Stock Market Report 14-1-10

US stocks rose on Wednesday as investors bought financial and technology shares ahead of earnings results from Intel Corp and JPMorgan later this week.

Market breadth was positive. Winners beat losers over two to one on both the NASDAQ and the NYSE.

The healthcare sector was buoyed by a brokerage upgrade of drug maker Merck & Co. Shares in Merck & Co rose 4.4%.

The consumer sector was aided by an upbeat outlook from Kraft Foods, gaining 0.4%. Chocolate maker Hershey is still considering a potential bid for Cadbury, but has not decided whether it will proceed with a formal offer.

JPMorgan, up 1.8%, led gains in the KBW bank index. JPMorgan reports its results later this week. In other news in the sector, the White House is debating taxing companies that took bailout funds to make sure they pay the money back. President Obama is expected to announce the plan on Thursday.

Tech shares gained, with Advance Micro Devices up 5.3% and Intel adding 1.5%. The semiconductor index gained 1.2%.

Google fell 0.9% after the company said it may shut down its China operations over censorship and hacking. Google said on Tuesday it may shut down its Google.cn site after discovering an attempt to gain access to Gmail accounts of Chinese human rights activists. The company said it is one of at least 20 companies that have been attacked. Shares of rival Chinese search engine Baidu jumped 13% and had the biggest percentage gain on the NASDAQ 100. According to figures from tracking firms comScore and Analysis International, Baudi currently controls 64% of the search market in China while Google has 31% of the market.

Energy stocks were under pressure as crude prices slipped. Chevron was the biggest drag on the Dow, falling 0.9%.

The Federal Reserve said in its Beige Book report of economic conditions that while economic activity was at a low level, conditions have improved modestly, and those improvements were broader geographically compared with the last report.

The December Treasury budged showed a deficit of US$91.9B versus $120.3B in November, roughly in line with forecasts for a deficit of US$92B.

Overseas markets

Dow up 74 pts to 10,702 (10,614 – 10,709)

S&P 500 up 11 pts to 1,148 (1,133 – 1,148)

Nasdaq up 30 pts to 2,312 (2,274 – 2,313)

SPI 200 Futures up 27 pts to 4,879 (4,826 – 4,879)

FTSE down 25 pts to 5,473 (5,451 – 5,510)

Nikkei down 144 pts to 10,735 (10,730 – 10,867)

Shanghai SE Comp down 101 pts to 3,173 (3,165 – 3,233)

Commodities

WTI Oil down 0.9% to US$80.08/bbl

Gold up 0.7% to US$1,138/oz

Sugar (NY) up 2.5% to USc28.04/lb

Corn down 8.7% to US$3.48/bushel

Wheat down 6.7% to US$5.02/bushel

Natural Gas (Henry Hub) up 0.7% to US$5.61/MMbtu

Silver up 2.1% to US$18.63/oz

Platinum up 0.4% to US$1,577/oz

Palladium up 0.0% to US$424.00/oz

Copper (NY) up 1.5% to US$3.39/lb

Currency

A$ / US$ down 0.6USc to US$0.92 /A$

EUR / US$ down 0.1USc to US$1.45 /EUR

GBP / US$ up 1.7USc to US$1.63 /GBP

US$ / Yen down 0.6 Yen to 91.48 Yen/US$

Stock Market Report 13-1-10

US stocks slid in a broad sell-off on Tuesday. Financials declined on concerns over a potential government levy on banks, and Alcoa delivered disappointing results that further dampened sentiment.

Banks led the financials sector lower. The KBW bank index was down nearly 2%. Shares of the Bank of America, Citigroup and JPMorgan were off by between 3% and 4%. A senior US official confirmed that the government is considering a levy on financial services firms to recoup bailout losses as part of the fiscal 2011 budget. The banking sector faced another potential hit after the Federal Deposit Insurance Corp floated a proposal that banks whose compensation plans encourage risk-taking would have to pay more for deposit insurance.

Shares of Alcoa fell 11% after the company reported weaker-than-expected results. The company reported a profit of 1cps versus a loss of 28cps a year ago. However, analysts expected earnings of 6cps.

Chevron Corp said its fourth-quarter profit would be sharply lower than that in the previous quarter, sending its shares down nearly 1%. Margins have been under pressure, with the rising price of oil not in sync with the weaker demand globally. A variety of oil stocks fell, with the Amex Oil index losing 2.3%.

Shares of big manufacturers retreated, with Caterpillar sliding nearly 3%.

KB Home reported a quarterly profit for the first time in two years, thanks to a tax benefit. However, the homebuilder’s revenue dropped from that a year ago.

Technology shares also fell, including Apple, which was off 1.6%. Electronics Arts cut its fiscal 2010 forecast, citing weak holiday sales in Europe. The video game publisher lost 8.3%.

Intel and JPMorgan report results this week.

The November trade deficit, released in the morning, widened to US$36.4B, from a revised $33.2B in October. The deficit was expected to widen to US$34.5B.

Overseas markets

Dow down 66 pts to 10,598 (10,569 – 10,663)

S&P 500 down 14 pts to 1,133 (1,132 – 1,144)

Nasdaq down 35 pts to 2,278 (2,273 – 2,299)

Russell 2000 down 10 pts to 634 (634 – 644)

SPI 200 Futures down 52 pts to 4,839 (4,828 – 4,906)

FTSE down 39 pts to 5,499 (5,460 – 5,550)

Nikkei up 81 pts to 10,879 (10,764 – 10,905)

Shanghai SE Comp up 61 pts to 3,274 (3,180 – 3,275)

Commodities

WTI Oil down 2.4% to US$80.55/bbl

Gold down 2.0% to US$1,129/oz

Sugar (NY) up 2.3% to USc27.36/lb

Corn down 0.3% to US$3.81/bushel

Wheat down 6.7% to US$5.02/bushel

Natural Gas (Henry Hub) down 3.5% to US$5.57/MMbtu

Silver down 1.7% to US$18.24/oz

Platinum down 1.4% to US$1,569/oz

Palladium down 2.1% to US$425.25/oz

Copper (NY) down 2.7% to US$3.34/lb

Currency

A$ / US$ down 0.5USc to US$0.92 /A$

EUR / US$ up 0.8USc to US$1.45 /EUR

GBP / US$ up 1.4USc to US$1.62 /GBP

US$ / Yen down 1.7 Yen to 90.97 Yen/US$

Stock Market Report 12-1-10

US technology shares fell on Monday as investors took profits after the NASDAQ touched a 16-month high on Friday. Shares of industrials buoyed the broad market following the release of strong Chinese economic data.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers eight to seven. On the NASDAQ, decliners topped advancers seven to six.

China’s strong trade data lifted US companies with large international operations. Constructions machinery maker and Dow component Caterpillar jumped 6%, its largest daily advance in nearly three months. Aluminium producer Alcoa rose 1.2% ahead of its fourth-quarter earnings announcement expected after market close. Analysts, on average, expect Alcoa to show a profit of 6cps compared to a loss in the previous quarter.

Dow components Intel and JPMorgan report results later this week. S&P 500 earnings are expected to have more than tripled in the fourth quarter of 2009, thanks to easy comparisons to the fourth quarter of 2008. A substantial improvement in financial sector results is expected to fuel gains.

McMoRan and Energy XXI shares jumped after the energy companies announced a key discovery at one of their oil exploration wells in the Gulf of Mexico.

Technology shares, however, weighed on the market. Shares in Apple, Dell and Hewlett-Packard all declined.

UPS and Fedex advanced 4.8% and 2.9%, respectively, on speculation that cold weather affecting parts of the US will drive consumers away from stores and into online shopping, increasing shipment volumes.

Among decliners, Dow component Procter & Gamble shares fell 0.4% on concern that Friday’s currency devaluation in Venezuela could hurt sales and revenue as products will be more expensive.

Overseas Markets

Dow up 48 pts to 10,666 (10,592 – 10,676)

S&P 500 up 2 pts to 1,147 (1,142 – 1,150)

Nasdaq down 5 pts to 2,312 (2,302 – 2,326)

SPI 200 Futures up 6 pts to 4,939 (4,916 – 4,958)

FTSE up 4 pts to 5,538 (5,528 – 5,600)

Nikkei up 117 pts to 10,798 (10,678 – 10,816)

Shanghai SE Comp up 17 pts to 3,213 (3,197 – 3,307)

Commodities

WTI Oil down 0.3% to US$82.52/bbl

Gold up 1.2% to US$1,152/oz

Sugar (NY) down 2.8% to USc26.75/lb

Corn up 1.6% to US$3.82/bushel

Wheat up 1.7% to US$5.38/bushel

Natural Gas (Henry Hub) down 12.0% to US$5.77/MMbtu

Silver up 0.8% to US$18.62/oz

Platinum up 1.1% to US$1,596/oz

Palladium up 1.3% to US$433.75/oz

Copper (NY) up 1.2% to US$3.43/lb

Currency

A$ / US$ up 1.4USc to US$0.93 /A$

EUR / US$ up 2.2USc to US$1.45 /EUR

GBP / US$ up 1.7USc to US$1.61 /GBP

US$ / Yen down 1.3 Yen to 92.07 Yen/US$

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