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Stocks set for higher start
Futures turn higher after unemployment claims fall. Investors await Friday's jobs report.
NEW YORK (CNNMoney.com) -- U.S. stocks are expected to open higher Thursday after the number of people filing for unemployment fell.
At 8:43 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq 100 futures were all higher. Futures had stagnated prior to the jobless report.
Futures measure current index values against their perceived future performance and offer an indication of how markets may open when trading begins.
Economy: The number of people filing unemployment claims last week fell more than expected.
The report comes a day before the U.S. Labor Department releases its closely watched monthly jobs report.
Earnings: Tech bellwether Cisco Systems (CSCO, Fortune 500) reported a drop in quarterly profit and revenue after U.S. markets closed Wednesday.
World markets: Global stocks headed higher. Markets in Asia finished the session in positive territory, with Japan's Nikkei adding 1%. Major European markets were also higher in morning trading.
Oil hovered around $72 a barrel. The dollar was flat versus the euro and up against the yen. 
Obama launches economic counter-attack
Posted: 06 August 2009 1403 hrs
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 Photographer takes a picture of the world's largest beaded mosaic of US President Barack Obama in New York |
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WASHINGTON: Despite staggering job losses and nationwide financial misery, President Barack Obama has a new message for recession-weary Americans: the pulse of the sickly US economy is quickening.
With his once sky-high approval ratings eroding by the week as Republican foes slash away at his ambitious domestic reform plans, Obama is seeking to remold the debate on the economic crisis.
His efforts come ahead of new unemployment figures due on Friday that analysts expect to show the jobless rate climbing to a 26-year high of 9.6 per cent, ever closer to the politically perilous 10 per cent barrier.
On Wednesday, Obama traveled to the heart of the meltdown, to a corner of midwestern Indiana, where the unemployment rate is around 16 per cent, to mount a staunch defence of his US$787-billion economic rescue package.
"There are those who want to seek political advantage, they want to oppose these efforts," Obama said.
"Some of them caused the problems that we have got now in the first place, and then suddenly they're blaming other folks for it."
Obama's assault also had the feel of a pep talk to those on the edge of despair, as he unveiled a US$2.4-billion programme to develop electric hybrid vehicles, which he said would create tens of thousands of jobs.
"We don't give up. We don't surrender our fates to chance... this country wasn't built just by griping and complaining. It was built by hard work and taking risks."
Obama previewed his new message in his weekly radio address on Saturday, claiming his policies were having direct results.
"In the last few months, the economy has done measurably better than expected. And many economists suggest that part of this progress is directly attributable to the Recovery Act," he said.
Vice President Joe Biden, who made his own trip to a depressed corner of the midwest, in Michigan on Wednesday, is echoing Obama's call.
"I can tell you today without reservation: the Recovery Act is working," Biden said on Tuesday.
The administration offensive on behalf of the mammoth recovery plan, passed in the darkest days of crisis, is grounded on solid political reality.
Recent polls show Obama's popularity eroding, with growing doubts over his handling of the economy and the huge price of his government rescue interventions in the banking and industrial centres. His healthcare reform plan is facing a tough ride in Congress.
A USA-Today Gallup poll for instance last month showed Obama's approval rating at 55 per cent, six months into his presidency, with pessimism over the pace of recovery draining his momentum.
A few months ago, Republicans, seeking to dent the euphoria surrounding Obama's historic inauguration, accused the president of talking down the economy for political gain.
Now they say it is much worse than the president is letting on, mounting a furious attack on his programme, in the hope of damaging vulnerable Democratic members of Congress in conservative districts.
John Boehner, the top Republican in the House of Representatives, last week promised Democrats a "long, hot summer" and assailed the rescue plan.
"They passed a trillion-dollar stimulus plan that no one read, and it's not created the jobs that Democrats said that it would."
Both Republicans and the White House know that if the stimulus plan can be cast in the public mind as a failure, Obama's political leverage and ability to pass a sweeping reform agenda could be at risk.
So the administration has spent this week, the last before the Congress's summer break, arguing the initial work of stemming the financial slide is over and must now give way to rebuilding a sustainable economy.
Some economic indicators do offer ammunition for the administration, suggesting the pace of decline has slowed.
A new survey by the Institute of Supply Management suggested on Monday that the factory sector moved within striking distance of growth in July.
And top administration officials are now saying that expansion is highly likely to resume in the second half of this year.
But even if economic revival is stirring, punishing job loss figures may be obscuring evidence of recovery for ordinary Americans.
Obama though argues that better economic statistics will revive the labor markets down the road.
"History shows that you need to have economic growth before you have job growth... eventually, businesses will start growing and hiring again," he said Saturday.
"And that's when it will really feel like a recovery to the American people."
- AFP/yb
US private sector cut 371,000 jobs in July: ADP
Posted: 05 August 2009 2315 hrs
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A job seeker at a US career centre. |
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WASHINGTON: The US private sector shed 371,000 jobs in July, sharply lower than the preceding month but more than expected amid the severe and long recession, a survey by payrolls firm ADP showed on Wednesday.
The number of private non-farm jobs that vanished last month exceeded the 350,000 forecast by most analysts.
The ADP National Employment Report said a revised 463,000 jobs were shed in June, slashing 10,000 jobs from its initial estimate.
"Despite recent indications that overall economic activity is stabilising, employment, which usually trails overall economic activity, is likely to decline for at least several more months, albeit at a diminishing rate," ADP said.
The report provides a snapshot on the ailing US labour market in the world's biggest economy, reeling from the worst recession since the Great Depression, ahead of the government's official monthly data, which covers the public and private sectors.
The Labour Department is to publish July jobs data Friday. Most analysts expect the unemployment rate climbed to 9.6 percent from 9.5 percent in June, a 26-year high, amid a painful recession that began in December 2007. - AFP/de
By Matt Townsend
Aug. 5 (Bloomberg) -- U.S. stocks fell, dragging the Standard & Poor’s 500 Index down from a nine-month high, after reports on job losses and service industries were worse than economists estimated.
Nine of the 10 main industry groups in the S&P 500 declined, led by industrial and consumer companies, as United Technologies Corp. and Walt Disney Co. slumped at least 1.5 percent. Procter & Gamble Co., the world’s largest household- products maker, dropped 3.2 percent after profit fell on lower sales of higher-priced skin care and detergents.
The S&P 500 slipped 0.8 percent to 997.79 as of 10:07 a.m. in New York. The gauge climbed yesterday to 0.1 point below its close on Nov. 4, the day President Barack Obama was elected. The Dow Jones Industrial Average fell 76.63 points to 9,243.56.
“Data is less bad, but it’s still going to be weak,” said Tim Hartzell, who manages $300 million as chief investment officer for Houston-based Sequent Asset Management. “The talk is all about the smaller companies that are now into that next phase of downsizing. That’s what we have to go through. There’s going to be some smaller and midsize companies that have to go out of business to reduce capacity.”
Yesterday’s advance pushed the valuation of the S&P 500 to about 17.5 times its companies’ earnings over the past 12 months, the highest level since May 2008, according to daily data compiled by Bloomberg. Since reaching a 12-year low of 676.53 on March 9, the S&P 500 has rebounded 49 percent, the steepest rally since the 1930s.
ADP, ISM Reports
Benchmark indexes opened lower after data from ADP Employer Services showed companies cut 371,000 workers from payrolls in July, more than the average estimate of 350,000 in a Bloomberg survey of economists. The figures from the world’s largest payroll processor have shown declines in employment since February 2008.
Equities extended losses after the Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, fell to 46.4 from 47 in June. Fifty is the dividing line between expansion and contraction.
Procter & Gamble dropped 3.2 percent to $53.69 after saying profit net income for the period ended June 30 dropped to $2.47 billion, or 80 cents share, from $3.02 billion, or 92 cents, a year earlier.
Whole Foods Rallies
Whole Foods Market Inc. rallied 20 percent to $29.65. The company said net income was 25 cents a share in the period ended July 5, exceeding the average estimate of 20 cents in a survey of 13 analysts by Bloomberg. Whole Foods raised its full-year profit forecast after reducing expenses and using coupons to lure customers.
Garmin Ltd., the maker of car navigation devices, surged 23 percent to $33.37 after posting earnings that beat analysts’ estimates by 61 percent. The company also said the first quarter “seems to have represented the low point” in declining revenue.
Per-share earnings have beaten estimates at three-quarters of the 411 companies in the S&P 500 that released second-quarter results since June 17, according to data compiled by Bloomberg.
Companies in the S&P 500 are still headed for a record eighth consecutive drop in quarterly profits. Per-share earnings have tumbled 31 percent on average. Analysts’ estimates compiled by Bloomberg predict a 31 percent drop in the second quarter and a 22 percent third-quarter decline. While earnings are falling, results have surpassed projections by an average 9.5 percent.
Dynavax Technologies Corp. rallied 12 percent to $2.05. The biotechnology company developing products for infectious disease said it expects to resume trials on a hepatitis B vaccine as early as next month.
To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net. Last Updated: August 5, 2009 10:10 EDT
Notice tat DOW broke above the inverse H&S and now above the neckline, around the 200ema (about 8800).
DOW 90ma and 200ema are turning upwards and going to crossover soon:
DOW may pullback to 9000 or the 200ema (neckline) to test the neckline as a support, but tat does not negate the uptrend so l
ong as it does not closed below the neckline for 2 days continuously.
richtan ( Date: 05-Aug-2009 10:29) Posted:
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Notice tat DOW broke above the inverse H&S and now above the neckline, around the 200ema (about 8800).
DOW 90ma and 200ema are turning upwards and going to crossover soon:
richtan ( Date: 05-Aug-2009 00:28) Posted:
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richtan ( Date: 04-Aug-2009 23:46) Posted:
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richtan ( Date: 04-Aug-2009 22:11) Posted:
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DOW looks pretty resilient, looking at my DOW chart posting, believe it will head towards 10,000, albeit not in a straight line, with some corrections in between.
Stocks kick off August with a rally
Economic reports, auto sales and corporate earnings push the Dow and S&P 500 to 9-month highs, the Nasdaq to a 10-month peak.
The Dow Jones industrial average (INDU) added 115 points, or 1.3%, ending at a fresh 9-month high.
The S&P 500 (SPX) index added 15 points, or 1.5%, ending above the 1,000 level for the first time since last November.
The Nasdaq composite (COMP) gained 30 points, or 1.5%, closing above 2,000 for the first time since last November.
Stocks are coming off the best July in years, after a spate of better-than-expected quarterly results reassured investors that the economy is getting closer to stabilizing. Last week, the first-quarter GDP report showed the economy shrank at a 1% rate, versus forecasts for a bigger contraction.
In July, the Dow gained 8.6%, its best July since 1989 and its best month overall since October 2002. The S&P 500 gained 7.4%, its best July since 1988 and its best month since April. The Nasdaq rose 7.8% in the month, its best July since 1997 and the best month overall since this past April.
The July advance -- now stretching into August -- has marked something of a second leg of the rally that started in the spring, said Mike Stanfield, chief investment officer at VSR Financial Services.
Between March 9 and June 12, the S&P 500 gained 40%. But for the next four weeks, stocks drifted lower as investors worried that the market had risen too far, too fast. Once the quarterly earnings reports came out better than expected, stocks resumed the climb.
"The continuation of a rally is going to be dependent on leading indicators showing strength," he said, such as Monday's manufacturing report.
Longer term, "I think Asia could lead us out of this worldwide slump," he said. "I think this time around we are not going to be the engines of growth, but we are going to benefit."
He said that the recent rally in oil and gold prices ties into that trend.
On Tuesday morning, the Commerce Department releases its June readings on personal income and spending. Also Tuesday morning, the National Association of Realtors releases the pending home sales index.
Economy: The Institute for Supply Management's manufacturing index rose to 48.9 in July from 44.8 in June. That was better than the 46.5 economists were expecting, but still short of the 50 level that indicates expansion in the sector.
Construction spending rose 0.3% in June versus forecasts for a decline of 0.5%, according to Briefing.com. Spending fell 0.9% in May.
Autos: Ford Motor reported a gain in July auto sales and other major automakers cut losses, as the government's Cash for Clunkers program helped stimulate sales of cars and trucks.
Ford (F, Fortune 500), the only one of the so-called Big Three automakers that didn't file for bankruptcy protection, said July sales rose 2% versus a year ago. It is the first U.S. automaker to report a rise in monthly sales since November 2007.
General Motors (GM, Fortune 500), Toyota Motor (TM), Chrysler Group and Honda Motor all said sales fell versus a year ago, but rose versus June levels, thanks to Cash for Clunkers.
The popular program gives consumers a rebate check for as much as $4,500 if they trade in their gas guzzlers and buy a fuel-efficient vehicle. But the program could run out of cash by mid-week if the Senate doesn't approve the additional $2 billion in funding the House of Representatives approved last week.
Quarterly results: With two-thirds of the S&P 500 having reported results, profits are on track to have fallen 29.5% from a year ago, according to the latest Thomson Reuters numbers. However, that's an improvement from a month ago, when profits were expected to fall more than 35%.
Profit reports have been topping expectations across the board, with roughly 74% of companies exceeding forecasts, versus the long-term average of 61% of companies. Should the figure hold up through the end of the reporting period, it would be the highest percentage of companies topping estimates in the 15 years Thomson Reuters has been tracking results.
On Monday, Humana (HUM, Fortune 500) reported higher quarterly earnings that topped estimates. Shares of the health insurance provider rose 2.8%.
Marathon Oil (MRO, Fortune 500) reported weaker quarterly earnings on lower oil prices. Nonetheless, results topped estimates. Shares gained 1.2%.
Other company news: Google (GOOG, Fortune 500) CEO Eric Schmidt has resigned from the Apple (AAPL, Fortune 500) board, as the Internet search leader is developing more and more products that compete with Apple's core businesses. Google gained 2%, while Apple gained 1.9%.
Bank of America (BAC, Fortune 500) has agreed to pay $33 million to settle charges that it mislead investors about Merrill Lynch's plans to pay bonuses to its executives. Bank of America completed its purchase of Merrill Lynch on Jan. 1.
Separately, BofA said Sallie Krawcheck, Citigroup's former head of global wealth management, will run BofA's global wealth and investment management operations.
Oil and gold: Commodity prices rallied as investors bet that a global recovery will boost demand for raw materials.
U.S. light crude oil for September delivery rose $2.13 to settle at $71.58 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery rose $2.90 to settle at $958.70 an ounce.
Bonds: Treasury prices tumbled as investors pulled money out of the safe-haven commodity. The slump raised the yield on the benchmark 10-year note to 3.63% from 3.48% late Friday. Treasury prices and yields move in opposite directions.
Other markets: In global trading, European markets rallied after Barclays reported a rise in quarterly profit and HSBC reported a drop in profit that wasn't as steep as analysts had expected. Asian markets ended higher.
In currency trading, the dollar fell versus the euro and rose against the Japanese yen.
Market breadth was positive. On the New York Stock Exchange, winners beat losers four to one on volume of 1.21 billion shares. On the Nasdaq, advancers topped decliners by two to one on volume of 2.19 billion shares.
By Matt Townsend
Aug. 3 (Bloomberg) -- U.S. stocks rose, sending the Standard & Poor’s 500 Index above 1,000 for the first time since November, on growing speculation the recession may be ending and an unexpected profit at Europe’s biggest bank. Oil and metals advanced, while Treasuries fell.
Equities extended gains as reports on manufacturing and construction spending topped forecasts. Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. rallied after HSBC Holdings Plc reported first-half net income of $3.35 billion as earnings from its securities unit doubled. Ford Motor Co. jumped 8.8 percent after a government incentive program helped it achieve its first monthly U.S. sales increase since 2007.
The S&P 500 added 1.4 percent to 1,001.55 at 10:32 a.m. in New York. The Dow Jones Industrial Average rallied 113.97 points, or 1.2 percent, to 9,285.58 and the Nasdaq Composite Index increased 1.1 percent to 2,000.42.
“Earnings in some sectors have been rebounding nicely,” said Eric Teal, who oversees $5 billion as chief investment officer at First Citizens Bank in Raleigh, North Carolina. “What we need are some confirming economic data to indicate the recovery is sustainable and is on a path toward growth in the third and fourth quarters.”
The S&P 500 topped 1,000 for the first time in nine months after better-than-expected profits helped restore $3.7 trillion to U.S. stock markets since March.
Office Depot Inc., Genworth Financial Inc. and Fifth Third Bancorp. rallied sevenfold or more since the benchmark index for American equities fell to a 12-year low of 676.53 on March 9. They were among 16 companies that lost more than 90 percent after the gauge last closed above 1,000 on Nov. 4.
Flirting With 1,000
The S&P 500 remains 36 percent below its all-time high of 1,565.15 on Oct. 9, 2007. Before November, the index traded above 1,000 for five years.
Profits that surpassed analysts’ estimates at a record percentage of S&P 500 companies helped push the index to its fifth consecutive monthly gain in July. The index has risen 48 percent since March 9, its steepest advance since the 1930s, according to data compiled by Bloomberg.
Former Federal Reserve Chairman Alan Greenspan said in an interview yesterday on ABC’s “This Week” program that U.S. economic growth may resume at a rate faster than most economists forecast.
“We may very well have 2.5 percent in the current quarter,” Greenspan said in the interview. “The reason is there has been such an extraordinarily high rate of inventory liquidation that the production levels are well under consumption.”
Banks Gain
Bank of America, the largest U.S. lender, gained 3.4 percent to $15.29. New York-based Citigroup rallied 1.9 percent to $3.23. Barclays Plc joined HSBC in rallying in London after reporting earnings. Barclays jumped to a 10-month high after saying earnings at its investment bank increased to 1.05 billion pounds ($1.8 billion), helped by the thaw in credit markets since its September purchase of Lehman Brothers Holdings Inc.’s North American unit.
Ford gained 8.8 percent to $8.70 after saying it will have its first monthly U.S. sales increase since 2007 as the government’s “cash-for-clunkers” incentives boosted industrywide deliveries of new vehicles to the highest levels of this year.
To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net. Last Updated: August 3, 2009 10:34 EDT