Reply #58: details of today's sticky end

[ozymandius]

Dow 12,029.06 Down 131.24 (1.08%)
Nasdaq 2,429.71 Down 28.02 (1.14%)
S&P 500 1,337.81 Down 13.12 (0.97%)
10-Yr Bond 4.154% Down 0.071
NYSE Volume 4,514,633,500
Nasdaq Volume 2,072,650,000

4:25 pm : The major indices settled with steep losses on Wednesday, after traders digested mixed earnings reports, news that another bank is raising capital and volatile crude prices.

On the earnings front, FedEx (FDX 82.72, -1.61) reported quarterly earnings that missed the consensus estimate. The Memphis, Tenn.-based company issued fiscal year 2009 earnings guidance well below expectations, citing sluggish U.S. demand and record energy prices.

Morgan Stanley's (MS 40.79, +0.20) second quarter earnings per share fell 61% year-over-year, although the results were good enough to top Wall Street's low expectations. However, its revenue fell well short of estimates.

One day after Goldman Sachs said U.S. banks may need to raise as much as $65 billion in additional capital, regional bank Fifth Third Bancorp (FITB 9.26, -3.47) announced plans to shore up its balance sheet. Specifically, the Ohio-based bank is going to raise $1 billion in fresh capital, sell $1 billion in assets and cut its quarterly dividend by 66% to $0.15 per share.

Financials (-1.2%) fell as much as 2.5%, hitting their lowest level since 2003. The sector managed to stage a modest recovery, cutting its loss in half by the end of the day. Goldman Sachs (GS 183.05, +3.61) provided leadership, after its stock advanced in response to several positive brokerage comments.

Crude oil rose 1.7% to $136.30 per barrel after trading in a volatile manner throughout the session. The government's weekly energy report showed a smaller-than-expected drop in crude inventories, and an unexpected decline in gasoline stockpiles.

Weakness was broad-based on Wednesday, with all of the ten economic sectors posting a loss, and 78% of S&P 500 components settling the day in the red. However, there were several positive corporate items.

Pharmaceutical giant Pfizer (PFE 17.79, +0.07) said its cholesterol drug Lipitor will not face generic competition for an extra 20 months after reaching a settlement with Ranbaxy Laboratories. The agreement will have a significant impact on Pfizer's earnings, considering in 2007 Lipitor -- the world's best selling drug -- accounted for $12.6 billion of Pfizer's $48.4 billion in revenue.

General Mills (GIS 62.68, +1.95) saw some buying interest after strong sales prompted the company to issue upside earnings guidance for its latest quarter and for fiscal year 2008.

Despite increasing energy costs, trucking company YRC Worldwide (YRCW 17.68, +0.90) reaffirmed its second quarter guidance, giving its shares a 5% boost. Its strength helped the Dow Transportation Average outperform with a 0.3% gain, despite the dour outlook from FedEx.

Boeing (BA 74.68, +0.30) will get another chance to bid on the aerial refueling tanker contract for the Air Force after the Government Accountability Office declared the Air Force made a "number of significant errors." This is a blow to Northrop Grumman (NOC 70.00, -1.09), the original winner of the contract. The deal could be worth up to $40 billion.DJ30 -131.24 NASDAQ -28.02 NQ100 -1.1% R2K -0.8% SP400 -0.8% SP500 -13.12 NASDAQ Adv/Vol/Dec 790/2.06 bln/2050 NYSE Adv/Vol/Dec 850/1.28 bln/2246