Reply #95: Nighty night.

[ozymandius]

Dow 11,632.38 Up 29.88 (0.26%)
Nasdaq 2,325.88 Up 21.92 (0.95%)
S&P 500 1,282.19 Up 5.19 (0.41%)
10-Yr Bond 4.1480% Up 0.0510
NYSE Volume 6,778,005,500
Nasdaq Volume 2,759,664,750

4:30 pm : Wednesday marked an active session for Wall Street, with 110 companies releasing their quarterly results, including four Dow components. In addition, the government announced its weekly energy statistics and the Fed released its Beige Book.

The stock market settled with a modest gain of 0.4% in volatile and heavy trade. The advance was aided by a steep drop in crude prices and several better-than-expected earnings reports. The Nasdaq outperformed its counterparts thanks to strength in large-cap tech names.

Defensive investments, such as the utilities sector (-2.3%), underperformed, while beaten-down areas saw a surge in buying interest, as investors showed more willingness to take on risk.

Consumer discretionary stocks rose 2.0%, with homebuilders climbing 4.0%. Automakers rose 3% after General Motors (GM 14.60, +0.28) forecast a 2.5% increase in global 2008 auto sales, as strong emerging market demand offsets weakness in North America. Meanwhile, retailers advanced (+2.4%) after crude prices took a tumble.

Oil prices fell 3.1% to $124.48 per barrel, marking its lowest level in more than six weeks. Crude inventory levels fell by a larger-than-expected amount, but an increase in gasoline stockpiles raised concerns of demand destruction.

The drop in oil prices weighed heavily on the energy sector (-3.8%), but provided a huge lift to airline stocks (+8.5%).

Commodities as a whole fell 1.7%, with gold shedding 3.1% as the dollar rose 0.5%. As a result, the materials sector (-1.7%) underperformed.

The financial sector was once again in focus after Washington Mutual (WM 4.65, -1.17) reported a larger-than-expected second quarter loss of $3.3 billion. The sector managed to gain as much as 4.6% on news that lawmakers reached a deal on a housing bill that, among other things, will allow for financial aid to Fannie Mae (FNM 15.00, +1.59) and Freddie Mac (FRE 10.80, +1.10) if need be. Financials slipped off their best levels, to settle the day with a gain of 1.9%, after WaMu reversed into the red on concerns that it will have to raise more capital. The financial sector is up 34% since July 15, but is still down 23% this year.

Earnings results were mostly better than expected. Anheuser-Busch (BUD 67.36, +0.11), ConocoPhillips (COP 81.83, +2.48), Exelon (EXC 81.41, -0.22), General Dynamics (GD 89.27, +5.82), Norfolk Southern (NSC 69.96, +4.27), McDonald's (MCD 59.66, +0.46), PepsiCo (PEP 67.70, +1.51), Pfizer (PFE 19.09, +0.74), WellPoint (WLP 53.17, +4.42) and Wyeth (WYE 45.55, +0.87) all reported earnings that topped Wall Street forecasts, and increased earnings per share versus the prior year.

AT&T (T 33.06, +1.24) rallied after reporting an 8.6% rise in earnings per share, which met Wall Street's forecast.

There were some earnings misses as well. Boeing (BA 66.72, -2.54), E*Trade (ETFC 3.41, -0.64), Washington Mutual and Yahoo! (YHOO 20.39, -1.01) fell short of estimates.

Costco (COST 63.43, -8.57) warned that its earnings per share for its quarter ending in August will fall "well below" the current consensus estimate of $1.00. Costco cited increased inflation, especially energy costs, and a larger-than-expected LIFO accounting charge. Wal-Mart (WMT 58.09, -0.97), operator of Sam's Club, fell in conjunction with Costco.

The Fed's Beige Book, a collection of anecdotal economic information, prompted a brief drop in stocks, but the market quickly recovered from the knee-jerk reaction as much of the information was already known. The report stated that the economy has "slowed somewhat" since the previous report, and that there were increased price pressures. In addition, consumer spending was "mixed, weak or slowing" in nearly all districts.DJ30 +29.88 NASDAQ +21.92 NQ100 +1.3% R2K +0.3% SP400 +0.1% SP500 +5.19 NASDAQ Adv/Vol/Dec 1615/2.73 bln/1224 NYSE Adv/Vol/Dec 1973/1.72 bln/1191