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U.S. stocks open lower; mood is cautious after recent rally


NEW YORK (MarketWatch) - U.S. stocks opened lower Monday, as the market took a pause after recent gains and investors sought details of an incident that caused police to close the U.S. Capitol in Washington D.C.

The Dow Jones Industrial Average was down 24 points at 11,535.

The S&P 500 was down 1.70 point at 1,318 and the Nasdaq Composite off 5 points at 2,230.  

 

The US economy is set to slow sharply in 2007, but it will not drag the rest of the global economy with it, according to a research note by Merrill Lynch.



US GDP growth is set to slow to 1.9% next year from 3.4% this year, driven by a sharp slowdown in the housing market and an accompanying slump in consumer spending, Merrill economists reckon.



The US house prices are set to see an outright decline of about 5% next year, causing US consumers to spend around 1% less, and double that if house price falls are more severe, they said.



"The much-vaunted housing market correction, which has finally hit the US economy, has the potential to pull the US to the brink of recession by early 2007," the Merrill report said.



Non-US growth, however, will decline by only half a percent to 5.2%, held up by higher non-US domestic demand, a rise in intra-regional trade and supportive macroeconomic policies in many of the world's economies.



European countries "could feel the pinch", but will cope much better than in previous US downturns, mainly because growth is being driven by stronger domestic demand and not exports. GDP growth in the region is expected to slow to 2.1% in 2007 from 2.6% in 2006, but this is due to the impact on domestic demand of tighter fiscal policy, Merrill predict.



In Asia, Japan and India appear well-placed to decouple from the US, though Taiwan, Hong Kong and Singapore are more likely to be impacted.



In Japan, export markets are far less reliant on the US than they were in the 1990s, and for the first time in over a decade, the country's financial system is "flush with capital", with banks eager to lend, they said. Firms are also re-investing in their businesses for growth, which should sharply boost domestic demand.



In the Americas meanwhile, Canada will probably be hit, but Brazil "has a high chance of de-coupling from the US, due to its relatively low reliance on exports and its current account surplus".



Global monetary policy is also set to diverge, with Japan and most European and Asian countries expected to continue to raise interest rates, while Australia, Canada and the UK keep rates steady.



Merrill Lynch expects the US Federal Reserve, however, to lower interest rates by 125 basis points in 2007.

 

NEW YORK (CNNMoney.com) -- U.S. stocks were headed for a higher open Monday, as investors consider a reported Intel breakthrough on semiconductor technology among other news items.

At 7:30 a.m. ET, Nasdaq and S&P futures were higher.

Intel (Charts) was expected to announce a breakthrough Monday in the development of chips using lasers, a move seen reducing the cost of high-speed communications.

Shares of Intel were little changed in Frankfurt trading Monday.

Peter Cardillo, chief market strategist SW Bach, said that even though Intel is likely at least five years away from a commercial version of the new chip, the reports of the breakthrough should feed relatively positive market sentiment ahead of Wednesday's Federal Reserve meeting, at which investors are expecting rates to be again left unchanged.

"Right now, negative news seems to be being spun into good news, while good news is lifting stocks," he said. "I think we should see tech and energy stocks keep stocks in a positive trading range."

In other corporate news, Automotive News reported that the chief financial officers of embattled U.S. automakers General Motors (Charts) and Ford Motor (Charts) have held discussions about a possible alliance or merger between the companies, although sources told the trade publication that the chance of a combination between the two are slim.

Citizens Communications (Charts) announced a deal early Monday to buy Commonwealth Telephone Enterprises (Charts) for $1.16 billion in cash and stock.

Telecom Italia agreed to buy AOL's German operations from Time Warner (Charts) for $870 million in cash, the companies announced Sunday. CNNMoney.com is also a unit of Time Warner.

 

Dow ended up 33 points last night but lost most of its gains.

 

Dow up 73 points and Nasdaq up 16 points .... Oil drops to $62.50!

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NEW YORK (MarketWatch) -- U.S. stocks rallied early Friday, as enthusiasm for data showing moderating consumer inflation overshadowed disappointment with Ford Motors Co.'s restructuring plan.

Trading is expected to be relatively brisk throughout the session, and could be more volatile than usual, due to the effect of "quadruple witching," which is the simultaneous expiration of stock index futures, stock index options, stock options and single stock futures.

The market cheered news from the Labor Department that the consumer price index rose 0.2% in August, after a 0.4% gain in July. Core CPI, which excludes food and energy, also increased by 0.2%. Economists surveyed by MarketWatch, on average, had been expecting CPI to rise 0.3% and core CPI to be up 0.2%. See full story.

 

Dow up 61 points and Nasdaq up 16 points now after opening bell ....... FULL GREEN!

 

WASHINGTON (MarketWatch) - Consumer price inflation moderated in August as gasoline and home ownership costs rose at a slower pace, the Labor Department said Friday.

The consumer price index increased 0.2% in August after a 0.4% gain in July, while prices excluding food and energy rose 0.2% for the second straight month.

The 0.2% gain in the core CPI matched expectations on Wall Street. The headline CPI came in one tenth of a percentage point below expectations of MarketWatch's survey of economists.

The core CPI is now up 2.8% in the past year, the biggest gain since December 2001. The core CPI is up at a 3% annual rate so far this year.

The headline CPI is up 3.8% in the past year, down from a 4.1% gain in the 12 months ending in July. So far in 2006, the CPI is running at a 4.6% annual rate.

The relatively tame inflation figures in August should give the Federal Reserve the freedom to hold its overnight interest rate target at 5.25% when it meets next week. The Federal Open Market Committee has said it expects inflationary pressures to ease as the economy slows.

Most analysts surveyed by MarketWatch expect the Fed to hold overnight interest rates steady at 5.25% at the Sept. 20 meeting, but also think the Fed will raise rates at least one more time this year as inflationary pressures continue to grow.

 

Citibank CEO William Rhodes expressed particular concern about the U.S. housing market, where a batch of adjustable rate mortgages will come due next year and force lenders to pay higher interest rates, likely cutting into consumer spending.



He said the conditions were developing for possible stagflation, or a stagnant economy coupled with rising prices.

 

Dow down 15 points last night

STI should be stagnant today...

 

Nasdaq Green!





Dow climbing ..

 

SAN FRANCISCO (MarketWatch) -- Time was, a barrel of crude oil for $64 meant something on Wall Street.

It was only about 15 months ago that crude passed through $64 on its way up, setting off a panic that it would continue to $70 a barrel, $80, even $100, and taking gasoline prices to $4 a gallon along with it. But this week, it's a reason to celebrate.

Oil closed lower than $64 for a second day Wednesday, rising for only the first time in eight days after a fall that brought it down 9% in the past week and from a peak of $78 a barrel in mid-July. With the big decline has come the first talk among analysts and investors that the four-year speculative boom in commodities might be over. See full markets coverage.

Precious metals prices and other commodities are already well off their highs of several weeks ago and now that oil has joined in the slide, the speculation is hitting a fever pitch that the hot money is shifting somewhere else.

Whether this actually is the end of the cycle or whether it's just a pause before another run-up, which oil has done before, is anybody's guess. But it couldn't have come at a better time for the stock market.

With third-quarter earnings season looming, a slowdown in the economy, and the Federal Reserve Board on the fence about whether to raise interest rates again, the last thing stocks needed was $80 crude oil. Now that it's come down in price, the prospects that consumers will spend the money they've saved at the pump is more than welcome as the fourth quarter and holiday season begin.

And that could be just the catalyst the stock market needs for the Dow Jones Industrial Average and the S&P 500 Index to make a run at record highs. As of Wednesday, the Dow was sitting just about 180 points below its record close of 11,722 some six-and-a-half years ago.

That's a long time coming. The Dow has approached its record twice before, including this past spring, but both times it met with serious selling pressure. A bad earnings warning season in the next few weeks, combined with a revival in oil to near $70 again could thwart the Dow once more.

But with oil removed as a barrier, and even lending support to stocks if money continues to flow out of commodities, then the index has its best chance yet.

What this means for the psychology of the investor in the next few months is important, since the increasing talk of a recession in 2007 and a worsening housing downturn have a lot of people wondering where they should put their money.

A strong fourth quarter in the markets even with a potential October scare would ease concerns about recession next year, since the market would likely turn lower in advance of any big economic slump.

The earnings this week from investment banks such as Goldman Sachs Group and Lehman Brothers Holdings, while not records, were still much stronger than Wall Street had expected. Barring any huge downturn in the next few months, it should be another record year for bonuses on Wall Street.

Goldman itself is reportedly putting aside some $14 billion for bonuses. That will fill up a lot of SUVs, even at $3 a gallon.

Of course, this rosy scenario could be shot to pieces should oil start spiking again. September is a notoriously poor month for stocks, especially at the end. So anything can happen. But as long as oil holds at these levels or drifts closer to $60 a barrel or below, the odds that we'll finally see a new high on the Dow after all these years are finally starting to fall in line.

David Callaway is editor-in-chief of MarketWatch

 

I believe Wall Street will try to test the May highs, followed by a correction within the next 2 weeks.

 

Wall Street pulled back as investors looked past an unexpected rise in retail sales and focused on an increase in import prices.



Investors feeling uncertain about next week's Federal Reserve meeting grew even more uneasy after the Labor Department reported import prices rose a larger than expected 0.8% in August. That gain, which raised concerns that the Fed might resume its string of interest rate hikes after pausing in August, canceled out any good feeling the market had about the retail sales report.



The Commerce Department said sales rose 0.2% last month, versus expectations of a decline. The modest increase in retail sales followed a 1.4% rise in July.



Blue chips came under pressure however after UBS, the investment bank, lowered its rating on GE and Boeing Co. UBS cut its rating on GE to "netural" from "buy" and reduced its call on Boeing to "reduce" from "neutral."

 

Half hr down, next half hr up, next half down again next half up again, seow seow yehh....again and again, anyway it is up a little each time.

 

Dow ....

 

US markets opened down .......

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MARKET SNAPSHOT

NEW YORK (MarketWatch) -- U.S. stocks were set up for modest declines at Thursday's open, as a surprise rise in import prices, as well as downgrades of blue chip industrial giants General Electric and Boeing, offset solid results from Bear Stearns and an unexpected rise in retail sales.

Meanwhile, a more optimistic outlook on the global economy may help stem the weakness.

 

Economic data (below) to be out tonight will have huge impact on wall street. Fed is watching them closely for their 20th meeting. Standby for fly or dive in US markets later.

8:30am 8:30am 8:30am 8:30am 8:30am 10 am 4:30pm

Jobless claims Export prices Import prices oil Retail sales Retail sales autos Biz Inventories Money supply

 

NEW YORK (CNNMoney.com) -- Stocks rallied Wednesday, closing higher for the fourth session in a row, with all three major market gauges carving out four-month highs, thanks to a broad-based advance.

The Nasdaq composite (up 11.85 to 2,227.67, Charts) added around 0.5 percent, closing at its highest point since May 16.

 

Likely sti more red then green liao for dow end of d day predicting -ve

 

At 12.23 past mid nite local time , afternoon in US, DOW blue line start to sliding oredi, it climb fm 10:30 to 12:30 & it's fall again liao..