loser, falling 1.6%, followed by South Korea’s Kospi, down 1.1%, and Taiwan Weighted index, down 0.4%. The dollar bought 117.54 yen, down 37 yen.

European stocks were weak at mid-day dealings, rebounding from earlier gains with investors eyeing strong earnings news. Mixed close of U.S. markets overnight also contributed to the general weakness. The German DAX 30 led losers with a decline of 1.3%, followed by the French CAC 40, down 1.1%, and London FTSE 100 falling 1.1% on lower mining stocks.