Reply #96: 12:32 EST numbers and blather

[UpInArms]

Dow 10,706.06 +38.67 (+0.36%)
Nasdaq 2,250.15 +2.45 (+0.11%)
S&P 500 1,265.54 +4.05 (+0.32%)
10-Yr Bond 4.390 +0.29 (+0.66%)

NYSE Volume 1,108,803,000
Nasdaq Volume 1,015,292,000

12:00 pm : Following last week's decline that culminated in Friday's sharp sell-off, Monday's equity market has returned to gaining ground. Buyers have dominated trade from the early going as today's corporate front, along with a sustained pullback in the price of crude, has provided some bargain hunting incentives.

Recovering from some early morning vacillation, each of the ten economic sectors currently stands higher. A 0.8% rise in the Financial sector provides the most support, and is largely to the credit of a soaring brokerage industry. One offsetting factor there is Bank of America (BAC 43.89 -0.30), which fell $0.08 short of Wall Street's profit forecast; however, the bank has pared part of its loss as investors perhaps consider the stock's attractive growth prospects, dividend yield, and valuation. Further, last week's market's performance demonstrated the need for adjusted earnings expectations, and may help lessen the effect of BAC's miss.

Wide-spread buying and particular strength in steel has taken the Materials sector up 1.2%, and much better than expected financial results from Ford (F 8.48 +0.58) supports the Discretionary sector (0.4%). In addition to beating estimates by a quarter, the auto giant announced aggressive restructuring strategies that emphasize cost-cutting initiatives through which the company expects to restore profitability by 2008. Its news lends considerable upside to today's broader market. Reaffirmed expectations for 3-5% (January) same-store sales growth from Wal-Mart (WMT 45.05 +0.05) keeps retailers above the unchanged mark while simultaneously aiding the Consumer Staples (+0.4%) sector. On the M&A front, Albertson's (ABS 25.16 +1.05) agreement to a $17.4 billion buyout spurs some further optimism there. CVS (CVS 27.01 -0.12), amongst the acquiring party, trends slightly lower on the news, but the purchase's long-term accretive effect (+$0.02-0.04 in 2007) limits the downside.

The Tech sector had a rocky morning, but its recent rise to solid ground has been a primary factor behind the indices' advances. Apple (APPL 79.03 +2.94) has erased its recent decline and has sent hardware to the top of the market. Recovered Yahoo (YHOO 21.47 -0.29) shares, following an analyst upgrade, as well as a turnaround in semiconductors, following last week's Intel-induced plunge, are behind the rise. Although INTC remains a sore spot, some modest enthusiasm ahead of Texas Instruments's (TXN 31.65 -0.01) post-close results has catalyzed further upside. Even the Energy sector (+0.7%) has managed to recover today - despite crude's 0.8% decline. Although the oil action is today supportive to the broader market, concerns over Iran nonetheless persist and somewhat dilute its effect. DJ30 +55.97 NASDAQ +6.59 SP500 +5.83 NASDAQ Dec/Adv/Vol 1181/1654/908.9 mln NYSE Dec/Adv/Vol 1047/2064/712.4 mln