Reply #51: lunchtime buzz

[ozymandius]

12:12
Dow 10,716.94 -3.28 (-0.03%)
Nasdaq 2,223.49 +3.03 (+0.14%)
S&P 500 1,243.48 +0.68 (+0.05%)
10-Yr Bond 44.96 +0.37 (+0.83%)
NYSE Volume 1,201,690,000
Nasdaq Volume 1,066,159,000

12:05PM : Diving into the red, the market's major averages have fully pared the solid gains with which they started the session. A bullish air blew through early trade, catalyzed by multi-layered good news from General Electric (GE 35.57 +0.91) and upside earnings alongside an optimistic outlook from Hewlett-Packard (HPQ 29.22 +0.22). The 1% slide in crude oil futures gave traders further reason to extend November's rally, but, per usual, energy price declines spurred a market-dragging loss within the Energy sector (-0.5%). Although nine of the ten economic sector's had trended comfortably higher, leadership has been left with Telecom (+1.0%) and Industrials (+0.8%) as the second half of the day gets underway. GE can be credited for the latter sector's stance; this morning, the world's biggest conglomerate upped its FY06 earnings guidance, increased both its quarterly dividend and share buyback program, and announced a $6.8 billion divesture of its insurance unit. The company's news is reflective of Briefing.com's Overweight rating on that sector, and supports our view that good underlying fundamentals remain and position the market for a traditional year-end rally that should result in a 5% gain for the S&P. UPS (UPS 77.79 +0.97) lends secondary support, rising on reports that the company will boost shipping rates in the upcoming year. Despite HPQ's support and although semiconductors are soaring, the Technology sector has been relegated to the unchanged mark as pressure from Cisco (CSCO 66.99 -0.38) and Autodesk (ADSK 40.90 -6.20) pose offsetting losses. Shares of CSCO have dipped following confirmation of the company's $6.9 billion acquisition of Scientific Atlanta (SFA 42.14 +0.69), while ADSK, despite beating the street last night, disappointed investors with in-line guidance. With respect to semis, an earnings-induced surge in Marvell (MRVL) spearheads the group's advance as well as SOXX Index's outperformance. A drop in brokers weighs upon Financials, and a downbeat day within the Treasury market helps keep the rate-sensitive sector underwater. Although the economic calendar is blank, and thus did not provide bond sellers a catalyst today, attention to the flattening yield curve, which is at its narrowest since 2001, has pushed the 10-year down nine ticks and up to a 4.49% yield. While today's earnings front is a light one, investors had a host of upside reports delivered last night with which to contend. Aside from the aforementioned companies, Disney (DIS 25.15 -0.84) Starbucks (SBUX 30.81 -0.41) and Nordstrom (JWN 37.43 -1.04) are on the list; while the latter two lend some support to the Discretionary sector, DIS shares have been sent south - despite better than expected earnings - as the market appears to focus upon slightly light revenues. We remain committed to the name, though, and include it as a suggested holding in our Active Portfolio due to its double-digit earnings growth, visibility, strong cash flow generation, shareholder value, and operating momentum. NYSE Adv/Dec 1503/1568, Nasdaq Adv/Dec 1572/1264