Portfolio Crafter
10-27-2006, 11:43 PM
End of Day Market Summary Friday, 10/27/2006
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Stocks ended lower after a weaker-than-expected economic growth report caused investors to break from a recent rally, with the technology sector hard hit by a Goldman Sachs note saying demand for mother boards "is falling off a cliff." However, the prospect that continued weak economic data will prompt the Federal Reserve to lower interest rates kept losses in check.
Today, the Dow Jones industrial average closed down 73.40 or 0.6% to 12,090.26, the broader S&P 500 index closed down 11.74 or nearly 0.9% to 1,377.34, and the tech-fueled Nasdaq closed down 28.48 or 1.2% to 2,350.62. For the week, the Dow rose 0.8%, the S&P 500 gained 0.7% and the Nasdaq ran up 0.4%.
Market breadth was negative. On the New York Stock Exchange, losers beat winners nearly 21 to 11 on volume of 1.551 billion shares. On the Nasdaq, decliners topped advancers 20 to 9 on volume of 2.265 billion shares.
Despite more positive news from the earnings front, the markets were pressured by news that the GDP grew at a 1.6% seasonally adjusted annual rate in the third quarter, down from 2.6% in the second quarter. Economists had been expecting growth of 2.1%. Core consumer prices increased 2.3% during the latest quarter, down from 2.7% in the second quarter, but the year-over-year increase grew to 2.4% from 2.2%. The annual inflation rate thus stands above the Federal Reserve's 1.5%-to-2% comfort zone.
The GDP report confirmed we are in the midst of a mid-cycle slowdown, while the inflation component was very positive and that's offsetting it. Overall, it continues to point toward the Fed not raising rates again and ultimately lowering them. However, in the short term, the market could be vulnerable to a pullback.
Shares of Chevron closed up $0.18 to $67.68, as it posted better-than-expected third-quarter earnings on improved refined-product margins and high oil prices. Its net income rose to $5.02 billion from $3.59 billion last year. However, total revenue dipped to $54.21 billion from $54.46 billion last year.
Shares of Microsoft closed down $0.01 to $28.34, despite reporting higher quarterly earnings and revenue that topped analysts' estimates. While most Wall Street analysts were upbeat on the results, Morgan Stanley analyst Mary Meeker expressed some concern over narrowing operating margins. Its profit and revenue both rose 11%, on continued strong demand for its server software and a sharp jump in sales at the Xbox video-gaming unit. Its fiscal first-quarter profit increased to $3.48 billion, from $3.14 billion a year ago. Revenue for the period, increased to $10.81 billion from $9.74 billion, exceeding the $10.75 billion expected by analysts.
Stock of Sun Microsystems closed up $0.14 to $5.50, after reporting a smaller quarterly loss that was narrower than what analysts were expecting. Its loss narrowed by 55% last quarter as revenue continued to improve amid its attempts at restructuring and regaining its position among the elite of the business-computing industry. It lost $56 million, compared to a loss of $123 million last year, and its revenue grew to $3.19 billion from $2.73 billion. The CEO's attempt to restructure the company have put it back in favor with investors to a degree.
Shares of Ingersoll-Rand slumped 3.7% to $37.45, after declaring third-quarter profit that fell due to disappointing results at its North American markets for compact equipment, and as demand for road machinery fell. Its net income fell 4% to $243.8 million, from $254.2 million in the year-earlier period. Analysts had forecast sales of $2.85 billion. The revenue of the company rose 6% to $2.77 billion from $2.62 billion.
U.S. light crude oil for December delivery jumped 39 cents to settle at $60.75 a barrel on the New York Mercantile Exchange. The December crude contract took a weekly gain of 2.4%.
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by Portfolio Crafter (http://www.portfoliocrafter.com?a_aid=fiasco)
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Stocks ended lower after a weaker-than-expected economic growth report caused investors to break from a recent rally, with the technology sector hard hit by a Goldman Sachs note saying demand for mother boards "is falling off a cliff." However, the prospect that continued weak economic data will prompt the Federal Reserve to lower interest rates kept losses in check.
Today, the Dow Jones industrial average closed down 73.40 or 0.6% to 12,090.26, the broader S&P 500 index closed down 11.74 or nearly 0.9% to 1,377.34, and the tech-fueled Nasdaq closed down 28.48 or 1.2% to 2,350.62. For the week, the Dow rose 0.8%, the S&P 500 gained 0.7% and the Nasdaq ran up 0.4%.
Market breadth was negative. On the New York Stock Exchange, losers beat winners nearly 21 to 11 on volume of 1.551 billion shares. On the Nasdaq, decliners topped advancers 20 to 9 on volume of 2.265 billion shares.
Despite more positive news from the earnings front, the markets were pressured by news that the GDP grew at a 1.6% seasonally adjusted annual rate in the third quarter, down from 2.6% in the second quarter. Economists had been expecting growth of 2.1%. Core consumer prices increased 2.3% during the latest quarter, down from 2.7% in the second quarter, but the year-over-year increase grew to 2.4% from 2.2%. The annual inflation rate thus stands above the Federal Reserve's 1.5%-to-2% comfort zone.
The GDP report confirmed we are in the midst of a mid-cycle slowdown, while the inflation component was very positive and that's offsetting it. Overall, it continues to point toward the Fed not raising rates again and ultimately lowering them. However, in the short term, the market could be vulnerable to a pullback.
Shares of Chevron closed up $0.18 to $67.68, as it posted better-than-expected third-quarter earnings on improved refined-product margins and high oil prices. Its net income rose to $5.02 billion from $3.59 billion last year. However, total revenue dipped to $54.21 billion from $54.46 billion last year.
Shares of Microsoft closed down $0.01 to $28.34, despite reporting higher quarterly earnings and revenue that topped analysts' estimates. While most Wall Street analysts were upbeat on the results, Morgan Stanley analyst Mary Meeker expressed some concern over narrowing operating margins. Its profit and revenue both rose 11%, on continued strong demand for its server software and a sharp jump in sales at the Xbox video-gaming unit. Its fiscal first-quarter profit increased to $3.48 billion, from $3.14 billion a year ago. Revenue for the period, increased to $10.81 billion from $9.74 billion, exceeding the $10.75 billion expected by analysts.
Stock of Sun Microsystems closed up $0.14 to $5.50, after reporting a smaller quarterly loss that was narrower than what analysts were expecting. Its loss narrowed by 55% last quarter as revenue continued to improve amid its attempts at restructuring and regaining its position among the elite of the business-computing industry. It lost $56 million, compared to a loss of $123 million last year, and its revenue grew to $3.19 billion from $2.73 billion. The CEO's attempt to restructure the company have put it back in favor with investors to a degree.
Shares of Ingersoll-Rand slumped 3.7% to $37.45, after declaring third-quarter profit that fell due to disappointing results at its North American markets for compact equipment, and as demand for road machinery fell. Its net income fell 4% to $243.8 million, from $254.2 million in the year-earlier period. Analysts had forecast sales of $2.85 billion. The revenue of the company rose 6% to $2.77 billion from $2.62 billion.
U.S. light crude oil for December delivery jumped 39 cents to settle at $60.75 a barrel on the New York Mercantile Exchange. The December crude contract took a weekly gain of 2.4%.
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