Portfolio Crafter
11-09-2006, 08:42 AM
End of Day Market Summary Wednesday 11/8/2006
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Stocks ended higher with the Dow Jones Industrial Average setting a new record close, after investors concluded that little market-moving legislation is likely to come out of the new Democratic party controlled House of Representatives and a Senate whose leadership remains uncertain. The broader market also welcomed the resignation of Defense Secretary Donald Rumsfeld.
Today, the Dow Jones industrial average closed up 19.77 or 0.16% to 12,176.54, the broader S&P 500 index closed up 2.88 or 0.21% to 1,385.72, and the tech-fueled Nasdaq composite closed up 9.06 or 0.38% to 2,384.94. This is the highest level for the Nasdaq since February 2001.
Market breadth was positive. On the New York Stock Exchange, winners topped losers 2 to 1 on volume of 1.688 billion shares. On the Nasdaq, advancers beat decliners 17 to 12 on volume of 2.126 billion shares.
While the Democrats have won a majority in the House of Representatives, the decision is too close to call in the Senate. Outcome of the cliffhanger race in Virginia will determine who gains control of the Senate. Although Democrats have won the House of Representatives, they are ideologically scattered, and therefore it would be difficult to form a single position on big issues. Stocks also drew strength from news of Rumsfeld's resignation, which President Bush discussed in an afternoon press conference at the White House. Bush said "the good news of the economy was overwhelmed by the toughness of this fight" in Iraq, as he nominated former CIA chief Robert Gates to replace Rumsfeld at the Pentagon.
It is clear that owing to internal divisions, we are not likely to get any market-moving legislation out of this Congress in the next two years. Any attempt to get market-moving legislation passed, such as something that impacts fiscal policy, may be faced by a veto. Therefore, investors need to focus on issues such as strong earnings, the belief that the economy is headed for a so-called "soft landing" and supportive Federal Reserve policy regarding interest rates.
Shares of mortgage-finance companies Fannie Mae and Freddie Mac rose on expectations that Democrats will take a more conciliatory approach toward the two institutions. The companies hold about $1.5 trillion worth in mortgage-backed securities, a sum that Republicans have criticized for being too high and as potentially putting the financial system at risk. Fannie shares closed up almost 3%, while Freddie gained about 2%.
Shares of Merck closed down $1.56 or 3.4% to $44.34, as the company is facing $5.6 billion in tax liabilities related to accounting for past transactions.
Stem cell research companies rose on bets about the new Congress, including news that Missouri voters approved a measure guaranteeing federally-supported research and treatment in the state. Shares of StemCells closed up $0.32 to $3.39, and Geron gained $0.28 to $8.66.
Shares of Federated Department Stores Inc. closed down 1.2% to $39.87 after posting quarterly results that fell shy of Wall Street expectations. The company reported a loss of $3 million, against a profit of $436 million last year. Results include $145 million in charges in efforts to turn May Co. stores, which it acquired last year, into Macy's as well as what the company called "related inventory valuation adjustments." However, sales climbed 6%, reaching $5.89 billion from $5.56 billion.
Shares of Sirius Satellite Radio Inc. gained almost 1% to close at $4.12 after the company reported a narrower third-quarter loss and reiterated its forecast for 2006, as subscriber additions soared, especially among customers with Sirius equipped cars and trucks who opted to take the service. The company lost $163 million, compared to $180.5 million a year earlier. Total revenue more than doubled to $167.1 million from $66.8 million.
U.S. light crude oil for December delivery rose 90 cents to settle at $59.83 a barrel on the New York Mercantile Exchange. The weekly inventory report showed a smaller-than-expected rise in crude supplies and as data showed that distillates, which includes winter heating oil, fell for a fifth week.
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Stocks ended higher with the Dow Jones Industrial Average setting a new record close, after investors concluded that little market-moving legislation is likely to come out of the new Democratic party controlled House of Representatives and a Senate whose leadership remains uncertain. The broader market also welcomed the resignation of Defense Secretary Donald Rumsfeld.
Today, the Dow Jones industrial average closed up 19.77 or 0.16% to 12,176.54, the broader S&P 500 index closed up 2.88 or 0.21% to 1,385.72, and the tech-fueled Nasdaq composite closed up 9.06 or 0.38% to 2,384.94. This is the highest level for the Nasdaq since February 2001.
Market breadth was positive. On the New York Stock Exchange, winners topped losers 2 to 1 on volume of 1.688 billion shares. On the Nasdaq, advancers beat decliners 17 to 12 on volume of 2.126 billion shares.
While the Democrats have won a majority in the House of Representatives, the decision is too close to call in the Senate. Outcome of the cliffhanger race in Virginia will determine who gains control of the Senate. Although Democrats have won the House of Representatives, they are ideologically scattered, and therefore it would be difficult to form a single position on big issues. Stocks also drew strength from news of Rumsfeld's resignation, which President Bush discussed in an afternoon press conference at the White House. Bush said "the good news of the economy was overwhelmed by the toughness of this fight" in Iraq, as he nominated former CIA chief Robert Gates to replace Rumsfeld at the Pentagon.
It is clear that owing to internal divisions, we are not likely to get any market-moving legislation out of this Congress in the next two years. Any attempt to get market-moving legislation passed, such as something that impacts fiscal policy, may be faced by a veto. Therefore, investors need to focus on issues such as strong earnings, the belief that the economy is headed for a so-called "soft landing" and supportive Federal Reserve policy regarding interest rates.
Shares of mortgage-finance companies Fannie Mae and Freddie Mac rose on expectations that Democrats will take a more conciliatory approach toward the two institutions. The companies hold about $1.5 trillion worth in mortgage-backed securities, a sum that Republicans have criticized for being too high and as potentially putting the financial system at risk. Fannie shares closed up almost 3%, while Freddie gained about 2%.
Shares of Merck closed down $1.56 or 3.4% to $44.34, as the company is facing $5.6 billion in tax liabilities related to accounting for past transactions.
Stem cell research companies rose on bets about the new Congress, including news that Missouri voters approved a measure guaranteeing federally-supported research and treatment in the state. Shares of StemCells closed up $0.32 to $3.39, and Geron gained $0.28 to $8.66.
Shares of Federated Department Stores Inc. closed down 1.2% to $39.87 after posting quarterly results that fell shy of Wall Street expectations. The company reported a loss of $3 million, against a profit of $436 million last year. Results include $145 million in charges in efforts to turn May Co. stores, which it acquired last year, into Macy's as well as what the company called "related inventory valuation adjustments." However, sales climbed 6%, reaching $5.89 billion from $5.56 billion.
Shares of Sirius Satellite Radio Inc. gained almost 1% to close at $4.12 after the company reported a narrower third-quarter loss and reiterated its forecast for 2006, as subscriber additions soared, especially among customers with Sirius equipped cars and trucks who opted to take the service. The company lost $163 million, compared to $180.5 million a year earlier. Total revenue more than doubled to $167.1 million from $66.8 million.
U.S. light crude oil for December delivery rose 90 cents to settle at $59.83 a barrel on the New York Mercantile Exchange. The weekly inventory report showed a smaller-than-expected rise in crude supplies and as data showed that distillates, which includes winter heating oil, fell for a fifth week.
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