The Dow and the S&P 500 dropped on Friday as concerns about the outlook of bond insurers weighed on financial shares, but bargain hunting in the technology sector pulled the Nasdaq into positive territory.
Shares of JPMorgan Chase & Co (NYSE:JPM - News) dropped 1.7 percent, and led the Dow's losers, while credit card and travel services company American Express Co (NYSE:AXP - News) slid 2 percent.
The drag from financial shares was driven in part by investor unease about the outlook for bond insurers after Moody's Investors Services cut its "AAA" ratings for bond insurer XL Capital Assurance, a unit of Security Capital Assurance (NYSE:SCA - News).
Comments from a Federal Reserve official saying a recession might not be avoidable were another headwind for stocks.
The Dow Jones industrial average (DJI:^DJI - News) was down 67.06 points, or 0.55 percent, at 12,179.94. The Standard & Poor's 500 Index (^SPX - News) was down 6.00 points, or 0.45 percent, at 1,330.91. The Nasdaq Composite Index (Nasdaq:^IXIC - News) was up 3.59 points, or 0.16 percent, at 2,296.62.
Investors fear that downgrades of bond insurers could further harm the banking sector and stunt the global economy as financial institutions take a hit from subsequent write-downs of their assets.
JPMorgan shares fell to $44.23 on the New York Stock Exchange, while shares of American Express dropped to $45.55.
Shares of MBIA Inc (NYSE:MBI - News), the world's largest bond insurer, slipped by 0.4 percent to $14.12.
The company on Thursday sold $1 billion of shares to raise capital it hopes will help it avoid a rating downgrade. The sale was at a discount to MBIA's closing price.
On the Nasdaq, Apple Inc (NasdaqGS:AAPL - News) provided the biggest lift to the index, with a gain of 1.7 percent to $123.24. Tech stocks recently have taken a beating as investors worried about business spending, making some stocks attractively priced.
as attractive valuations lured investors to seek bargains.
San Francisco Federal Reserve Bank President Janet Yellen, speaking in Honolulu, indicated on Thursday a willingness to cut U.S. interest rates further, but she said she was not confident a recession can be avoided this year.
Friday, February 8, 2008
Dow, S&P 500 drop,Nasdaq up
Monday, January 28, 2008
Latest Updates
11:00 am : Stocks climb to their best levels of the session in a broad-based move. All ten sectors are in positive territory.
Financials (+1.6%) is leading the rebound with all 19 of its industry groups in the green. Industrial REITs is posting a 2.3% gain and regional banks is up 1.8%.
Even the energy sector (+1.0%) has rebounded into the green, despite a 1.4% slide in crude oil prices.DJ30 +53.36 NASDAQ +6.68 SP500 +7.61 NASDAQ Dec/Adv/Vol 1446/1271/508 mln NYSE Dec/Adv/Vol 1476/1445/322 mln
10:30 am : Stocks recover after falling to fresh session lows on the weak new home sales data. Utilities are leading the recovery effort with a gain of 1.3%. Meanwhile, telecom (-0.5%) pares most of its losses.
With regard to the new home sales data, the December seasonally adjusted annual rate of 604,000 is 4.7% less than last month's reading and is 40.7% less than last year's number. The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.
This number of sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders are down 2.7% this session.DJ30 +6.91 NASDAQ -2.28 SP500 +2.60 NASDAQ Dec/Adv/Vol 1632/1008/342 mln NYSE Dec/Adv/Vol 1763/1100/205 mln
10:05 am : Just hitting the wires, the U.S. Dept. of Commerce said December new home sales fell to a seasonally adjusted annual rate of 604K. Economists were expecting sales to hold at 647K. November's reading was revised downward to 634K. Stocks had climbed back to the unchanged mark, but fell back into the red after the disappointing data.
Three of the ten sectors are trending higher. Utilities is leading the way with a 0.6% advance. Telecom is the main laggard with a 1.7% drop, as it continues its poor showing this year.DJ30 -74.87 NASDAQ -13.77 SP500 -6.56 NASDAQ Dec/Adv/Vol 1624/790/120 mln
09:40 am : The stock market dips into the red after opening on a slightly higher note. Foreign markets saw another day of steep declined on fears of U.S. economic slowdown. Japan's Nikkei fell 4.0% and Hong Kong's Hang Seng fell 4.3%. Goldman Sachs said in a report dated Jan. 25 that Japan is either already in a recession or is very likely to do so in the first quarter, according to SCMP.com.
Earnings news leaned bullish. McDonald's (MCD), Corning (GLW), Sysco (SYY) and Halliburton (HAL) topped earnings expectations. Verizon (VZ) came in-line with expectations. McDonald's is trading lower though, as investors were disappointed with its flat December U.S. same-store sales.DJ30 -53.57 NASDAQ -16.76 SP500 -4.97
09:13 am : S&P futures vs fair value: -1.3. Nasdaq futures vs fair value: -2.0.
08:59 am : S&P futures vs fair value: -2.2. Nasdaq futures vs fair value: -3.0. Stock futures shed a few points and suggest a slightly lower open. The Dec. new home sales report is set for release at 10:00 ET. Economists are expected a reading of 645K.
08:30 am : S&P futures vs fair value: +0.3. Nasdaq futures vs fair value: -4.5. S&P 500 futures are now pointing to a flat open as investors respond positively to this morning's earnings
reports. McDonald’s (MCD) announced its dividends declared will now be paid on a quarterly basis. Nasdaq futures are pointing to a slightly lower open.
08:00 am : S&P futures vs fair value: -5.0. Nasdaq futures vs fair value: -10.0. Futures indicate a lower start for stock market after foreign markets fell sharply on concerns of U.S. economic slowdown. Japan closed down 4.0% and Hong Kong ended its session 4.4% lower. Earnings reports have lifted futures off their worst levels. Verizon (VZ) reported earnings in-line with expectations. Corning (GLW) topped earnings expectations by one cent and issued first quarter earnings guidance above the consensus estimate. McDonald’s (MCD) beat expectations by $0.02.
06:18 am : S&P futures vs fair value: -8.1. Nasdaq futures vs fair value: -19.3.
06:18 am : FTSE...5761.40...-107.60...-1.8%. DAX...6709.27...-107.47...-1.6%.
06:18 am : Nikkei...13087.91...-541.25...-4.0%. Hang Seng...24053.61...-1068.76...-4.3
