Portfolio Crafter
12-08-2006, 12:44 AM
End of Day Market Summary Thursday 12/7/2006
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Stocks closed lower as optimism about a drop in weekly jobless claims was offset by weakness in the technology sector, sparked by speculation that Apple Computer Inc. will delay the release of its iPhone device. Stocks lost ground in the tech sector and the broad market, where an absence of catalysts left investors mostly sidelined, but many investors seem to be waiting to see tomorrow's data on U.S. employment growth.
Today, the Dow Jones industrial average closed down 32.13 or 0.25% to 12,277.12, the broader S&P 500 closed down 4.79 or 0.40% to 1,408.11, and the tech-fueled Nasdaq closed down 14.44 or 0.74% to 2,431.42.
Market breadth was negative. On the New York Stock Exchange, decliners beat advancers 19 to 13 on volume of 1.45 billion shares. On the Nasdaq, losers topped winners 18 to 11 on volume of 2.08 billion shares.
Initially, the market received a boost when the Labor Department reported weekly jobless claims had declined sharply by 34,000 to 324,000, in line with expectations. Investors now expect the November jobs report, to be released tomorrow, to surpass economists' average forecasts that the economy added 112,000 jobs. Any number around the expectation would be good news. However, if it is much stronger or weaker than expected, then it would be a negative. While a number that’s slightly better than estimates might reassure investors, a payrolls number substantially above forecasts could raise worries about wage inflation.
The next focus will be the Fed's last monetary-policy meeting of the year next Tuesday. At that meeting, the central bank is widely expected to leave a key short-term interest rate unchanged. However, on Thursday, the European Central Bank (ECB) boosted its benchmark lending rate by a quarter-percentage point to 3.50%, as expected. However, the bank implied it might not raise rates again at its next meeting and also lowered its 2007 forecast on inflation, due to lower oil prices.
Shares of Apple dropped 3% after the company stated that it will release its latest multimedia device -- the iPhone -- late in the first quarter or early in the second quarter of 2007. It was speculated that the new blockbuster would be coming out soon, so any perception of a delay will take some steam out of the stock.
Stock of Home Depot closed down $0.99 to $38.93, after a review showed it had unrecorded expenses of about $200 million connected to stock options. While fixing the problem would have little effect on its finances, the investors sent shares 2.5% lower.
Shares of Fannie Mae closed up $1.11 or 2% to $59.61, after stating that it has overstated its earnings between 2001 and 2004 by $6.3 billion. This is a smaller amount than the $10.8 billion that had been expected in the aftermath of the company's accounting scandal.
Stock of General Motors closed down $0.32 to $29.05, despite stating that its market share has bottomed out and that it sees crossover vehicles as the means of driving market share gains in the future. The company is also making progress in key negotiations on labor and contract issues with former unit Delphi Corp.
Stock of Oracle closed down $0.38 or 5% to $17.50, after Lehman Bros. said that investors should sell the stock ahead of the company's quarterly earnings report. Investors are likely to find database results disappointing.
Shares of Vanda Pharmaceuticals closed up $10.65 or 69% to $26.15, after its experimental schizophrenia drug was found effective in a late-stage trial. The company said it expects to file a marketing application for the drug, iloperidone, with U.S. regulators in late 2007. The trial has met its main goal of showing a statistically significant improvement in treating the symptoms of schizophrenia in patients taking the drug compared to those taking a placebo.
U.S. light crude oil prices for January delivery added 30 cents to settle at $62.49 a barrel on the New York Mercantile Exchange.
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Stocks closed lower as optimism about a drop in weekly jobless claims was offset by weakness in the technology sector, sparked by speculation that Apple Computer Inc. will delay the release of its iPhone device. Stocks lost ground in the tech sector and the broad market, where an absence of catalysts left investors mostly sidelined, but many investors seem to be waiting to see tomorrow's data on U.S. employment growth.
Today, the Dow Jones industrial average closed down 32.13 or 0.25% to 12,277.12, the broader S&P 500 closed down 4.79 or 0.40% to 1,408.11, and the tech-fueled Nasdaq closed down 14.44 or 0.74% to 2,431.42.
Market breadth was negative. On the New York Stock Exchange, decliners beat advancers 19 to 13 on volume of 1.45 billion shares. On the Nasdaq, losers topped winners 18 to 11 on volume of 2.08 billion shares.
Initially, the market received a boost when the Labor Department reported weekly jobless claims had declined sharply by 34,000 to 324,000, in line with expectations. Investors now expect the November jobs report, to be released tomorrow, to surpass economists' average forecasts that the economy added 112,000 jobs. Any number around the expectation would be good news. However, if it is much stronger or weaker than expected, then it would be a negative. While a number that’s slightly better than estimates might reassure investors, a payrolls number substantially above forecasts could raise worries about wage inflation.
The next focus will be the Fed's last monetary-policy meeting of the year next Tuesday. At that meeting, the central bank is widely expected to leave a key short-term interest rate unchanged. However, on Thursday, the European Central Bank (ECB) boosted its benchmark lending rate by a quarter-percentage point to 3.50%, as expected. However, the bank implied it might not raise rates again at its next meeting and also lowered its 2007 forecast on inflation, due to lower oil prices.
Shares of Apple dropped 3% after the company stated that it will release its latest multimedia device -- the iPhone -- late in the first quarter or early in the second quarter of 2007. It was speculated that the new blockbuster would be coming out soon, so any perception of a delay will take some steam out of the stock.
Stock of Home Depot closed down $0.99 to $38.93, after a review showed it had unrecorded expenses of about $200 million connected to stock options. While fixing the problem would have little effect on its finances, the investors sent shares 2.5% lower.
Shares of Fannie Mae closed up $1.11 or 2% to $59.61, after stating that it has overstated its earnings between 2001 and 2004 by $6.3 billion. This is a smaller amount than the $10.8 billion that had been expected in the aftermath of the company's accounting scandal.
Stock of General Motors closed down $0.32 to $29.05, despite stating that its market share has bottomed out and that it sees crossover vehicles as the means of driving market share gains in the future. The company is also making progress in key negotiations on labor and contract issues with former unit Delphi Corp.
Stock of Oracle closed down $0.38 or 5% to $17.50, after Lehman Bros. said that investors should sell the stock ahead of the company's quarterly earnings report. Investors are likely to find database results disappointing.
Shares of Vanda Pharmaceuticals closed up $10.65 or 69% to $26.15, after its experimental schizophrenia drug was found effective in a late-stage trial. The company said it expects to file a marketing application for the drug, iloperidone, with U.S. regulators in late 2007. The trial has met its main goal of showing a statistically significant improvement in treating the symptoms of schizophrenia in patients taking the drug compared to those taking a placebo.
U.S. light crude oil prices for January delivery added 30 cents to settle at $62.49 a barrel on the New York Mercantile Exchange.
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