Reply #50: 12:30 lunchtime check

[54anickel]

Dow 10,609.54 -37.02 (-0.35%)
Nasdaq 2,167.47 -5.71 (-0.26%)
S&P 500 1,226.87 -2.48 (-0.20%)
10-Yr Bond 4.215% +0.03
NYSE Volume 960,442,000
Nasdaq Volume 970,451,000

12:00PM : Market trades at improved levels, as oil prices continue to tumble, but remains under modest pressure midday as quarterly disappointments from bellwethers like Intel, Yahoo and GM and surging bond yields continue to weigh on the proceedings... Second-quarter reports from Intel (INTC 27.05 -1.66) and Yahoo (YHOO 33.57 -4.16) that failed to amaze Wall Street last night have underpinned a sense of nervousness all morning, as a lack of noteworthy economic reports has placed even more emphasis on earnings and guidance...
And even though the majority of S&P 500 constituents (16 of 23) posting results this morning have beaten analysts' expectations, a blue chip disappointment from General Motors (GM 36.32 -0.51), which missed analysts' Q2 forecasts by a large margin, has weighed on sentiment and left 6 out of 10 economic sectors underwater... Pacing the way lower has been Technology, stemming from the INTC and YHOO disappointments... Minimizing sector losses, however, has been a turnaround in Semiconductor, following better than expected reports from TER and NVLS...

In addition to GM's poor quarterly performance, worse than expected earnings from Eastman Kodak (EK 26.58 -2.16) have also weighed on the Consumer Discretionary sector... Energy has also traded lower, amid further deterioration in crude oil prices ($56.35/bbl -$1.11) following better than expected oil inventories data... Crude oil supplies fell 900K barrels (consensus -3.5 mln) and gasoline inventories fell 1.3 mln barrels (consensus -1.5 mln) while distillates rose 2.2 mln barrels (consensus +1.7 mln)... The interest-rate sensitive Utilities sector has fallen at the expense of rising bond yields...

The benchmark 10-year note, which is off 8 ticks to yield 4.21%, has been under pressure all morning after Fed Chairman Greenspan said the Fed must "continue" to raise interest rates as high energy costs still put pressure on consumer prices... Health Care, however, has surged following strong Q2 reports from Pfizer (PFE 27.48 +0.10) and Amgen (AMGN 80.50 +9.98) while upbeat analyst comments on several market leaders (i.e. AA, GP, X, PD) has provided a boost to Materials...DJTA +1.3, DJUA -0.4, DOT -1.0, Nasdaq 100 -0.2, Russell 2000 +0.3, SOX +0.8, XOI -0.7, NYSE Adv/Dec 1614/1445, Nasdaq Adv/Dec 1431/1395

11:30AM : Renewed buying interest, spearheaded by a turnaround in chip stocks, lifts the major averages to their best levels of the session... The PHLX Semi Index, which was off almost 2.0% right around the open, has recently turned positive, getting a boost from semi cap equipment names like AMAT (+2.0%), KLAC (+2.5%), NVLS (+5.4%) and TER (16.9%)... Last night, TER posted a narrower than expected loss while NVLS beat analysts' Q2 estimates by $0.03...

Oil prices losing more than $1/bbl within the last 15 minutes, falling to $56.25/bbl (-$1.21), may be providing the boost to overall sentiment that has inspired investors to pare early losses...SOX +0.3, NYSE Adv/Dec 1262/1726, Nasdaq Adv/Dec 1265/1500

11:00AM : Market rebounds some but not nearly enough to make a significant change in the standings as oil prices fall following inventories data... The EIA has reported a smaller than expected draw in crude oil supplies of 900K barrels (consensus -3.5 mln), a larger than anticipated build in distillates of 2.2 mln barrels (consensus +1.7 mln) and a 1.3 mln barrel decline in gasoline inventories (consensus -1.5 mln)...

But even though crude oil futures ($57.40/bbl -$0.06) have turned negative, providing some relief for investors, further deterioration in the Energy sector has removed some of the market's much needed leadership... XOI -1.0, NYSE Adv/Dec 1105/1842, Nasdaq Adv/Dec 1126/1591