Daily Market Summary 1/16/07

[Portfolio Crafter]

End of Day Market Summary Tuesday, January 16, 2007
by Portfolio Crafter
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Stocks closed mixed after investors digested in-line earnings results from Wells Fargo & Co. and a weak forecast from Symantec Corp., while energy shares weighed amid a continued slide in crude oil prices. Blue chips got a lift on lower oil prices and techs slid ahead of Intel's quarterly report, expected after the close.

Today, the Dow Jones Industrial average closed up 26.51 or 0.21% to 12,582.59, closing at a fresh record high for the third session in a row. The S&P 500 closed up 1.17 or 0.08% to 1,431.90, building on the more than 6 year high it closed at last week, and the Nasdaq closed down 5.04 or 0.20% to 2,497.78, after ending the previous session at its highest point in nearly six years.

Market breadth was mixed. On the New York Stock Exchange, losers and winners were roughly even on volume of 1.50 billion shares. On the Nasdaq, decliners topped advancers by eight to seven on volume of 2.17 billion shares.

The market appears to be in the waiting game. This is a big week on both the economic front, with numbers on inflation and housing, and on the earnings front, starting with a number of companies to declare their earnings. While the slide in oil prices has been positive for the economy and the inflation outlook, it's been a mixed blessing for the stock market. This has helped the rally but has also hurt energy shares. There is continued uncertainty about the strength of the economy. Additionally, the NY Empire State index, a regional read on manufacturing, fell to 9.1 in January from 22 the previous month. This is against the expected fall to 20 in the month.

Shares of Wells Fargo closed up $0.73 to $36.24, after it reported quarterly earnings that rose from a year ago. Wells Fargo said earnings increased to $2.18 billion, from $1.93 billion last year. Revenue grew by 11%, reaching $9.4 billion. Additionally, Bear Stearns said it'll pay an undisclosed price to buy from Wells Fargo its direct and indirect consumer-finance subsidiaries serving Latin America.

Shares of Symantec closed down $2.69 or 7% to $17.79, after the web and network security software maker warned that fiscal third quarter and 2007 profit will miss forecasts. Additionally, Symantec also received a pair of downgrades. CIBC World Markets downgraded the stock to sector performer from sector out performer, while J.P. Morgan a downgraded the stock to neutral from overweight.

Stock of General electric closed up $0.25 to $38.14, after it agreed to buy the aerospace unit of Smiths Group for $4.8 billion in cash as it seeks to further capitalize on the airline industry's return to health and robust U.S. military spending. This acquisition signals GE's determination to cash in on record new plane orders and the accompanying surge in demand for flight management technology and aircraft components.

Shares of BP closed down $1.37 to $63.27, as a committee led by former Secretary of State James Baker said that it failed to provide the leadership, resources or structure needed for effective safety at its five U.S. refineries, leading to "material" problems at all of them. The explosion killed 15 people at a Texas City refinery in 2005, led to the commission that has singled out CEO John Browne for paying too much attention to environmental issues and not enough to safety at his own refineries.

Oil prices continued to slide with U.S. light crude oil for February delivery falling $1.78 to settle at $51.21 a barrel on the New York Mercantile Exchange. Prices fell after Saudi Arabia's oil minister said that OPEC production cuts were effective and there was no need for an emergency meeting of the oil cartel.

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