Portfolio Crafter
11-09-2006, 11:34 PM
End of Day Market Summary Thursday 11/9/2006
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Stocks closed lower and snapped a three-session winning streak, felled by weaker-than-expected consumer sentiment data, higher crude prices and worries about how pharmaceutical and defense companies will fare under a Democratic party-dominated Congress. Investors bailed out of drug, telecom and financial stocks, following confirmation that the Democratic Party will control all of Congress for the first time since 1994.
Today, the Dow Jones industrial average closed down 73.24 or 0.6% to 12,103.3, the broader S&P 500 index closed down 7.39 or 0.53% to 1,378.33, and the tech-fueled Nasdaq composite index closed down 8.93 or 0.37% to 2,376.01, after having risen through the early afternoon in response to Cisco's strong earnings.
Market breadth was negative. On the New York Stock Exchange, losers beat winners 19 to 13 on volume of 1.857 billion shares. On the Nasdaq, decliners topped advancers two to one on volume of 2.419 billion shares.
The market was a little caught off guard by the Democrats not only winning the House, but winning it by such a large margin, let alone winning the Senate. This resulted in drug stocks getting punished on worries about legislation. Markets remained choppy as investors focused on the election, as well as corporate and economic news.
In economic news, the U.S. trade deficit narrowed by 6.8%, more than what analysts were expecting in September, due to lower oil prices and record exports. Imports outstripped exports by $64.3 billion, down from the revised $69.0 billion gap for August. Economists had forecast the gap to fall to $66.0 billion in September. The non-petroleum part of the trade gap declined, helped by strong U.S. exports which reached $123.2 billion in the month, up $554 million. The trade gap with China rose by another $1 billion in the month to just under $23 billion. Other data reports pointed to economic weakness. The University of Michigan's consumer sentiment report fell to 92.3 from 93.6 in October. The wholesale inventories reached their highest level relative to sales in over a year. Weekly jobless claims fell a greater-than-expected 20,000 to 308,000, reflecting strength in the labor market.
Shares Viacom closed down 3.3% at $38.37. The company reported a 16% decline in third-quarter earnings, but the results topped analyst forecasts. The company also announced the departure of its CFO. Its net income fell to $356.8 million, from $423.3 million in the year-ago period. Revenue rose to $2.66 billion from $2.48 billion, against the expected $2.63 billion.
Shares of 3M Co. closed down 52 cents at $78.90. The company said that it would sell its global branded pharmaceutical business in three deals for a total $2.1 billion. Graceway Pharmaceuticals Inc. agreed to acquire 3M's pharmaceutical operations in the U.S., Canada, and Latin America for $875 million. Meda AB has agreed to acquire it in Europe for $857 million, and Ironbridge Capital and Archer Capital will buy the Asia-Pacific operations, including Australia and South Africa, for $349 million. 3M expects to close the deals in the fourth quarter.
The star of the day, Cisco Systems closed up $1.60 or 6.3% to $26.69, after reporting higher fiscal first-quarter earnings and sales that topped estimates. The company also issued a bullish fiscal second-quarter revenue outlook. Its first-quarter earnings rose 28% to $1.61 billion, from $1.26 billion a year earlier. Sales rose 25% to $8.18 billion. Revenue was boosted by acquisition of Scientific-Atlanta, which contributed $584 million in quarterly sales.
Shares of Hewlett-Packard rose after Goldman Sachs raised its earnings estimates and price target for the stock, ahead of what was expected to be strong fiscal fourth-quarter results. The stock gained 1.8% to $39.56.
U.S. light crude oil for December delivery rose $1.33 to $61.16 a barrel on the New York Mercantile Exchange. Natural-gas futures shot up nearly 4% on continued concerns over supply declines.
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Stocks closed lower and snapped a three-session winning streak, felled by weaker-than-expected consumer sentiment data, higher crude prices and worries about how pharmaceutical and defense companies will fare under a Democratic party-dominated Congress. Investors bailed out of drug, telecom and financial stocks, following confirmation that the Democratic Party will control all of Congress for the first time since 1994.
Today, the Dow Jones industrial average closed down 73.24 or 0.6% to 12,103.3, the broader S&P 500 index closed down 7.39 or 0.53% to 1,378.33, and the tech-fueled Nasdaq composite index closed down 8.93 or 0.37% to 2,376.01, after having risen through the early afternoon in response to Cisco's strong earnings.
Market breadth was negative. On the New York Stock Exchange, losers beat winners 19 to 13 on volume of 1.857 billion shares. On the Nasdaq, decliners topped advancers two to one on volume of 2.419 billion shares.
The market was a little caught off guard by the Democrats not only winning the House, but winning it by such a large margin, let alone winning the Senate. This resulted in drug stocks getting punished on worries about legislation. Markets remained choppy as investors focused on the election, as well as corporate and economic news.
In economic news, the U.S. trade deficit narrowed by 6.8%, more than what analysts were expecting in September, due to lower oil prices and record exports. Imports outstripped exports by $64.3 billion, down from the revised $69.0 billion gap for August. Economists had forecast the gap to fall to $66.0 billion in September. The non-petroleum part of the trade gap declined, helped by strong U.S. exports which reached $123.2 billion in the month, up $554 million. The trade gap with China rose by another $1 billion in the month to just under $23 billion. Other data reports pointed to economic weakness. The University of Michigan's consumer sentiment report fell to 92.3 from 93.6 in October. The wholesale inventories reached their highest level relative to sales in over a year. Weekly jobless claims fell a greater-than-expected 20,000 to 308,000, reflecting strength in the labor market.
Shares Viacom closed down 3.3% at $38.37. The company reported a 16% decline in third-quarter earnings, but the results topped analyst forecasts. The company also announced the departure of its CFO. Its net income fell to $356.8 million, from $423.3 million in the year-ago period. Revenue rose to $2.66 billion from $2.48 billion, against the expected $2.63 billion.
Shares of 3M Co. closed down 52 cents at $78.90. The company said that it would sell its global branded pharmaceutical business in three deals for a total $2.1 billion. Graceway Pharmaceuticals Inc. agreed to acquire 3M's pharmaceutical operations in the U.S., Canada, and Latin America for $875 million. Meda AB has agreed to acquire it in Europe for $857 million, and Ironbridge Capital and Archer Capital will buy the Asia-Pacific operations, including Australia and South Africa, for $349 million. 3M expects to close the deals in the fourth quarter.
The star of the day, Cisco Systems closed up $1.60 or 6.3% to $26.69, after reporting higher fiscal first-quarter earnings and sales that topped estimates. The company also issued a bullish fiscal second-quarter revenue outlook. Its first-quarter earnings rose 28% to $1.61 billion, from $1.26 billion a year earlier. Sales rose 25% to $8.18 billion. Revenue was boosted by acquisition of Scientific-Atlanta, which contributed $584 million in quarterly sales.
Shares of Hewlett-Packard rose after Goldman Sachs raised its earnings estimates and price target for the stock, ahead of what was expected to be strong fiscal fourth-quarter results. The stock gained 1.8% to $39.56.
U.S. light crude oil for December delivery rose $1.33 to $61.16 a barrel on the New York Mercantile Exchange. Natural-gas futures shot up nearly 4% on continued concerns over supply declines.
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