Portfolio Crafter
01-18-2007, 08:21 PM
End of Day Market Summary Thursday, January 18, 2007
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Stocks closed lower after an earnings forecast from technology icon Apple Inc. disappointed investors, weighing heavily on shares throughout the tech sector. The Nasdaq composite slumped for a second straight session amidst worries about the strength of technology earnings in the just-completed fourth quarter.
Today, the Dow Jones Industrial average closed down 9.22 or 0.07% to 12,567.93, the S&P 500 index closed down 4.25 or 0.3% to 1,426.37, and the Nasdaq closed down 36.21 or 1.46% to 2,443.21.
Market breadth was negative. On the New York Stock Exchange, losers topped winners 5 to 3 on volume of 1.61 billion shares. On the Nasdaq, decliners trounced advancers by more than 3 to 1 as 2.4 billion shares changed hands.
Stocks lost today on Apple's earnings forecast and a spate of mixed economic news. Investors were also likely backing off in the aftermath of the rally in the second half of 2006. With the new year, there is some portfolio realigning going on as they move out of riskier areas of the market. However, longer term the bias for stocks remains positive, but in the very near term, more selling would not be a surprise.
In economic news, the December CPI rose 0.5% in the month, and the core CPI rose 0.2%, in line with forecasts. This report did little to quell inflationary worries, and with oil prices having slumped considerably since December, future reports could show lower pricing pressures. Federal Reserve officials remain wary about the potential for inflation to flare up, though expectations for price rises have been well contained. For the full year 2006, the CPI increased by 2.5%, an improvement over 2005 when it was up 3.4%.
The pace of home building rebounded in December. Housing starts jumped to an annual pace of 1.64 million against the forecast 1.57 million. Building permits, jumped 5.5% to an annual rate of just under 1.60 million from the nine-year low of 1.51 million pace in November.
The Philadelphia Fed index rose to 8.3 in January, against the expected rise to 2.0. Federal Reserve chairman Ben Bernanke, bluntly warned the U.S. Congress that failure to act soon to deal with the budgetary strains posed by an aging U.S. population could lead to serious economic harm. He also acknowledged projections that the U.S. budget deficit could hold steady or even narrow in the near-term.
Shares of Apple closed down $5.88 or 5% to $89.07, after it issued fiscal second-quarter sales and earnings guidance that was short of analysts' forecasts. In the latest quarter, Apple reported an EPS of $1.14, beating the 78 cents expected by analysts. It reported a net quarterly income of $1.0 billion, up 77% from $565 million in the year-ago quarter. It reported quarterly revenue of $7.1 billion, against the expected $6.42 billion.
Stock of Lam Research closed down 13% after warning that shipment delays will weigh on the current quarter's results. That overshadowed the company's otherwise upbeat second-quarter earnings.
Shares of Merrill Lynch closed down $1.41 to $95.40, despite reporting quarterly earnings that jumped from a year ago and topped analysts' expectations, thanks to a gain in M&A advisory fees and strength in its private equity business.
U.S. light crude oil for February delivery closed down $1.76 to $50.48 a barrel on the New York Mercantile Exchange, falling after a surprisingly strong weekly energy inventories report. However, unlike last year, the sell-off in oil has not goosed stock gains, with investors perhaps betting that oil prices could rebound or concerned about what a drop in oil prices might mean for Fed policy.
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by Portfolio Crafter (http://www.portfoliocrafter.com?a_aid=fiasco)
30-day risk-free trial (http://www.portfoliocrafter.com?a_aid=fiasco)
Stocks closed lower after an earnings forecast from technology icon Apple Inc. disappointed investors, weighing heavily on shares throughout the tech sector. The Nasdaq composite slumped for a second straight session amidst worries about the strength of technology earnings in the just-completed fourth quarter.
Today, the Dow Jones Industrial average closed down 9.22 or 0.07% to 12,567.93, the S&P 500 index closed down 4.25 or 0.3% to 1,426.37, and the Nasdaq closed down 36.21 or 1.46% to 2,443.21.
Market breadth was negative. On the New York Stock Exchange, losers topped winners 5 to 3 on volume of 1.61 billion shares. On the Nasdaq, decliners trounced advancers by more than 3 to 1 as 2.4 billion shares changed hands.
Stocks lost today on Apple's earnings forecast and a spate of mixed economic news. Investors were also likely backing off in the aftermath of the rally in the second half of 2006. With the new year, there is some portfolio realigning going on as they move out of riskier areas of the market. However, longer term the bias for stocks remains positive, but in the very near term, more selling would not be a surprise.
In economic news, the December CPI rose 0.5% in the month, and the core CPI rose 0.2%, in line with forecasts. This report did little to quell inflationary worries, and with oil prices having slumped considerably since December, future reports could show lower pricing pressures. Federal Reserve officials remain wary about the potential for inflation to flare up, though expectations for price rises have been well contained. For the full year 2006, the CPI increased by 2.5%, an improvement over 2005 when it was up 3.4%.
The pace of home building rebounded in December. Housing starts jumped to an annual pace of 1.64 million against the forecast 1.57 million. Building permits, jumped 5.5% to an annual rate of just under 1.60 million from the nine-year low of 1.51 million pace in November.
The Philadelphia Fed index rose to 8.3 in January, against the expected rise to 2.0. Federal Reserve chairman Ben Bernanke, bluntly warned the U.S. Congress that failure to act soon to deal with the budgetary strains posed by an aging U.S. population could lead to serious economic harm. He also acknowledged projections that the U.S. budget deficit could hold steady or even narrow in the near-term.
Shares of Apple closed down $5.88 or 5% to $89.07, after it issued fiscal second-quarter sales and earnings guidance that was short of analysts' forecasts. In the latest quarter, Apple reported an EPS of $1.14, beating the 78 cents expected by analysts. It reported a net quarterly income of $1.0 billion, up 77% from $565 million in the year-ago quarter. It reported quarterly revenue of $7.1 billion, against the expected $6.42 billion.
Stock of Lam Research closed down 13% after warning that shipment delays will weigh on the current quarter's results. That overshadowed the company's otherwise upbeat second-quarter earnings.
Shares of Merrill Lynch closed down $1.41 to $95.40, despite reporting quarterly earnings that jumped from a year ago and topped analysts' expectations, thanks to a gain in M&A advisory fees and strength in its private equity business.
U.S. light crude oil for February delivery closed down $1.76 to $50.48 a barrel on the New York Mercantile Exchange, falling after a surprisingly strong weekly energy inventories report. However, unlike last year, the sell-off in oil has not goosed stock gains, with investors perhaps betting that oil prices could rebound or concerned about what a drop in oil prices might mean for Fed policy.
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