Dow Jones 30: Industrials Index

[setravis]

Closing Bell Halts Late Rally.......


7/18/2007


Stocks closed to the downside Wednesday, but a late rush of buying interest allowed the market to finish well above its session lows.

After falling by as many as 148 points, the Dow Jones Industrial Average pared its losses and ended off 53.33 points, or 0.38%, to 13,918.22. The S&P 500 declined 3.20 points, or 0.21%, to 1546.17, and the Nasdaq Composite lost 12.80 points, or 0.47%, at 2699.49.

"A 100-point pullback on the Dow would've been nothing after the strong rally we've had," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "If investors were willing to walk away with that loss, they must feel positive the market came back some before the close. This tells me that liquidity is still out there and people are still seeing value on the dips."

About 3.63 billion shares changed hands on the New York Stock Exchange, as decliners edged advancers by a 2-to-1 margin. Volume on the Nasdaq reached 2.26 billion shares, with losers outpacing advancers 3 to 2.

Throughout the day, investors sorted through a crush of earnings news, much of it from big tech names and from components of the Dow, plus a variety of economic data and testimony on Capitol Hill from Federal Reserve Chairman Ben Bernanke.

After the previous close, Intel (INTC:) said its second-quarter profit jumped 44% and surpassed Wall Street's targets, but gross margins were weaker than had been anticipated. Yahoo! (YHOO:) also let down its fans, reducing its third-quarter and full-year forecast.

Both stocks gave back nearly 5%.

Those two reports came after a session in which the Dow got past the 14,000 mark for the first time in its history. However, by the end of trading the gains had been trimmed and the industrials finished up 20.57 points, or 0.15%, at 13,971.55. Still, that was its fourth straight record close.

Among those reporting earnings ahead of the open, Pfizer (PFE:) missed analysts'' estimates but reaffirmed its guidance for 2007 and 2008. The stock slid 83 cents, or 3.2%, to close at $25.13.

Fellow Dow components JPMorgan Chase (JPM:) , United Technologies (UTX:) and Altria (MO:) were better than analysts were expecting.

"There are problems out there as we've been going to new highs, including energy prices and housing worries. Earnings were powering us, and people were happy until we got the Intel and Yahoo! reports. It's a bump in the road for the time being," said Paul Mendelsohn, chief investment strategist with Windham Financial.

Also weighing on sentiment was news that Bear Stearns (BSC:) has told investors that investments in two subprime-related funds are nearly worthless. Shares of Bear Stearns dipped 57 cents, or 0.4%, to $139.34.

Fed Chairman Bernanke discussed the detrimental effects of a subprime slump when he appeared in front of the House financial services committee in the first of two days of congressional testimony.

Although Bernanke acknowledged that conditions in the subprime sector have deteriorated significantly, he pointed out that "credit spreads remain near the low end of their historical ranges, and financing activity in the bond and business loan markets has remained fairly brisk."

He also reiterated his belief that inflation remains the biggest risk to the U.S. economy, and that the upside risk keeps the Fed's core personal consumption expenditure forecast for the fourth quarter at 2% to 2.25%.

"In short, Mr. Bernanke and his colleagues seem determined not to offer even a hint that they might be considering any change in policy in the near future," said Ian Shepherdson, chief economist with High Frequency. "Only if their projections prove substantially incorrect, and growth and inflation a lower than they expect, and the labor market loosens, will they ease."

Energy prices remained another sticking point for investors, as crude continued to hover near $75 a barrel following the Energy Department's weekly inventory report.

The data showed an unexpected draw of 2.3 million barrels in gasoline inventories last week. Distillate stocks eased by 200,000 barrels, while crude inventories fell by 500,000 barrels.

The front-month August contract was higher by $1.03 to end at $75.05 a barrel, and gasoline rose 9 cents to $2.19 a gallon.

Little relief was found on the economic docket. The Labor Department's consumer price index climbed 0.2% for June, slightly ahead of expectations. However, the core index, which excludes food and energy prices, matched estimates with a 0.2% rise.

The closely monitored core inflation figure is now up 2.2% over the past 12 months, unchanged from May.

The data follow Tuesday's producer price index, which fell a greater-than-expected 0.2% in June. The core PPI rose 0.3%, slightly above estimates. The PPI report measures inflation at the wholesale level.

The CPI is considered the more important of the two when it comes to influencing Fed decisions on interest rates, but both are factored into the central Bank's planning.

At the same time, the Census Bureau said U.S. housing starts rose a greater-than-expected 2.3% in May to 1.47 million annualized units. On average, economists expected new construction to total 1.45 million units.

The report did have some soft points, as building permits dropped 7.5% to 1.40 million last month, below the expected 1.49 million annual pace.

Following the data, Treasuries gained ground. The 10-year note rose 10/32 in price, yielding 5.01%, and the 30-year bond was higher by 19/32, yielding 5.10%.

Meanwhile, more deals were in the works, including a potential play for one of the nation's biggest retailers.

According to a report, Kohlberg Kravis Roberts is working with Goldman Sachs (GS:) on a way to take Macy's (M:) private in a $24 billion transaction. The department store operator has been the subject of buyout rumors for several weeks. Macy's jumped $3.06, or 7.6%, to finish at $43.09.

Later in the day, a source told TheStreet.com that Goldman isn't involved.

Elsewhere, Dow Jones (DJ:) said its board has given its blessing to a $5 billion takeover by News Corp. (NWS:) , but the Bancroft family will have to sign off before the deal can get done. Dow Jones eased 80 cents, or 1.4%, to $55.65. News Corp. added a penny to $24.26.

Another proposal has Imperial Tobacco (ITY:) making an offer worth nearly $18 billion for Spain-based cigarette maker Altadis.

Overseas, stocks were mostly lower. Tokyo's Nikkei declined 1.1%, and Hong Kong's Hang Seng fell 0.9%. London's FTSE was off 1.4%, and Frankfurt's DAX gave back 1.8%.

Following the close, more tech giants were posting quarterly results, including eBay (EBAY:) , IBM (IBM:) and Juniper Networks (JNPR:) .

[setravis]

History Baby.......

Dow Closes Above 14,000 for First Time.......


7/19/2007


A series of solid earnings reports supported a rebound in the U.S. market Thursday, and both the Dow Jones Industrial Average and the S&P 500 closed at record highs.

The Dow finished above 14,000 for the first time ever, rising 82.19 points, or 0.59%, to 14,000.41. The S&P 500 was up 6.91 points, or 0.45%, at 1553.08, and the Nasdaq was ahead by 20.55 points, or 0.76%, to 2720.04, its best level in more than six years.

Art Hogan, chief market analyst with Jefferies, said that finishing above 14,000 on the Dow is "not necessarily a breakthrough in technical terms, although it's an important psychological one.

"Now we'll have to see if we can hold on to these gains to end the week," he continued. "The important thing about passing this milestone is that it reminds us that we've had a really good year. It also serves as a great reminder that perhaps it's time for investors to reassess their positions."

About 3.26 billion shares changed hands on the New York Stock Exchange, as advancers beat decliners by a 5-to-3 margin. Volume on the Nasdaq reached 2.24 billion shares, with winners outpacing losers 3 to 2.

The major indices fell to session lows after the 2 p.m. EDT release of the minutes from the Federal Open Market Committee's June meeting before rebounding.

At that gathering, policymakers left the fed funds target rate -- the rate banks use to charge each other interest for overnight loans -- unchanged at 5.25% for the eighth consecutive meeting.

In the statement accompanying the rate decision, the central bank said it would remain on guard against inflation, but it expressed some worry that the housing market downturn would persist for longer than previously expected.

The minutes indicated that members of the FOMC judged that the risks to economic growth were more balanced than at the May meeting, although some members pointed to "rising mortgage delinquency rates and related difficulties in the subprime mortgage market as factors that could crimp the availability of mortgage credit and the demand for housing."

The panel also reiterated its inflation concerns, saying "consumer prices were viewed as favorable, but were not seen as convincing evidence that the recent moderation of core inflation would be sustained."

The release came after Fed Chairman Ben Bernanke appeared for his second day of congressional testimony, this time before a Senate panel on Capitol Hill.

A day ago, he touched upon the detrimental effects of the subprime slump. He also repeated his case that inflation remains the biggest potential trouble spot for the U.S. economy, and that the upside risk keeps the Fed's core personal consumption expenditure forecast for the fourth quarter at 2% to 2.25%.

Following the second round of his testimony, Treasury prices were little changed. The 10-year note was static in price, yielding 5.03%, and the 30-year bond was higher by 4/32, yielding 5.11%.

On Wednesday, the major indices ended lower, but a rally near the close kept the selloff from being much worse. The Dow had been down more than 140 points before cutting into the losses and finishing off 53.33 points, or 0.38%, to 13,918.22.

Similarly, the S&P and the Nasdaq went out well ahead of their weakest points of the day.

Helping draw in the bulls was the latest crush of earnings. After the prior close, eBay (EBAY:) topped estimates and guided its profits higher for the full year, and IBM (IBM:) , a Dow component, was also better than expected.

However, concerns about online operations hampered eBay's stock, which lost 1.6% to $33.50. IBM, on the other hand, advanced 4.3% to $115.86.

Another winner was Juniper (JNPR:) , which saw its shares climb after the networker raised its sales forecast. Juniper jumped $3.25, or 12.2%, to $29.98.

Following the most recent close, even more tech giants were posting numbers, including Google (GOOG:) , Microsoft (MSFT:) and Advanced Micro Devices (AMD:) .

Dozens more companies posted their results before the open. German business software giant SAP (SAP:) said second-quarter revenue and operating income jumped 10%, and Dow stock Honeywell (HON:) easily beat the Thomson First Call consensus.

Bank of America (BAC:) , UnitedHealth (UNH:) , Continental Airlines (CAL:) and Bank of New York (BK:) all exceeded targets, as did Wyeth (WYE:) and Motorola (MOT:) .

Elsewhere, Hershey (HSY:) was in line with expectations, but offered sluggish guidance, and PNC Bank (PNC:) was one of the few notables missing their estimated quarterly results. Hershey fell 3% to $48.45, and PNC Bank slipped 2.5% to $71.37.

A raft of economic data also influenced trading. The Labor Department said that initial jobless claims fell by 8,000 last week to 301,000 claims. The less-volatile four-week moving average decreased by 6,250 to 312,000.

Other economic releases were slightly disappointing. The Conference Board said its leading economic indicators for June fell an unexpected 0.3%. Also, the Philadelphia Federal Reserve said its July mid-Atlantic manufacturing survey fell to 9.2 from 18.0 in June, well below consensus.

Meanwhile, traders ignored crude prices that remained stubbornly strong. The front-month August contract rose 87 cents to finish at $75.92 a barrel and is now roughly $2.50 from its all-time intraday high. Gasoline prices were unchanged at $2.19 a gallon.

"Investors are willing to tolerate higher rates and higher oil prices if the cause is expanding economic growth," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "They are a little less happy if we have to deal with these issues and face an economy still languishing below trend."

Among analyst actions, Bank of America had a broad call on the energy sector, initiating coverage of a number of names.

Baker Hughes (BHI:) , Schlumberger (SLB:) , Halliburton (HAL:) , Weatherford (WFT:) and Grant Prideco (GRP:) all received buy ratings. Each stock gained 1.7% of more.

Getting neutrals were Basic Energy Services (BAS:) , BJ Services (BJS:) and National Oilwell (NOV:) . All three finished higher by at least 1.3%.

At the same time, Bernstein downgraded the U.S. refining industry to underperform and cut its ratings on Sunoco (SUN:) and Valero Energy (VLO:) . Sunoco fell $2.03, or 2.5%, to $77.82. Valero slid $1.41, or 1.9%, to $74.52.

Overseas, stocks were uniformly higher. Tokyo's Nikkei rose 0.8%, and Hong Kong's Hang Seng gained 0.8%. London's FTSE was up 1.1%, and Frankfurt's DAX added 1.2%.

The economic docket is empty Friday, and the earnings torrent looks to be more manageable. Among those due to report are Citigroup (C:) , Caterpillar (CAT:) and Boston Scientific (BSX:) .

[setravis]

Profit Misses Slam Stocks.......


7/20/2007


Stocks in New York sank Friday as investors fretted about a stumble at search giant Google (GOOG:) and a wide earnings miss at industrial-equipment maker Caterpillar (CAT:) .

The Dow Jones Industrial Average fell 149.33 points, or 1.07%, to 13,851.08. The S&P 500 was down 18.98 points, or 1.22%, at 1534.10, and the Nasdaq Composite lost 32.44 points, or 1.19%, at 2687.60.

At its worst, the Dow fell more than 200 points.

The steep decline ensured that the major averages would finish the week with losses. Over the five sessions, the Dow slipped 0.4%, the S&P 500 slumped 1.2%, and the Nasdaq finished the week lower by 0.7%.

"We can't tell if the rally earlier this week was a breakout or a fake-out," said Paul Nolte, director of investments with Hinsdale Associates. "Despite hitting records, we're stuck in a trading range now. Any disappointment to this market will be an expensive one. However, when you look at the declines this week, they weren't much in the grand scheme of things."

About 3.66 billion shares changed hands on the New York Stock Exchange, and volume on the Nasdaq reached 2.37 billion shares. Losers outpaced advancers 3 to 1.

Weighing on the mood was Google, whose earnings shortfall after the last close stunned investors and analysts. Shares plummeted by $28.47, or 5.2%, to $520.12 in the wake of the numbers.

Another trouble spot was Cat, which reaffirmed its earnings and revenue forecast for the year, but reported that last quarter came in well shy of what had been anticipated. Despite keeping its outlook intact, Cat tumbled $3.78, or 4.4%, to $83.20 and was the biggest loser on the Dow.

The weakness came just a day after the market rode a wave of strong earnings to the upside, and both the Dow and the S&P 500 closed at record highs.

The Dow finished above 14,000 for the first time ever, tacking on 82.19 points, or 0.59%, to 14,000.41. The S&P advanced 6.91 points to 1553.08, and the Nasdaq surged 20.55 points to 2720.04, its best reading in more than six years.

Other earnings were positive, but they weren't able to offset the pressure from Google and Cat. Citigroup (C:) beat Wall Street's profit estimates, and Schlumberger (SLB:) and Whirlpool (WHR:) also got past expectations.

Citigroup slid 0.8% to $50.73, and Whirlpool dropped 5.3% to close $110.43. Schlumberger added 3.5% to $96.68.

Elsewhere, wireless-gear maker Ericsson (ERIC:) had light numbers, while at Microsoft (MSFT:) , fourth-quarter revenue jumped 13% from a year ago and earnings met analyst targets. Ericsson fell 5.4% to end the day at $39.84, and Microsoft lost 1.1% to $31.16.

"Obviously, there are quite a few disappointing earnings reports that [were] holding us back," said Peter Cardillo, chief market economist with Avalon Partners. "Still, the earnings that have come out so far have been strong, and there have been no major surprises. The trend still looks good and, when it's all said and done, it should still be a positive earnings season."

In the absence of any economic data, Treasury prices rallied to their weakest levels in more than a month. The 10-year note rose 15/32 in price, yielding 4.96%, and the 30-year bond was higher by 21/32, yielding 5.06%.

Meanwhile, crude retreated yet remained stubbornly close to its all-time high. Oil prices shed 35 cents to close $75.57 a barrel, but finished with a gain of 2.2% for the week. Gasoline prices were off by 2.5 cents at $2.16 a gallon.

"In terms of inflationary pressures, oil is now near that limit," said Cardillo. "It could have a negative impact on the market if we get near $80 a barrel. Anything above that level could really spook the market, as higher energy and a falling dollar would be long-term negatives."

On the research front, UBS upgraded both Yum! Brands (YUM:) and Forest Labs (FRX:) to buy from neutral. Still, Yum! closed down 16 cents, or 0.5%, to $34.13. Forest Labs was lower by $1.65, or 3.7%, to $42.98.

Among downgrades, JPMorgan cut video-game maker Activision (ATVI:) to neutral from overweight, and Stifel Nicolaus reduced its rating for Hilton Hotels (HLT:) to hold from buy.

Activision gave back 29 cents, or 1.6%, to $18.19. Hilton, which agreed to a $20 billion buyout by Blackstone Group (BX:) earlier this month, slipped 24 cents, or 0.5%, to $44.91.

Overseas, markets were mixed. In Europe, Frankfurt's DAX decreased 1.5% and London's FTSE eased 0.8%. In Asia, Tokyo's Nikkei edged up 0.2%, and Hong Kong's Hang Seng was better by 1.2%.

[setravis]

Merger Monday Lifts Stocks.......


7/23/2007


Stocks in New York opened the week on a high note, as a string of buyouts and upbeat earnings reports had traders moving to scoop up equities Monday.

The Dow Jones Industrial Average closed with a gain of 92.34 points, or 0.67%, to 13,943.42. The S&P 500 was up 7.47 points, or 0.49%, to 1541.57, and the Nasdaq Composite advanced 2.98 points, or 0.11%, to 2690.58.

Robert Pavlik, chief investment officer with Oaktree Asset Management, said the rebound from Friday's selloff should give investors confidence in the market.

"This earnings reporting season has been very decent, and traders are now hopeful that the negative reports we've had will be the exceptions rather than the norm," he said.

About 3.14 billion shares changed hands on the New York Stock Exchange, as decliners matched advancers. Volume on the Nasdaq reached 2.06 billion shares, with losers outpacing advancers 8 to 7.

Brightening the mood were several mergers, including a mammoth combination that will see oil drillers Transocean (RIG:) and GlobalSantaFe (GSF:) join forces. The combined company will have an enterprise value of $53 billion, and shareholders will receive cash totaling $15 billion.

Transocean climbed 5.5% to $115.96, and GlobalSantaFe added 4.8% to $78.33.

Another deal had Cerberus, a private-equity firm, setting plans to acquire United Rentals (URI:) for $2.83 billion, and Barclays (BCS:) has raised its bid for ABN Amro (ABN:) to more than $93 billion.

Barclays rose 2.9% to $60.35, and United Rentals added 1.9% to $32.98. ABN Amro dipped 0.1% to $50.78.

Elsewhere, Arrow International (ARRO:) agreed to be bought by Teleflex (TFX:) for $2 billion, and ev3 (EVVV:) and FoxHollow (FOXH:) will merge in a $780 million transaction.

The profit reports were also solid for the most part. Merck (MRK:) easily beat analysts'' estimates and raised its guidance, while Schering-Plough (SGP:) and Halliburton (HAL:) also topped expectations.

Merck gained 6.8% to $52.33, and Halliburton was higher by 3.2% to $37.74. Schering ended the day lower by 0.6% to $31.30.

Additionally, Hasbro (HAS:) and Taser (TASR:) exceeded Wall Street's targets. Still, Hasbro sank 5.4% to $30.80, and Taser lost 3.4% to finish at $16.56.

"It's going to be all about earnings this week," said Peter Cardillo, chief market economist with Avalon Partners. "With one-third of the S&P reporting this week, it's going to be the main driving force. Now that options expiration is behind us, we can catch our breath."

The market's rebound came after a drubbing in the previous session. Weak numbers from Google (GOOG:) and Caterpillar (CAT:) slammed the market last time out, and the Dow fell 149.33 points, or 1.07%, to 13,851.08. The S&P 500 declined 18.98 points, or 1.22%, at 1534.10.

At the same time, the Nasdaq dropped 32.44 points, or 1.19%, at 2687.60. All three major averages were lower for the week.

In the absence of any economic data, Treasury prices were little changed. The 10-year note was down 3/32 in price, yielding 4.97%, and the 30-year bond was off 5/32, yielding 5.07%.

Meanwhile, the September crude contract traded as the front-month benchmark for the first time. Oil dropped 90 cents to close at $74.89 a barrel, and gasoline prices were lower by 6 cents at $2.10 a gallon.

On the research front, Citigroup upgraded both Amgen (AMGN:) and Anheuser-Busch (BUD:) to hold from sell. Amgen gained 62 cents, or 1.1%, to $56.80. Anheuser-Busch added 59 cents, or 1.2%, to $50.22.

Among downgrades, Banc of America Securities cut ConocoPhillips (COP:) to neutral from buy, and Matrix Research reduced its rating for Freeport-McMoRan (FCX:) to buy from strong buy. ConocoPhillips was lower by 67 cents, or 0.8%, to $85.63. Freeport-McMoRan was off by 4 cents at $98.99.

Overseas, markets were mostly higher. London's FTSE added 0.6%, while Frankfurt's DAX was up 0.9%. In Asia, Tokyo's Nikkei slid 1.1%, but Hong Kong's Hang Seng was better by 0.3%.

Following the close, Texas Instruments (TXN:) and fellow chipmaker Altera (ALTR:) were reporting second-quarter results.

The earnings barrage will continue before Tuesday's open, when such names as AT&T (T:) , McDonald's (MCD:) , UPS (UPS:) and DuPont (DD:) are due to report.

Amazon.com (AMZN:) and homebuilder Centex (CTX:) will post quarterly results later in the day.

[setravis]

Credit Worries Wallop Stocks.......


7/24/2007


Stocks slid hard Tuesday as new worries about the credit arena and a profit shortfall at DuPont (DD:) overshadowed another round of mostly solid earnings reports elsewhere.

The Dow Jones Industrial Average lost 226.47 points, or 1.62%, to 13,716.95. The S&P 500 fell 30.53 points, or 1.98%, to 1511.04, and the Nasdaq plunged 50.72 points, or 1.89%, to 2639.86.

Traders were focusing on the negatives, including the fact that DuPont, a component of the Dow, missed second-quarter expectations. The chemicals concern kept its full-year forecast, but shares slid $3.36, or 6.3%, to end at $49.90.

A disappointment from Texas Instruments (TXN:) , which reported after the previous close, hit tech stocks. The chipmaker said its second-quarter earnings were in line with consensus targets but down from a year ago, and its sales outlook was on the light side. TI fell $1.72, or 4.5%, to $36.46.

Weighing further on the market were renewed concerns about debt, which have popped up several times in recent months. After the previous close, American Express (AXP:) topped analysts'' profit estimates, but the financial services giant said it had to increase its loan-loss reserve because of a higher rate of delinquencies.

The Dow component's stock lost $3.49, or 5.4%, to close at $61.17.

Meanwhile, lender Countrywide (CFC:) missed by a wide margin, citing increased credit-related costs, and lowered its 2007 guidance, saying the second half will be challenging. It also said liquidity for mortgage securities has been reduced. Shares of Countrywide tumbled $3.56, or 10.5%, to $30.50.

"There's fear entering certain parts of the market, and we're seeing a risk adjustment taking place," said Paul Mendelsohn, chief investment strategist with Windham Financial. "This shift could be foreshadowing something bigger, as everyone could run for the door at the same time. Once markets start picking up momentum, they tend to keep moving because everyone's on the same side."

Virtually every sector finished with losses. Among the worst decliners, the Amex Oil Index dropped 3.5%, the Philadelphia Utility Index slumped 3.5%, the Nasdaq Financial Index fell 3%, and the KBW Bank Index lost 3%.

Apple (AAPL:) , which will post earnings late Wednesday, contributed to the tech sector's slide amid speculation the iPhone maker will miss sales targets for the new gadget. Shares tumbled 6.1% to $134.89.

Trading curbs were put into effect on the New York Stock Exchange for the first time since March 13, when subprime fears surrounding New Century (NEWCQ:) and Accredited Home Lenders (LEND:) first became a force and sank the major averages.

About 3.91 billion shares changed hands on the NYSE, as decliners toppled advancers by a 9-to-1 margin. Volume on the Nasdaq reached 2.46 billion shares, with losers outpacing advancers 5 to 1.

Another setback came from General Motors (GM:) , which, according to a report in The Wall Street Journal, is having trouble raising debt for its Allison engine unit. The division is trying to raise funds to complete a leveraged buyout. GM shed 47 cents, or 1.3%, to $34.65.

However, it wasn't all bad, despite the pullback. AT&T (T:) was better than expected on the profit line, as were Lockheed Martin (LMT:) and CME (CME:) . While AT&T and CME declined, Lockheed Martin shot higher by 3.6% to $103.09.

British oil major BP (BP:) said earnings rose 1.5%, and Eli Lilly (LLY:) exceeded estimates and lifted its projections. BP dipped 2.9% to $72.30, while Eli Lilly finished the day unchanged at $57.17.

Pepsi (PEP:) , EMC (EMC:) and McGraw-Hill (MHP:) were also better than expected, as were UAL (UAUA:) and Northrop Grumman (NOC:) . UAL was the only name in the group to finish with gains, ending higher by 4.2% for the session.

Dow stock McDonald's (MCD:) posted only its second-ever quarterly loss. Excluding items, the restaurant chain matched the forecast for a profit of 71 cents a share. Shares slipped 95 cents, or 1.8%, to finish at $51.55.

On the research front, Citigroup upgraded Wachovia (WB:) to buy from hold, citing valuation. Still, shares closed lower by 41 cents, or 0.8%, to $48.41.

Among downgrades, Jefferies cut both United Rentals (URI:) and GlobalSantaFe (GSF:) to hold from buy. United Rentals was off by 56 cents, or 1.7%, to $32.42. GlobalSantaFe ended down 73 cents, or 0.9%, to $77.60.

On Monday, both stocks made M&A headlines and gave the major averages a boost. Transocean (RIG:) said it will combine with GlobalSantaFe to form a driller with an enterprise value of $53 billion. Private-equity firm Cerberus said it will acquire United Rentals for $2.83 billion.

Away from stocks, the front-month September crude contract sank for a second session. Oil dropped $1.33 to $73.56 a barrel. Gasoline prices were lower by 5 cents at $2.05 a gallon.

"Because oil prices were down so much today, a lot of oil stocks were under pressure," said Mendelsohn. "There is no sector to pick up the slack today. Unless something causes the financial sector to bottom, I don't see any other sector big enough to pick up the slack and carry this market."

With the economic docket vacant, Treasury prices were little changed. The 10-year note tacked on 2/32 in price, yielding 4.95%, and the 30-year bond was flat, yielding 5.06%.

Overseas, stocks rose in Asia and declined in Europe. Tokyo's Nikkei added 0.2%, and Hong Kong's Hang Seng climbed 0.5%. London's FTSE shed 1.9%, and Frankfurt's DAX was off 1.7%.

Following Tuesday's close, Amazon.com (AMZN:) and homebuilder Centex (CTX:) will post quarterly results.

The earnings torrent will continue before the next open, when such names as Boeing (BA:) , ConocoPhillips (COP:) , Corning (GLW:) , and WellPoint (WLP:) are due to report.

[setravis]

Reuters
Futures jump on Boeing, Amazon.com optimism
Wednesday July 25, 8:17 am ET
By Ellis Mnyandu


NEW YORK (Reuters) - Stock index futures rose on Wednesday as solid profits and positive outlooks from plane maker Boeing Co (NYSE:BA - News) and Web retailer Amazon.com Inc. (NasdaqGS:AMZN - News) overcame worries about the housing slump.


The recovery followed stocks' worst one-day performance in four months on Tuesday after disappointing earnings and increased concern about the impact of housing losses on the economy.

Shares of Boeing, a Dow component, rose 6 percent to a record in electronic trading before the bell, while Amazon.com shot up 23.8 percent as several brokerages raised their ratings on the stock.

"The earnings picture is really driving day-to-day activity here. One day you have misses, the market gets beaten up, and the next day you have good news, they raise it," said Peter Dunay, investment strategist at Leeb Capital Management in New York.

"It's looking like earnings will be ahead of estimates on the overall quarter, but it probably won't be a blow-away quarter, which is why you're seeing volatility."

S&P 500 futures were up 6.7 points, above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures were up 61 points, and Nasdaq 100 futures were up 7.50 points.

Investors may also get direction from data on existing-home sales in June due at 10 a.m. (1400 GMT). The data will be scrutinized for signs of further deterioration in the real estate market.

Existing-home sales are forecast to have fallen to a 5.87 million-unit annual rate from 5.99 million in May, according to a Reuters poll of economists.

In other earnings news, office printer supplier Xerox Corp (NYSE:XRX - News) posted a quarterly profit that beat Wall Street's estimates by a penny.

Colgate-Palmolive Co (NYSE:CL - News), maker of personal care products, also posted a higher quarterly profit, driven by improvements from its continuing restructuring plan and higher sales. (ID:nN25297913).

Boeing shares rose to $110, while those of Amazon.com rose to $85.75. Other earnings reports due on Wednesday include those of iPod and iPhone maker Apple Inc (NasdaqGS:AAPL - News) and oil company ConocoPhillips (NYSE:COP - News).

Financial results of the largest U.S. mortgage lender, Countrywide Financial Corp. (NYSE:CFC - News), and a gloomy outlook from building materials maker USG Corp (NYSE:USG - News) on Tuesday helped trigger the market sell-off.

[setravis]

How about this?

Contrarian analysis says Tuesday's drop not start of bear market
12:01 a.m. 07/25/2007 By Mark Hulbert
Commentary: Contrarians see little evidence major bear market has begun

ANNANDALE, Va. (MarketWatch) -- When I filed my previous column late Monday night, I of course had no idea that the stock market would have such an awful day on Tuesday.

I wrote in that column that the stock market was showing signs of fatigue, and that this wasn't good news.

As fate would have it, of course, the Dow Jones Industrial Average plunged 226 points on Tuesday, turning in its worst one-day performance since March.

Is the market still tired? Or will Tuesday's rout be enough to re-energize the market into mounting a fresh assault on new highs?

For insight, I turn to the investment newsletters. Taking a contrarian perspective, I am eager to see where we stand on the spectrum that ranges from excessive optimism (which would be very bearish) to excessive pessimism (which would be bullish).

Interestingly, I don't see much evidence of the exuberance and enthusiasm that is typically seen at major tops.

Consider the latest readings of the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest. As of Tuesday night, the HSNSI stood at 44.5%.

To put that in context, the historical range for the HSNSI extends from 79.7% on the high side to minus 81.8% on the low end. (Negative values mean that the average short-term market timer is net short the market.)

So while the editor of the average market timing newsletter is closer to the optimism end of the spectrum than the pessimism end, he is still a long way away from that extreme of optimism - some 35 percentage points, in fact.

This in itself is an encouraging sign. But even more encouraging is where the HSNSI stands relative to where we would normally expect it to be, given the strength in the market in recent months.

Imagine where we would have forecast the HSNSI to stand today if, at the beginning of the year, we were told that the Dow would close above 14,000 in late July. The Dow at the time was trading at 12,463, and the HSNSI stood at 65.3%. I don't know about you, but I would have guessed that the HSNSI would also be higher - perhaps at or above its previous all-time high of 79.7%.

Yet, far from rising in the wake of the market's impressive strength, the HSNSI has dropped markedly.

Another comparison that is bullish: In late February, the day before the so-called Shanghai Surprise that shed 416 points off the Dow, the HSNSI stood at 62.4%. The editor of the average market timing newsletter is a lot more subdued today, and yet the market relatively quickly recovered from that correction.

A number of you have written in recent weeks to press about how much confidence one should place in contrarian analysis in general, and the HSNSI in particular. So let me say a few things that I think you should keep in mind:

The bottom line? Anything can happen. But, from the perspective of a contrarian analysis of sentiment among investment newsletters, odds favor that the market will soon recover from Tuesday's decline and will trade at new all-time highs sometime in the next three months.

[setravis]

Stocks End Rocky Day Higher.......


7/25/2007


Stocks closed a volatile session to the upside Wednesday, as optimism following a big quarter at Amazon.com (AMZN:) overcame a disappointing report on housing and a sharp rise in oil prices.

The Dow Jones Industrial Average, which swung between a range of nearly 150 points, finished with a gain of 68.12 points, or 0.5%, at 13,785.07. The S&P 500 tacked on 7.05 points, or 0.47%, at 1518.09. The Nasdaq Composite rose 8.31 points, or 0.31%, to 2648.17.

The gains came amid a solid round of earnings reports, with Internet giant Amazon leading the way. The company's results, reported after the prior close, easily exceeded analyst estimates, and Amazon sounded optimistic tones on the rest of the year.

Several research firms raised their ratings on the stock, including Credit Suisse, JPMorgan, Lehman and Bear Stearns. Amazon soared by $16.93, or 24.5%, to end the day at $86.18.

The major averages ran into trouble, though, after the release of the National Association of Realtors'' report on existing-home sales for June. Sales dropped 3.8% to 5.75 million annualized units, the lowest level since November 2002. Following the report, the Philadelphia Housing Sector Index slid 0.5%

" [The data] is just horrible," said Ian Shepherdson, chief economist with High Frequency Economics. "Second-quarter sales fell at a 28% annualized rate, the fastest decline so far in this crunch. Housing is contracting at an accelerating pace, taking out with a vengeance the brief stabilization at the turn of the year, when mild weather and plunging gas prices supported activity."

Also adding to volatility was word that Chrysler's investment bankers are delaying a $12 billion debt sale for the automaker. That news appeared in The Wall Street Journal and cited a source close to the situation.

Though the report said the postponement shouldn't affect the plan by Cerberus to buy most of Chrysler from DaimlerChrysler (DCX:NYSE) , it did ensure that investors remain on edge about the credit market. Despite the news, shares of the automaker rose $3.57, or 4%, to close at $93.02.

Worries about the debt arena helped drive stocks lower Tuesday, and the Dow plunged more than 225 points. The S&P 500 lost 30.53 points, or 1.98% on the day, to 1511.04, and the Nasdaq sank 50.72 points, or 1.89%, to 2639.86.

Energy prices were in focus in the new session, as the Energy Department posted its weekly inventory report. The data showed a draw of 1.1 million barrels from crude inventories last week. Distillate stocks rose 1.5 million barrels, and gasoline inventories increased by 800,000 barrels last week.

Meanwhile, news of a Canadian oil pipe rupture raised supply concerns. The front-month September crude contract jumped $2.32 at $75.88 a barrel. Gasoline prices added 4 cents to $2.08 a gallon.

"We had some real good earnings today, and that has now outweighed the housing report in investor's mind," said Peter Cardillo, chief market economist with Avalon Partners. "Oil tried to be the spoiler today, but traders are not paying attention to it."

Despite the strong finish, breadth remained negative. About 3.97 billion shares changed hands on the New York Stock Exchange, as decliners topped advancers by a 5-to-3 margin. Volume on the Nasdaq reached 2.49 billion shares, with losers outpacing advancers 8 to 7.

While virtually every market sector finished with losses Tuesday, many recovered and closed with advances Wednesday. Among the winners, the Philadelphia Oil Service Sector Index added 2.1%, the Nasdaq Biotech Index was higher by 1.6%, the Amex Oil Index climbed 1.1%, and the Nasdaq Financial Index rose 0.4%.

Art Hogan, chief market analyst with Jefferies, said the major averages ultimately finished higher because there was so much good news on the earnings front.

"It would take a pretty big disappointment to bring us down, as I think we are oversold following yesterday's decline," he said. "There's not much that will slow down this recovery."

Aside from Amazon, the rest of corporate America generally was continuing to offer numbers that were better than expected. Boeing (BA:) , Hess (HES:) and General Dynamics (GD:) were among the early reporters that beat Wall Street's targets.

Boeing was the top performer on the Dow, finishing higher by 3.3% to $107.23. General Dynamics gained $2.79, or 3.5%, to $83.09, boosting the defense sector.

Also topping estimates were Xerox (XRX:) and Corning (GLW:) . Both of those companies issued forecasts that were in line with analysts'' views, while WellPoint (WLP:) edged up its projections.

Likewise, two major names from Japan, Nintendo (NTDOY:) and Honda (HMC:) , raised their outlooks.

The market also digested the 2 p.m. EDT release of the Federal Reserves regional business survey, known as the beige book.

The report said that U.S. economic activity continued to expand in the 12 districts at a modest or moderate pace between late June and July, with many regions describing higher input costs due to petroleum prices. Consumer spending was generally positive, and most districts reported an increase in manufacturing activity, according to the report.

Treasury prices were little changed. The 10-year note was up 3/32 in price, yielding 4.90%, and the 30-year bond was flat, yielding 5.03%.

Metals prices were giving up ground. Gold was down $11 to $673.80 an ounce, and silver ended lower by 29 cents at $13.15 an ounce.

Overseas, stocks were mostly lower. Tokyo's Nikkei fell 0.8% overnight, and Hong Kong's Hang Seng slipped 0.5%. Frankfurt's DAX was off 1.5%, while London's FTSE eased 0.7%.

After the bell, computer and music-player giant Apple (AAPL:Nasdaq) weighed in with its second-quarter results. The company blew by estimates with earnings of 92 cents a share, compared with Wall Street's forecast of 72 cents.

The earnings torrent will continue before Thursday's open, when such names as ExxonMobil (XOM:) , D.R. Horton (DHI:) and Ford (F:) are due to report.

[setravis]

Stocks Slammed on Wall Street.......

7/26/2007


Stocks in the U.S. trading session were sharply lower Thursday as weak economic data and ongoing credit concerns overshadowed more positive news on the earnings front.

The Dow Jones Industrial Average was sinking 357 points, or 2.6%, to 13,428. The S&P 500 was down 45 points, or 3%, at 1473, and the Nasdaq was losing 68 points, or 2.6%, to 2581.

All three were off their worst levels.

Michael Sheldon, chief market strategist with Spencer Clarke LLC, said that it is important for investors to separate the short-term from the long-term picture during a session in which the major averages were getting walloped.

"A number of factors have contributed to this unattractive investment environment, with risk levels on the rise," said Sheldon. "However, the intermediate- to long-term picture remains positive, and this will continue to be the case as long as the U.S. economy avoids recession in the months ahead."

Traders were also monitoring the Treasury market, as prices were rallying and pushing long yields below the 5% level. The 10-year note was up 24/32 in price, yielding 4.80%, and the 30-year bond was higher by 30/32, yielding 4.96%.

John Canavan, market analyst with Stone & McCarthy Research Associates, said that growing problems in the credit and subprime markets are lifting Treasury prices.

"This impact is causing merger deals to be delayed or postponed, so the liquidity in the secondary spread market is drying up," said Canavan. "It's making it more difficult to trade this issues, so traders are seeking a safe haven until credit markets sort everything out. This is a straight flight to the Treasury market."

The shock was felt in overseas markets, as London's FTSE dropped 3.2% and Frankfurt's DAX was off 2.4%. Overnight, Tokyo's Nikkei lost 0.9%, and Hong Kong's Hang Seng declined 0.6%.

Bulls couldn't find much good news in the Day's economic releases. The government said that durable goods orders rose 1.4% in June, below the 1.9% consensus. Excluding transportation, orders fell 0.5%, compared with estimates for a 0.6% rise.

"Overall, manufacturing is not in crisis, but neither is it charging ahead," said Ian Shepherdson, chief economist with High Frequency Economics. "This supports our view that the strength in the ISM is due more or less entirely to a temporary surge in auto production and does not indicate broad or deep strength in most of the manufacturing sector."

Elsewhere on the economic docket, the Labor Department said that initial jobless claims fell by 2,000 to 301,000 last week. The four-week moving average eased by 4,000 to 308,500.

Shortly after the opening bell, the Census Bureau said new-home sales dropped a greater-than-expected 6.6% in June to 834,000 annualized units. The data come a day after the National Association of Realtors said existing-home sales for June dropped 3.8% to 5.75 million annualized units, the lowest level since November 2002.

"The credit markets are in a state of chaos, and that's where all of this is emanating from," said Paul Mendelsohn, chief investment strategist with Windham Financial. "The takeover premium that's been built into the market is falling apart. We have the stock market repricing the possibility that mergers or takeovers will not happen now.

"So far, the Federal Reserve hasn't drained the liquidity of the system, but that's happening now on it's own as the stock market corrects," he added. "Now the yen carry trade is unwinding along with this debt and stock problem. This should be specific to the financial side, but it's crossing into every sector."

Indeed, virtually every subgroup was saddled with losses. Among the worst decliners, the Amex Airline Index dropped 6.4%, the Dow Jones Transportation Average slumped 3.6%, the Nasdaq Financial Index fell 3.6%, and the KBW Banks Index lost 3.3%.

Stocks in New York have had an up-and-down week thus far. The major averages fell hard Tuesday but recovered some of that lost ground on Wednesday.

Last time out, the Dow rose 68.12 points, or 0.5%, to 13,785.07. The S&P 500 added 7.05 points, or 0.47%, at 1518.09, and the Nasdaq was better by 8.31 points, or 0.31%, to 2648.17.

Following the close, Apple (AAPL:) took center stage, and its earnings report had its shares on the move higher.

The stock jumped nearly 7% and was approaching $150 after it said third-quarter net income was 92 cents a share, topping estimates by 20 cents. Revenue rose 24% to $5.41 billion.

Elsewhere, Ford (F:) had an unexpected profit for the second quarter, with earnings from continuing operations of $258 million, or 13 cents a share. Analysts had been calling for a loss of 35 cents.

Ford was climbing 29 cents, or 3.6%, to $8.26. Rival General Motors (GM:) slid 4.2%, and DaimlerChrysler (DCX:) eased 3.7%.

Among other companies with quarterly results, 3M (MMM:) raised its full-year forecast, and Royal Dutch Shell (RDS.A:) said second-quarter profits climbed 18%. 3M was higher by 81 cents, or 0.9%, to $90.43. Royal Dutch gave back $1.48, or 1.8%, to $79.62.

Dow Chemical (DOW:) got by analyst earnings estimates, as did Aetna (AET:) and AstraZeneca (AZN:) .

Dow was giving back $2.14, or 4.7%, to $43.53, and AstraZeneca was off by $1.99, or 3.6%, to $53.01. Aetna was higher by 11 cents, or 0.2%, to $50.76.

Sony (SNE:) said its first-quarter sales and revenue climbed more than 13% from last year with operating income that more than tripled. Meanwhile, Exxon Mobil's (XOM:) second-quarter net income fell slightly and missed estimates.

The stock was losing $1.25, or 2.4%, to $51.06. ExxonMobil was falling $4.14, or 4.5%, to $88.65.

Crude prices reversed ground after early gains. The front-month September contract was down $1.11 at $74.77 a barrel. Gasoline prices were off 1 cent at $2.08 a gallon.

[setravis]

Bears Keep Firm Grip.......


7/27/2007


Stocks in the U.S. struggled for most of the session Friday, and a late acceleration in the rate of selling meant another round of steep losses for the market.

The Dow Jones Industrial Average dropped 208.10 points, or 1.54%, to 13,265.47, bringing the two-day decline to 519 points. The S&P 500 fell 23.71 points, or 1.60%, to 1458.95. The Nasdaq Composite tumbled 37.10 points, or 1.43%, to 2562.24.

"This was an ugly finish, and Monday morning might not be better," said Paul Nolte, director of investments with Hinsdale Associates. "The fact that we sold heavily at the end and finished on our lows shows that no one wanted to carry anything over the weekend. Instead of ''Merger Monday,'' there are fears that finance issues will bring ''Break-up Monday.''

Buyers weren't enticed by the latest report on U.S. gross domestic product, which showed that the economy grew at a 3.4% pace in the second quarter. That narrowly topped expectations for 3.2% growth. First-quarter GDP, however, was revised to 0.6% from 0.7%.

Ian Shepherdson, chief economist with High Frequency Economics, argued that "trade will continue to improve, thanks to the weak dollar and soft domestic demand, but not at this pace. The relative strength of the labor market is now even more of a mystery. Despite consumption slowing to just 1.3% from 3.7%, growth was boosted by foreign trade, which added 1.2 percentage points to growth."

Meanwhile, a near-record close for crude further exacerbated buyers'' fears. The front-month September crude contract surged $2.07 to close at $77.02 a barrel, just a penny shy of its all-time closing high.

Disappointing economic readings and continuing worries about the credit market took New York stocks down during the previous session, with the Dow tumbling 311.50 points, or 2.26%, to 13,473.57. The S&P 500 dropped 35.43 points, or 2.33%, to 1482.66, and the Nasdaq surrendered 48.83 points, or 1.84%, to 2599.34.

Earlier in the day Thursday, the losses had been even worse. At one point, the Dow had a decline of more than 400 points, the S&P had fallen 50, and the Nasdaq plunged over 80.

The two-day decline resulted in the worst week for the major averages since early March. Over the five sessions, the Dow tumbled 4.2%, the S&P 500 slid 4.9%, and the Nasdaq gave back 4.7%.

On the New York Stock Exchange 4.89 billion shares changed hands, as decliners topped advancers by a 2-to-1 margin. Volume on the Nasdaq reached 2.75 billion shares, with losers outpacing winners 7 to 3.

Markets overseas also lost value. Overnight, Tokyo's Nikkei fell 2.4%, and Hong Kong's Hang Seng declined 2.8%. London's FTSE dropped 0.6%, and Frankfurt's DAX was off 0.8%.

Elsewhere on the economic docket, the University of Michigan said its consumer sentiment index for July was revised to a reading of 90.4, up from June's revised 85.3. The latest reading, however, was below forecasts of 91.5.

Treasury prices rose for a second-straight session, as investors moved into so-called safe havens. The 10-year note was up 1/32 in price, yielding 4.78%, and the 30-year bond was higher by 3/32, yielding 4.94%.

Following the close of the previous session, biotech giant Amgen (AMGN:) said its second-quarter adjusted earnings expectations surpassed Wall Street's estimates. The new day brought more quarterly reports, among them Medco (MHS:) , which topped estimates and lifted its full-year projections.

Oil giant Chevron (CVX:) posted second-quarter results that topped the Thomson First Call forecast, but the stock shed $2.26, or 2.6%, to end the day at $85.20.

Away from earnings, Medtronic (MDT:) said it will buy medical-device maker Kyphon (KYPH:) in a $3.27 billion deal. Medtronic was off by 11 cents, or 0.2%, at $50.81. Kyphon surged 24.2% to $66.65.

Also, antitrust regulators in Europe are reportedly accusing Intel (INTC:) of unfair competition against its main microprocessor rival Advanced Micro Devices (AMD:) and could take action against the company.

[setravis]

Bargain-Hunters Boost Stocks.......


7/30/2007


Stocks in the U.S. closed firmly higher Monday as traders overcame their early tentativeness and looked for bargains in the wake of last week's selloff.

The major averages alternated between positive and negative territory before going to the upside for good around midday. The Dow Jones Industrial Average rose 92.84 points, or 0.7%, to 13,358.31, and the S&P 500 added 14.96 points, or 1.03%, at 1473.91.

The Nasdaq Composite climbed 21.04 points, or 0.82%, to 2583.28, helped by gains of 2% or more in Applied Materials (AMAT:) , Sirius (SIRI:) , SanDisk (SNDK:) and Qualcomm (QCOM:) .

For the bulls, who watched Thursday and Friday as mounting worries about the credit market crushed stock indices, the ascent was a welcome development. The Dow lost 208.10 points, or 1.54%, to 13,265.47 on the final day of trading last week -- a pullback that followed a decline of more than 300 points the day before.

Also last time out, the S&P 500 dropped 23.71 points to 1458.95, and the Nasdaq sank 37.10 points to 2562.24.

Paul Mendelsohn, chief investment strategist with Windham Financial, said that traders had to look to the charts for buy signals in the absence of any major news headlines.

"We're seeing a technical bounce just above the 200-day moving average, which is very normal," said Mendelsohn. "We're correcting some of Friday's excess decline, and I think that's all it is. Also, there's going to be a lot of volatility we'll see leading up to [this week''s] jobs report. Now, the critical thing is that we see more buying instead of dropping down further."

Larry Wachtel, senior market analyst with Wachovia Securities, argued that it wouldn't be easy to rally back following last week's plunge.

"The problems that dragged us down are still there, so we could definitely be in for another clobbering," said Wachtel. "We've been beaten down and we could use a bounce, but we had a declarative slide."

Wachtel was concerned about one subsector in particular. "The major financial stocks are the worst performers, and that has to stop," he said. "We can't have a market rallying when the major financials are getting killed."

The financial sector did in fact rebound, aiding the rally. After both fell by more than 5% over the previous five sessions, the KBW Bank Index was higher by 1.6% and the Nasdaq Financial Index rose 1.3%.

Many other groups also recovered and closed up. Among the winners, the Philadelphia Gold & Silver Index added 3.3%, the Amex Oil Index was higher by 1.7%, and the Philadelphia Semiconductor Sector Index also rose 1.7%.

About 4.07 billion shares changed hands on the New York Stock Exchange, as advancers topped decliners by a 5-to-3 margin. Volume on the Nasdaq reached 2.36 billion shares, with winners outpacing losers 9 to 7.

The new week brought another round of earnings reports, including results from Dow component Verizon (VZ:) , whose second-quarter sales and profits were in line with estimates. The company also said it will acquire Rural Cellular (RCCC:Nasdaq) . Verizon shed 49 cents, or 1.2%, to $41.51.

Humana (HUM:) reaffirmed its full-year forecast and offered a third-quarter projection that should top analysts'' current estimates. The stock closed up 27 cents, or 0.4%, at $65.08.

Elsewhere, RadioShack (RSH:) said its second-quarter sales slid 15%, but the company still had positive earnings, reversing the loss in the year-earlier period. Shares of RadioShack tumbled $3.25, or 11.3%, to $25.55.

On the merger front, Ingersoll-Rand (IR:) said it plans to sell its Bobcat, utility equipment and attachments businesses for $4.9 billion. Ingersoll-Rand jumped $3.63, or 7.5%, to $51.77.

Meanwhile, a report in The Wall Street Journal said that News Corp. (NWS:) would be "highly unlikely" to proceed with its $5 billion bid for Dow Jones (DJ:) at the current shareholder vote tally. Dow Jones'' controlling shareholders face a 5 p.m. EDT deadline to turn in votes for the deal.

Shares of Dow Jones slid 5.3% to end the day at $51.56, while News Corp. gained 0.8% to $22.84.

Amazon.com (AMZN:) lost ground after the stock received a negative mention in Barron's this past weekend, owing to the giant run-up in price in recent months. Amazon fell by $1.34, or 1.6%, to close at $82.70.

Among the research calls, AG Edwards upgraded Exxon Mobil (XOM:) to buy from hold, and JMP Securities raised Motorola (MOT:) to market perform from market underperform. Exxon climbed 0.5% at $86.01, and Motorola tacked on 0.1% at $16.97.

In the absence of any economic data, Treasury prices lost ground. The 10-year note was down 10/32 in price, yielding 4.80%, and the 30-year bond lost 18/32, yielding 4.97%.

After finishing a penny shy of its record close during the last session, the September crude contract gave back 19 cents to $76.83 a barrel. Gasoline prices were off by a penny at $2.08 a gallon.

The earnings parade will continue before Tuesday's open, when such names as Coach (COH:) , General Motors (GM:) , Marathon Oil (MRO:) and Valero (VLO:) are due to report.

Whole Foods Market (WFMI:) and Lincoln National (LNC:) will be out with earnings results later in the day.

[setravis]

Credit Scare Sinks Futures.......


8/1/2007 7:57


The U.S. market was facing more losses at the open Wednesday as worries about subprime mortgages and bad debt in general continued to drive traders and investors to unload equities.

Futures on the S&P 500 were down 5 points at 1456.90 and were 3.43 points under fair value. Nasdaq 100 futures were losing 5.75 points to 1940 and were 4.81 points below fair value.

On Tuesday, the session started promising enough, and for a brief time the Dow Jones Industrial Average was ahead by more than 130 points. However, the gains wouldn't hold, and by the afternoon lingering fears about the credit market had left the bears firmly in control.

At the end of it all, the Dow gave back 146.32 points, or 1.10%, to 13,211.99. The S&P 500 sank 18.64 points, or 1.26%, to 1455.27, and the Nasdaq Composite plunged 37.01 points, or 1.43%, to 2546.27.

Markets overseas were having an even worse time. Tokyo's Nikkei dropped more than 2%, and Hong Kong and Shanghai stock trackers declined over 3%. Korea and Taiwan plummeted 4%.

Losses for many of Europe's major markets were between 1.5% and 2.5%.

Elsewhere, crude oil pulled back slightly from a historic high and was lately down 64 cents at $77.57 a barrel. Treasuries were little changed. The 10-year note was up 2/32 in price, yielding 4.73%, and the 30-year bond was losing 2/32, yielding 4.91%.

On the corporate side, Time Warner (TWX:) topped analysts'' second-quarter profit estimates and said it would buy back up to $5 billion of its own stock. Revenue for the quarter rose 6% from the same period last year to $11 billion.

Also in the media space, Dow Jones (DJ:) has finally reached an agreement that will see it be acquired by Australia's News Corp. (NWS:) after enough members of the Bancroft family said that they would sign off on the deal.

[setravis]

Chaos Ends With Bulls Ahead.......


8/1/2007


Stocks in New York endured a wild back-and-forth trading session Wednesday, but at the end of it all the bulls were able to claim the victory.

After falling as many as 80 points in the morning, the Dow Jones Industrial Average rallied late in the afternoon, scaling nearly 200 points in the last hour. The index closed higher by 150.38 points, or 1.14%, to 13,362.37, completely reversing the previous session's losses.

The S&P 500 added 10.54 points, or 0.72%, to 1465.81, and the Nasdaq Composite rose 7.60 points, or 0.3%, to 2553.87.

"On a relative basis this really wasn't more than a dead-cat bounce, as a 150-point recovery isn't much compared to our recent slide," cautioned Larry Wachtel, senior market analyst with Wachovia Securities. "This type of action should be expected, especially after the Dow fell nearly 800 points from its record high. When valuations are taken down by that extreme, this snap-back was due."

Michael Sheldon, chief market strategist with Spencer Clarke LLC, said the most likely reason stocks had such a strong finish was due to computer program-related trading.

"Based on the fact that 75% of the S&P 100 closed higher today vs. just 55% of the Russell 2000 and only 32% of a Bloomberg index of recent IPO's, the late-day rally on Wall Street most likely reflects strong late-day buy programs along with short-covering by investors betting on a continued slide in stock prices," he said.

Breadth was decidedly negative. About 4.93 billion shares changed hands on the New York Stock Exchange, where decliners beat out advancers by a 2-to-1 margin. Volume on the Nasdaq reached 2.89 billion shares, with losers outpacing winners 3 to 2.

Continuing worries about the potential for lending-related blowups kept traders on guard early, and for a time appeared set to sink the market.

Beazer Homes (BZH:) plunged as much as 40% and dragged down the rest of the homebuilding sector amid rumors the company was facing a liquidity problem. Beazer quickly moved to deny the speculation, but investors unloaded positions at the mere hint of trouble.

Beazer finished down nearly 18%, and others in the group, such as Hovnanian (HOV:) and Meritage Homes (MTH:) , were lower as well, but finished off their worst levels.

The erratic action wasn't unlike the previous session. On Tuesday, the day started promisingly enough, and for a brief time the Dow was ahead by more than 130 points.

By the afternoon though, lingering nervousness about the credit market had left the bears firmly in control. Last time out, the Dow gave back 146.32 points, or 1.10%, to 13,211.99, and the Nasdaq plunged 37.01 points, or 1.43%, to 2546.27.

More woes at Bear Stearns (BSC:) compounded the uncertainty. The investment bank lost 2.4% on reports that it's facing losses in a third mortgage-related fund.

Several other financials were similarly weak. Countrywide Financial (CFC:) , which has dropped nearly 20% over the past two weeks, was lower by another 3.4%. Lehman Brothers (LEH:) shed 1.9%, and Merrill Lynch (MER:) slid 1.1%.

For the time being, the market doesn't know whether to focus on debt problems or on strong profit reports and government and industry data, according to Art Hogan, chief market analyst with Jefferies.

"There's a real dichotomy that's creating this tug-of-war, shifting the market between positive and negative ground," he said. "On one end of the spectrum, we have a fear of the credit markets and how deep the subprime problem is. On the other end, the market rallies when it focuses on earnings and economic data. It depends on whether investors are fearful or greedy."

Energy prices were also in focus, as the Energy Department posted its weekly inventory report. The data showed an unexpected draw of 6.5 million barrels from crude inventories last week. Distillate stocks rose 2.8 million barrels, and gasoline inventories increased by 600,000 barrels last week.

The front-month September crude contract set a record intraday high of $78.77 a barrel before pulling back. Oil dropped $1.68 to end at $76.53 a barrel.

Treasury prices eased following the release of the Institute for Supply Management's manufacturing index. The index rose to a reading of 53.8 last month from 56.0 in June, slightly below expectations. Anything above 50 is considered growth. On Friday, the ISM will post its services index for July.

The 10-year note was down 3/32 in price, yielding 4.75%, and the 30-year bond lost 4/32, yielding 4.90%.

Ian Shepherdson, chief economist with High Frequency Economics, said that the decline in the ISM data signals the end of the surge in auto production.

"As the auto boost fades from the survey we expect the headline index to slip back to 50 or so," Shepherdson said. "After that, much will depend on whether the current gyrations in the market morph into a sustained credit crunch. For now, this report should at least sow some doubt among growth bulls."

More clues about the health of the automotive sector came from July auto sales data. General Motors (GM:) said auto sales fell nearly 19% last month, yet the Dow component climbed 1% to close at $32.73.

Ford (F:) reported a 19.1% drop in last month's sales, and DaimlerChrysler (DCX:) posted a 9.1% decline in sales.

Elsewhere on the economic docket, the National Association of Realtors said that pending home sales rose an unexpected 5%, the biggest increase in three years.

Metals prices finished with losses. Gold was off $3.40 to end at $675.90 an ounce, and silver was lower by 6 cents at $12.95 an ounce.

Among earnings, Time Warner (TWX:) topped analysts'' second-quarter profit estimates and said it would buy back up to $5 billion of its own stock. Revenue for the quarter rose 6% from the same period last year to $11 billion. The stock ended down 62 cents, or 3.2%, at $18.64.

Clothing maker Jones Apparel (JNY:) swung to a second-quarter loss and missed expectations. It also cut its full-year forecast, citing a weaker retail environment. Shares tumbled $3.10, or 12.4%, to $21.86.

On the other hand, Kraft Foods (KFT:) posted a second-quarter profit that beat the consensus, and OfficeMax (OMX:) also surpassed estimates. Kraft was lower by 35 cents, or 1.1%, at $32.40. OfficeMax jumped $2.23, or 6.8%, to $35.11.

Dow Jones (DJ:) has finally reached an agreement that will see it be acquired by Rupert Murdoch's News Corp. (NWS:) after enough members of the Bancroft family said that they would sign off on the deal. Shares of Dow Jones finished with a gain of 72 cents, or 1.3%, at $58.10.

On the research front, Citigroup upgraded Apple (APPL:) to buy from hold, assigning a stock price target $160. Shares added $3.24, or 2.5%, to $135.

Credit Suisse upgraded PetSmart (PETM:) to outperform from neutral, while William Blair downgraded Amgen (AMGN:) to market perform from outperform. PetSmart added 0.5%, but Amgen gave back 3.1%.

Markets overseas had a tough time. Tokyo's Nikkei dropped more than 2%, and Hong Kong and Shanghai stock trackers declined over 3%. Korea and Taiwan plummeted 4%. Losses for many of Europe's major markets were between 1.4% and 2%.

[setravis]

Stock Futures Head Higher.......


8/2/2007


Stocks in the U.S. were heading for a slightly higher open Thursday, but investors who've been paying any attention over the last few days know that doesn't necessarily have much to do with where they'll finish.

Futures on the S&P 500 were up 2 points to 1471.90 and were 1.17 points above fair value. Nasdaq 100 futures were gaining 2.50 points at 1963 and were 5.47 points ahead of fair value.

Recent sessions have seen the major indices in New York swing back and forth between positive and negative as investors tried to get a handle on their worries about the credit market, and Wednesday was no exception.

The Dow Jones Industrial Average fell as many as 80 points early in the prior day, but it closed up 150.38 points, or 1.14%, to 13,362.37 and reversed the losses from Tuesday.

At the same time, the S&P 500 was better by 10.54 points, or 0.72%, to 1465.81, and the Nasdaq Composite gained 7.60 points, or 0.3%, to 2553.87. Both of those measures had also been in the red earlier in the day.

Among the new Day's stocks making headlines, Nokia (NOK:) said its second-quarter revenue jumped 28% and earnings beat expectations. The stock jumped 7% in European trading.

Nortel (NT:) lost 7 cents a share in its most recent quarter, but that was a penny less than analysts anticipated. Revenue declined slightly year over year to $2.56 billion.

Viacom (VIA:) , Starwood Hotels (HOT:) , CVS (CVS:) and NYSE Euronext (NYX:) also had profit numbers that were better than expected.

Overseas, stocks were generally posting gains. Tokyo's Nikkei was up 0.7%, but Hong Kong's Hang Seng slipped 0.1%. London's FTSE rose 0.6%, and Frankfurt's DAX climbed 0.8%.

[setravis]

Another Late Run Lifts Stocks.......


8/2/2007


Stocks in the U.S. once again shook off early jitters and made a late surge in the last hour of trading to close solidly higher, mimicking the prior session.

The Dow Jones Industrial Average fell near the flat line in afternoon trading, but when the closing bell rang it was ahead by 100.96 points, or 0.76%, to 13,463.33. Twenty-five of the Dow's 30 components finished in the black, led by a 3.3% increase in shares of Honeywell (HON:) .

The S&P 500 rose 6.39 points, or 0.44%, to 1472.20 after spending much of the day wavering. The Nasdaq Composite added 22.11 points, or 0.87%, to 2575.98.

Recent sessions have seen stocks swing back and forth between positive and negative, and in short time spans, as investors tried to get a handle on their worries about the credit market.

"The bears couldn't keep the market down today," said Paul Mendelsohn, chief investment strategist with Windham Financial. "That's telling me there's institutional buying around the end of the day, and that type of rally tells you that shorts are being squeezed. We've bounced off the 200-day moving average, but now we're hitting a little resistance."

About 3.99 billion shares changed hands on the New York Stock Exchange, as advancers topped decliners by a 2-to-1 margin. Volume on the Nasdaq reached 2.39 billion shares, with winners edging losers 8 to 7.

"We had a rally, but the volume and breadth wasn't as robust as it usually is on down days," said Paul Nolte, director of investments with Hinsdale Associates. "There's a little buying ahead of what many think will be a decent jobs report. This may mean that people believe that the subprime borrowing issue is more contained than they previously thought."

Before the open, traders began digesting the latest round of economic data. The Labor Department said initial jobless claims rose by 4,000 last week to 307,000 claims. The less-volatile four-week moving average added 1,750 to 313,000 claims.

Also on the economic docket, the Census Bureau said factory orders for June increased 0.6%, compared to an expected 1% rise.

However, the latest U.S. nonfarm payrolls report was looming over Wall Street. The report, due at 8:30 a.m. EDT on Friday, is expected to reveal that the U.S. economy created roughly 135,000 jobs last month. The unemployment rate is expected to remain at 4.5%, and average hourly earnings should rise 0.3%.

Treasury prices gained ground. The 10-year note was up 9/32 in price, yielding 4.76%, and the 30-year bond added 13/32, yielding 4.90%.

Crude also moved higher, but remained below record levels. After setting a new intraday high of $78.77 a barrel before reversing sharply in the prior session, the September benchmark crude contract climbed 33 cents at $76.86 a barrel.

Earnings were in focus thanks to several solid reports. Following the previous close, Starbucks (SBUX:) reported in-line results but finished 1% lower to $26.92.

Disney (DIS:) and Electronic Arts (ERTS:) also posted results after the last close. Disney topped analysts'' estimates and announced the acquisition of Club Penguin, a virtual community for kids. Disney tacked on 53 cents, or 1.6%, to $34.36.

Meanwhile, Electronic Arts posted a loss that still beat expectations, but the video-game maker offered weak fiscal second-quarter guidance. Still, shares rose $3.46, or 7.2%, to $51.56.

Among the new Day's stocks making headlines, Nokia (NOK:) said its second-quarter revenue jumped 28% and earnings beat expectations. The stock jumped $2.49, or 8.8%, to $30.90.

Nortel (NT:) lost 7 cents a share in its most recent quarter, but that was a penny less than analysts anticipated. Revenue declined slightly year over year to $2.56 billion. Nortel tumbled $1.25, or 5.8%, to $20.49.

Viacom (VIA.B:) , Starwood Hotels (HOT:) , CVS (CVS:) and NYSE Euronext (NYX:) also had profit numbers that were better than expected.

As fears that M&A activity would dry up permeated throughout the market, Fiserv (FISV:) announced an all-cash bid to acquire Checkfree (CKFR:) for $4.4 billion, or $48 a share. Checkfree surged $8.57, or 23.3%, to close at $45.40.

Elsewhere, Dell (DELL:) said it will purchase the ASAP Software unit of Corporate Express (CXP:) for $340 million. Shares of Corporate Express gained 10 cents, or 0.7%, to $13.69.