Daily Market Summary 11/1/06

[Portfolio Crafter]

End of Day Market Summary Wednesday, 11/1/2006
by Portfolio Crafter
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Stocks fell today and sent the Dow Jones Industrial Average to its fourth consecutive loss, after a pair of weak economic reports sparked worries about the speed of the economic slowdown, giving investors a reason to retreat from the recent rally. Although strong earnings from MasterCard and Burger King minimized the gloom, the market also focused on a multibillion-dollar merger between CVS Corp. and Caremark Rx.

Today, the Dow Jones industrial average closed down 49.71 or 0.41% to 12,031.02, the broader S&P 500 index closed down 10.13 or 0.74% to 1,367.81, and the tech-fueled Nasdaq composite closed down 32.36 or 1.37% to 2,334.35.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by 21 to 11 on volume of 1.797 billion shares. On the Nasdaq, decliners trounced advancers 22 to 7 on volume of 2.076 billion shares.

Stocks lost steam following the release of the morning economic reports, including the weak ISM manufacturing report for October. The ISM index fell to 51.2% from 52.9% in September, the lowest level since June 2003 and an unexpected decline. All the numbers pointed toward a weaker economy, and now investors are saying they're concerned about a slowing economy.

A gauge of future home buying fell 1.1% in September, a signal that sales will be roughly flat for the next few months. The pending home sales index fell 1.1% in September after a 4.7% increase in August. Outlays on U.S. construction projects fell 0.3% in September, led by drops in spending on private residential construction and federal building projects. Private residential construction spending fell 1.1% in September after declining by 1.6% in August.

CVS Corp. reached an agreement to acquire Caremark Rx Inc. for $20.8 billion in stock. Shares of CVS closed down $2.32 or 7.4% to $29.06, and that of Caremark closed down $1.06 or 2.2% to $48.17. This move comes in the wake of Wal-Mart Stores Inc.'s move to slash prices on certain generic drugs.

Shares of Time Warner closed down $0.24 or 1.2% to $19.77, after reporting quarterly sales and earnings that rose from a year earlier, but were shy of forecasts. The company reported revenue of $10.9 billion, up 7% from a year ago, against the expected $11.1 billion. It reported an EPS of 19 cents, up 12% from last year. Its revenue declined due to the ongoing loss of dialup-access customers.

Shares of MasterCard Inc. closed up $10.97 or 14.8% to $85.07 after third-quarter net income powered past Wall Street estimates with an 82% rise. This was the company's first full quarterly earnings report since its IPO in May.

Stock of Gramin closed down $8.43 or over 15% to $44.98, after reporting quarterly revenue that rose from a year earlier, but missed analysts' expectations. The company also reported higher quarterly earnings that met estimates.

Shares of Burger King shares rose 6.7% to $17.90 after it reported a better than 80% jump in fiscal first-quarter profit thanks to better margins, lower taxes and more new restaurant openings. The company reported that it earned $40 million, up from $22 million last year. Revenue increased 7% to $546 million with worldwide sales growth of 2.4%.Analyst had expected a revenue of $538.1 million.

U.S. light crude oil for December delivery fell 2 cents to settle at $58.71 a barrel on the New York Mercantile Exchange. The latest weekly supply data confirmed trader expectations of an increase in crude inventories and a decline in stocks of petroleum products.

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