Friday, February 1, 2008

Market Lunacy!! ITB, XHB, UYG, UWM

Double digit intra-day gains in housing and financials:

Home Construction (ITB) +12.96%
Ultra Financials (UYG) +11.22
Homies (XHB) +10.00%

Next up to bat with a big-ass intra-day gain today:

Russell 2000 (UWM) +8.45%


All in all this market rally was totally nuts! Was it window dressing? The Plunge Protection Team? Fed pumping cash?

Tomorrow's job number and the weight of GOOG's miss will have an interesting impact. Will buyers sell and capture gains of the week?

Tuesday, January 29, 2008

Waiting for Bernanke

Low volume, low excitment day...but financials UYG (+3.07%) and housing ITB (+4.73%) continued rising before tomorrow's Fed announcement. Both are up over 20% in the past 5 days! Anything less than an expected 50bp cut tomorrow will be unacceptable to the market. I expect there to be profit taking in both of these either way.

YHOO missed after the close and gives a weak 2008 forecast Price down 10% after hours. GOOG reports Thursday after the close. Nasdaq downward pressure continues.

Monday, January 28, 2008

Financials and Housing Meltup Continues

Despite bad economic news the pre-Fed melt-up of the financial and housing ETF's continued.
The strength started early and built all day. Wednesday should be interesting!

Name Symbol % Chg Intra-
day %
SPDR S&P HOMEBUILDERS XHB 8.12% 7.3%
PROSHARES TRUST ULTRA FINANCIAL UYG 5.85% 6.2%
SPDR S&P RETAIL ETF XRT 4.80% 4.0%
KBW BANK ETF KBE 4.58% 4.2%
PROSHARES TRUST ULTRA RUSSELL2000 UWM 4.21% 5.3%
KBW REGIONAL BANKING KRE 3.90% 3.7%
ISHARES TRUST DOW JONES U.S. REAL ESTATE IYR 3.71% 4.2%

Sunday, January 27, 2008

ETF Forecast for the Week of 1-28-08

General Commentary:
Next week the markets will get a heavy dose of economic data, a FOMC rate announcement and earnings from tech, consumer, energy and pharma sectors. Barring any new rogue traders surfacing or hedge fun implosions, the markets could see a rally on the back of strong Fed action. It will be a high-wire act all week and markets could go either way (data dependent). Most likely the expected 50bp cut and positive data will spark a market rally. Bottomline: THIS WILL BE AN OPPORTUNE TIME TO GET SHORT.


Major Major Indexes:

The Fed is expected to cut rates by 50bp on Wednesday. This will act as a catalyst to bank shares. This should be positive for the DOW and S&P 500. Earnings from Google, Amazon and Yahoo! will weigh on the Nasdaq. If Google reports strong numbers and says positive things about the future, I expect the Nazz to rally. Unfortunately Amazon will probably offer a weak 2008 forecast, as well as Yahoo! Last week the Nazz was the only major index to drop, so perhaps its due for a bounce this week with a Google and Fed catalyst. My call: DIA, SPY, IWM, QQQQ will end the week in positive territory, with the S&P 500 gaining the most due to bank's rallying strong off the Fed decision. If the Fed fails to cut by 50 bp, then all indexes will get clobbered hard.



YTD % 1W %
Dow 30 DIA -7.8% 1.3%
S&P 500 SPY -9.0% 0.7%
Russell 2000 IWM -9.8% 1.9%
Nasdaq 100 QQQQ -14.1% -3.0%


Market Sectors:
Banks and housing popped on the 75 basis point rate cut last week. I expect the same to happen this week, but to a lesser extent since everyone is expecting the 50bp cut.
My call: Buy XLF, UYG, KRE, KBE, XHB. All will gain this week on Fed's rate cut. This area of the market remains highly speculative and could easily swing negative with another "shoe dropping". Be prepared to go short with SKF.

Sector

YTD % 1W %
Gold Miners GDX 9.5% 4.3%
Transportation IYT -1.4% 7.1%
Home Builders XHB -2.4% 15.2%
REITs IYR -2.9% 8.1%
Retail RTH -3.4% 2.8%
Regional Banks KRE -3.9% 12.0%
Large Banks KBE -2.3% 11.3%
Biotech IBB -5.1% -5.1%
Consumer Cyclicals XLY -5.6% 4.5%
Financials XLF -6.0% 6.6%
HealthCare XLV -6.6% -4.8%
Consumer Staples XLP -7.3% -1.7%
Pharmaceutical PPH -7.7% -5.6%
Basic Materials XLB -7.8% 2.9%
Agribusiness MOO -8.1% 5.6%
Metals & Mining XME -8.6% 7.4%
Industrials XLI -8.6% 3.2%
Utilities XLU -9.8% -4.6%
Energy XLE -13.4% -0.3%
Oil Services OIH -13.5% 1.2%
Steel SLX -13.6% 1.7%
Semiconductor SMH -13.7% 0.4%
Technology XLK -14.3% -1.1%

Commodities and Metals
Gold continues to be strong, ending the week over $900/oz. GLD was up 3.3% on the week. Gold will likely continue its ascent to $1,000 albeit on a rocky path. Oil dipped briefly to $86.99 last week before ending up at $90. 52% of traders expect oil to continue to fall into the mid $80's before rallying later in the spring. My call: buy DUG on falling oil prices.



YTD % 1W %
Silver SLV 10.9% 1.7%
Agriculture DBA 10.3% -0.5%
Gold GLD 9.5% 3.3%
Natural Gas UNG 6.7% 0.7%
Oil USO -5.1% 0.5%

Global and Emerging Markets
With the "decoupling" theory going out the window, most emerging markets took a dump last week. People are reducing risk and exposure to these highly speculative markets. If the U.S. catches a cold, these will catch the FLU! My call: Short FXI via FXP.



YTD % 1W %
Mexico EWW -7.0% 2.8%
Canada EWC -7.7% 3.9%
Taiwan EWT -8.5% -4.4%
Hong Kong EWH -8.6% 0.5%
Brazil EWZ -8.7% 4.0%
Singapore EWS -9.1% 2.6%
Europe, Asia, Far East EFA -9.9% -1.4%
Russia RSX -11.2% -5.0%
Emerging Markets EEM -11.3% -1.5%
China FXI -12.7% -5.2%
India INP -15.4% -5.1%
Australia EWA -7.0% 2.7%

UltraShort/Long
Without a doubt the best play of the year so far has been shorting everything and anything! The general consensus now for trading in a bear market is to SELL ALL RALLIES. If you want to get long on these bounces be prepared to exit quickly and do not hold overnight. Real Estate and Financials will get big bounces on Fed moves...but will also surrender to the "other shoe dropping". My sense is that we have not seen a bottom yet, there is still way too much risk in the system with CDS exposure to the banks.



YTD % 1W %
Nasdaq 100 Ultrashort QID 34.6% 6.2%
Oil Services Ultrashort DUG 29.7% 1.3%
Russell 2000 Ultrashort TWM 22.6% -4.4%
S&P 500 Midcap MZZ 22.2% -4.8%
China FTSE 25 Ultrashort FXP 20.6% 6.6%
S&P 500 Ultrashort SDS 20.2% -1.6%
DOW 30 Ultrashort DXD 16.9% -2.6%
Financials Ultrashort SKF 10.1% -13.4%
Real Estate Ultrashort SRS 0.8% -19.5%

ETF Leaderboard - Week Ending 1-25-08

What a wild week it was!

Massive intra-day reversals, a surprise massive 75bp Fed rate cut, "$6oo bucks (or more) from the Gov't for you and me, a "rogue trader" loses $7.9 billion, worst decline in home prices since the Great Depression!!

Hold onto your hats, the coming week should be even more exciting. The highlight of the week comes Wednesday when the FOMC announces whether it will cut an expected 50bp or not. There are also major market moving economic datapoints, the biggest coming Friday with the jobs number. Also on tap, earnings report from tech, drugs and consumer staples companies.
  • Monday - New home sales, VZ, MCD, AXP
  • Tuesday - Durable Goods Orders, Consumer Confidence, YHOO, EMC
  • Wednesday - ADP employment, GDP, EIA Petro Report, FOMC Announcement, AMZN
  • Thursday - Personal Income and Outlays, Jobless Claims, GOOG, PG
  • Friday - Jobs number, ISM Mfg Index, XOM, CVX
ETF Leaderboard - YTD % Leaders
Name Symbol YTD %
ULTRASHORT QQQ QID 34.6%
ULTRASHORT OIL & GAS DUG 29.7%
ULTRASHORT MSCI EMERGING MARKETS EEV 23.2%
ULTRASHORT RUSSELL2000 PROSHARES TWM 22.6%
ULTRASHORT MIDCAP400 PROSHARES MZZ 22.2%
ULTRASHORT FTSE/XINHUA CHINA 25 ETF FXP 20.6%
ULTRASHORT S&P500 PROSHARES SDS 20.2%
ULTRASHORT DOW30 PROSHARES DXD 16.9%
ISHARES SILVER TRUST SLV 10.9%
POWERSHARES DB AGRICULTURE FUND DBA 10.3%
ULTRASHORT FINANCIALS PROSHARES SKF 10.1%
MARKET VECTORS GOLD MINERS GDX 10.0%

Week's Biggest ETF Gainers
Name Symbol 1W %
ULTRA FINANCIAL PROSHARES UYG 15.3%
SPDR S&P HOMEBUILDERS XHB 15.2%
KBW REGIONAL BANKING KRE 12.0%
KBW BANK KBE 11.3%
REGIONAL HOLDRS TRUST RKH 10.3%
COHEN & STEERS REALTY MAJORS INDEX FUND ICF 9.0%
DOW JONES U.S. REAL ESTATE INDEX FUND IYR 8.1%
SPDR S&P METALS & MINING ETF XME 7.4%
DOW JONES U.S. FINANCIAL SECTOR INDEX FUND IYF 7.3%
DOW JONES TRANSPORTATION AVERAGE INDEX FUND IYT 7.1%
FINANCIAL SELECT SECTOR SPDR FUND XLF 6.6%
ULTRASHORT FTSE/XINHUA CHINA 25 ETF FXP 6.6%
ULTRASHORT QQQ PROSHARES QID 6.2%
DOW JONES BROKER US DEALERS INDEX FUND IAI 6.0%
MARKET VECTORS-AGRIBUSINESS ETF MOO 5.6%

Week's Biggest ETF Losers

Name Symbol 1W %
ULTRASHORT REAL ESTATE SRS -19.5%
ULTRASHORT FINANCIALS SKF -13.4%
ISHARES TRUST S&P 500 GROWTH INDEX FUND IVW -12.8%
ISHARES MSCI GERMANY INDEX FUND EWG -6.9%
PROSHARES TRUST ULTRA QQQ PROSHARES QLD -6.1%
MERRILL LYNCH & CO. INC. PHARMACEUTICAL HOLDRS PPH -5.6%
ISHARES TRUST FTSE/XINHUA CHINA 25 INDEX FUND FXI -5.2%
IPATH MSCI INDIA TOTAL RETURN INDEX ETN INP -5.1%

Friday (1-25-08) Biggest Intra-day % Reversals
Name Symbol Intra-
day%
ULTRASHORT FTSE/XINHUA CHINA 25 ETF FXP 9.2%
ULTRASHORT QQQ PROSHARES QID 9.0%
ULTRASHORT OIL & GAS PROSHARES DUG 7.5%
ULTRASHORT FINANCIALS PROSHARES SKF 7.0%
ULTRASHORT MSCI EMERGING MARKETS EEV 7.0%
ULTRASHORT S&P500 PROSHARES SDS 5.3%
ULTRASHORT RUSSELL2000 PROSHARES TWM 4.7%
ULTRASHORT REAL ESTATE PROSHARES SRS 4.6%
ULTRASHORT DOW30 PROSHARES DXD 4.2%
ULTRASHORT MIDCAP400 PROSHARES MZZ 3.6%

Tuesday, January 22, 2008

Market Meltdown? Make Money on Reversals!

Holy crap this market took a U-turn today! If you played it right, you could have made HUGE money!

Take a look at these reversal gains (open to close % change)!!
Name Symbol Volume % Chg Intraday
% Chg
PROSHARES TRUST ULTRA FINANCIAL UYG 2,782,062 5.42 19.70%
ISHARES TRUST COHEN & STEERS REALTY MAJORS ICF 2,463,381 2.65 18.40%
POWERSHARES GOLDEN DRAGON HALTER USX CHINA PGJ 2,168,811 -6.25 18.36%
ISHARES TRUST DOW JONES ENERGY SECTOR IYE 827,040 -2.72 17.13%
MERRILL LYNCH & CO INC. REGIONAL HOLDRS RKH 2,530,100 3.23 13.88%
POWERSHARES TRUST WILDERHILL CLEAN ENERGY PBW 3,128,071 -1.18 13.57%
ISHARES TRUST S&P MIDCAP 400 IJH 1,382,759 -0.5 13.03%
CLAYMORE BNY BRIC ETF EEB 1,110,121 -3.07 12.93%
ISHARES TRUST RUSSELL 1000 VALUE IWD 4,501,512 -0.18 12.91%
ISHARES DOW JONES US HOME CONSTRUCTION ITB 1,806,114 6.31 12.26%
ISHARES DOW JONES TRANSPORTATION AVERAGE IYT 1,759,398 -0.04 11.70%
SPDR S&P HOMEBUILDERS XHB 11,988,714 7.85 11.48%
TECHNOLOGY SELECT SECTOR SPDR XLK 8,274,144 -1.86 10.59%

Friday, January 18, 2008

ETF Leaderboard - Week Ending 1-18-08

YTD % gain leaders as of the week ended 1-18-08. List only includes the most liquid ETF's (volume> 500,000 shares/day).

Its truly a short seller's market so far in 2008. There are only a handful of non-short or ultrashort ETF's posting positive gains. Had you listened to The Fly and positioned yourself short in December 2007, you could have banked some coin!

Name Symbol YTD % Chg
PROSHARES ULTRASHORT FINANCIALS SKF 29.8%
PROSHARES ULTRASHORT MIDCAP400 MZZ 28.4%
PROSHARES ULTRASHORT RUSSELL2000 TWM 28.2%
PROSHARES ULTRASHORT OIL & GAS DUG 28.0%
PROSHARES ULTRASHORT QQQ QID 26.7%
PROSHARES ULTRASHORT BASIC MATERIALS SMN 25.5%
PROSHARES ULTRASHORT REAL ESTATE SRS 25.3%
PROSHARES ULTRASHORT S&P500 SDS 22.2%
PROSHARES ULTRASHORT DOW30 DXD 20.0%
PROSHARES ULTRASHORT MSCI EMERGING MARKETS EEV 20.0%
PROSHARES ULTRASHORT FTSE/XINHUA CHINA 25
FXP 13.2%
POWERSHARES DB AGRICULTURE FUND DBA 10.9%
PROSHARES SHORT S&P500 PROSHARES SH 10.8%
PROSHARES SHORT DOW30 PROSHARES DOG 9.7%
ISHARES SILVER TRUST SLV 9.1%
STREETTRACKS GOLD TRUST GLD 6.0%
UNITED STATES NATURAL GAS FUND UNG 5.9%
MARKET VECTORS VECTORS GOLD MINERS GDX 5.5%
ISHARES TRUST LEHMAN 7-10 YEAR TREASURY BOND IEF 3.0%
ISHARES TRUST LEHMAN 20+ YEAR TREASURY BOND TLT 2.6%
ISHARES TRUST LEHMAN TIPS BOND TIP 2.6%
ISHARES MSCI MALAYSIA EWM 2.3%
ISHARES TRUST LEHMAN AGGREGATE BOND AGG 2.1%
MERRILL LYNCH & CO. BIOTECH HOLDRS BBH 1.6%
ISHARES TRUST LEHMAN 1-3 YEAR TREASURY BOND SHY 1.3%

ETF Trading Ideas for the Week Ahead:
1. Continued weakness in oil prices should see DUG continue to rise at least through March.

2. An oversold rally will ensue at some point (its getting close), which sectors will catch a bid? Try the Nasdaq ultra-long (QLD) or for the daring, try the financials ultra-long (UYG)

3. When the Fed comes in with a big rate cut (some say 75 bp or more), expect a big rally in the banks. KRE, KCE could bounce strongly. Look at housing too XHB.

4. If the govt's fiscal stimulus takes shape ($800 cash or so) expect the beaten down retailers to pop. Take a look at RTH or XRT.

5. Here's an interesting observation: While DBA, the agricultural commodities ETF is up nearly 10% YTD, the agriculture companies ETF (MOO) is down -12.9%. How do you reconcile that? Either DBA has to come down or MOO has to go up. MOO's components got clobbered this week. DE, MOS, MON, BG, POT all losing significant percentages. I have a feeling these stocks will rise later in 2008 as worldwide ag inflation continues. Keep an eye on MOO!

Friday, January 4, 2008

2007 ETF Performance Winners

The best performance for ETFs in 2007 reflects the sectors that were strong during the year.

What will 2008 bring?

Some sectors will continue to rally and some will fall away. More on this later in another post...

Symbol Description YTD
% Chg
INP India 86.4%
SLX Steel 83.3%
EWZ Brazin 72.3%
GXC China 67.8%
EEB BRIC countries 66.8%
PGJ China 63.3%
SRS Ultrashort Real Estate 61.3%
PBW Clean Energy 59.9%
DIG Ultra Oil & Gas 54.1%
FXI China 52.9%
OIL Oil 47.5%
USO Oil 46.8%
ILF Latin America 46.5%
SKF Ultrashort Financials 45.6%
XME Metals and Mining 40.8%
EWM Malaysia 39.9%
MOO Agribusiness 39.4%
EWH Hong Kong 37.1%
OIH Oil Services 35.3%
XLE Energy Sector 35.3%
VWO Emerging Markets 34.8%
DBA Agriculture Commodities 31.9%
EWG Gernamy 31.7%
EEM Emerging Markets 31.6%
RSX Russia 31.1%
EWY Korea 31.0%
GLD Gold 30.5%
DBC Commodity fund 28.4%
PWJ Dynamic Mid Cap Growth 27.5%
EWC Canada 26.9%
EWS Singapore 23.1%
EWA Australia 22.6%
QLD Ultra QQQQ 22.4%
UTH Utilities 20.0%

Thursday, December 20, 2007

ETFs Volume >1M and Gainers/Losers

Sorted by price % chg

Fund Name Ticker Volume Vol
3M Avg
Vol
% Chg
Price
% Chg
Ultra QQQ ProShares QLD 5,126,771 3,589,880 43% 4.14%
PowerShares QQQ QQQQ 167,342,283 160,646,000 4% 2.04%
Materials Select Sector SPDR XLB 5,563,031 9,055,540 -39% 1.84%
iShares Russell 2000 Growth Index IWO 4,281,100 4,780,570 -10% 1.82%
Oil Services HOLDRs OIH 4,579,700 7,546,420 -39% 1.81%
iShares Russell 2000 Value Index IWN 3,722,339 2,770,080 34% 1.66%
iShares Russell 2000 Index IWM 121,971,161 88,400,900 38% 1.60%
MidCap SPDRs MDY 4,825,932 5,400,110 -11% 1.50%
Technology Select Sector SPDR XLK 1,928,017 3,964,460 -51% 1.44%
Semiconductor HOLDRs SMH 6,422,400 9,082,420 -29% 1.42%
iShares S&P SmallCap 600 Index IJR 1,315,031 1,939,450 -32% 1.42%
iShares FTSE/Xinhua China 25 Index FXI 5,212,599 6,210,930 -16% 1.30%
Energy Select Sector SPDR XLE 13,011,200 21,034,600 -38% 1.27%
iShares Nasdaq Biotechnology IBB 1,220,169 1,288,440 -5% 1.19%
UltraShort Financials ProShares SKF 2,360,157 1,939,690 22% 1.10%
iShares Russell 1000 Growth Index IWF 4,604,015 3,258,470 41% 1.08%
iShares MSCI Brazil Index EWZ 14,387,384 14,733,400 -2% 1.05%
iShares MSCI Mexico Index EWW 2,962,500 3,693,230 -20% 1.02%
iShares Russell 1000 Index IWB 1,446,742 645,806 124% 1.00%
Ultra S&P500 ProShares SSO 2,126,451 1,671,910 27% 0.97%
iShares Dow Jones US Broker-Dealers IAI 1,019,200 1,270,850 -20% 0.90%
Industrial Select Sector SPDR XLI 3,717,476 4,936,880 -25% 0.83%
iShares S&P 500 Growth Index IVW 1,257,287 806,594 56% 0.78%
iShares MSCI EAFE Index EFA 13,827,569 9,292,350 49% 0.71%
iShares S&P 500 Index IVV 2,795,150 2,805,200 0% 0.71%
SPDR S&P Retail XRT 3,508,600 3,023,110 16% 0.67%
iShares MSCI Hong Kong Index EWH 4,682,875 7,594,820 -38% 0.65%
iShares Russell 1000 Value Index IWD 4,933,557 1,994,760 147% 0.64%
SPDRs SPY 214,813,762 199,655,000 8% 0.63%
Health Care Select Sector SPDR XLV 2,094,560 2,116,370 -1% 0.59%
iShares MSCI Emerging Markets Index EEM 15,173,502 17,363,000 -13% 0.55%
iShares MSCI Singapore Index EWS 4,125,233 4,428,140 -7% 0.53%
Consumer Discretionary SPDR XLY 2,352,319 3,897,480 -40% 0.49%
iShares S&P 100 Index OEF 1,602,520 1,488,450 8% 0.45%
Utilities Select Sector SPDR XLU 4,282,956 5,073,330 -16% 0.44%
iShares MSCI Japan Index EWJ 12,597,857 17,834,600 -29% 0.38%
iShares Dow Jones US Real Estate IYR 6,199,127 6,249,770 -1% 0.38%
DIAMONDS Trust, Series 1 DIA 12,707,857 14,685,800 -13% 0.33%
iShares MSCI Malaysia Index EWM 1,905,500 2,832,780 -33% 0.25%
iShares MSCI Australia Index EWA 3,205,500 2,470,770 30% 0.11%
iShares Lehman 1-3 Year Treasury Bond SHY 1,304,600 946,198 38% 0.07%
SPDR S&P Homebuilders XHB 4,927,820 4,693,650 5% 0.00%
iShares Cohen & Steers Realty Majors ICF 1,192,445 990,875 20% 0.00%
United States Oil USO 1,539,900 3,208,600 -52% -0.07%
Retail HOLDRs RTH 3,659,000 5,353,560 -32% -0.11%
iShares Lehman 20+ Year Treas Bond TLT 1,659,361 1,726,230 -4% -0.21%
Pharmaceutical HOLDRs PPH 1,065,400 720,111 48% -0.40%
Market Vectors Gold Miners ETF GDX 1,279,606 2,177,700 -41% -0.42%
Consumer Staples Select Sector SPDR XLP 1,720,704 3,120,770 -45% -0.45%
KBW Regional Banking ETF KRE 1,808,101 1,818,600 -1% -0.48%
Regional Bank HOLDRs RKH 1,021,100 905,618 13% -0.48%
KBW Bank ETF KBE 1,722,750 1,522,840 13% -0.54%
Financial Select Sector SPDR XLF 98,255,288 81,129,500 21% -0.72%
streetTRACKS Gold Shares GLD 6,345,630 8,049,930 -21% -0.72%
UltraShort Dow30 ProShares DXD 1,588,499 3,168,610 -50% -0.95%
iShares MSCI South Korea Index EWY 3,206,578 2,616,490 23% -1.23%
iShares MSCI Taiwan Index EWT 5,988,951 8,259,080 -27% -1.29%
UltraShort S&P500 ProShares SDS 11,582,538 16,820,900 -31% -1.63%
UltraShort Russell2000 ProShares TWM 5,344,315 4,771,880 12% -3.18%
UltraShort MidCap400 ProShares MZZ 1,012,400 646,620 57% -3.43%
UltraShort QQQ ProShares QID 16,930,599 29,919,200 -43% -4.16%

Market Summary 12-20-07

Index Last Chg % Chg
DJ Industrials 13245.64 38.37 0.29%
Nasdaq Comp 2640.86 39.85 1.53%
S&P 500 1460.12 7.12 0.49%
DJ Wilshire 5K 14735.57 90.93 0.62%
Russell 2000 767.54 11.41 1.51%
Nasdaq 100 2069.68 38.68 1.90%

Issues NYSE Nasdaq Amex
Advancing 1,846 1,899 681
Declining 1,446 1,119 544
Unchanged 86 192 111
Total 3,378 3,143 1,336
Issues at


New 52 Wk High 45 42 19
New 52 Wk Low 320 238 90
Share Volume


Total 1,356,823,280 1,969,412,354 36,750,038
Advancing 741,783,900 1,452,054,903 18,115,100
Declining 588,871,280 465,913,029 15,425,338
Unchanged 26,168,100 51,444,422 3,209,600

Futures Last Chg
Crude Oil 91.4 0.34
Natural Gas, Mar 7.273 0
Gold, Feb 804.6 1.4

From Briefing.com:
Moving the Market Sector Watch
Oracle, Nike and Accenture top earnings expectations

FedEx reports earnings that beat expectations, but issues future Q3 earnings guidance below estimates

Bear Stearns significantly misses earnings expectations

Bond insurer MBIA says it has $30.6 bln in CDO and Mortgage exposure
Strong: fertilizer & agriculture chemicals; IT consulting services; agriculture products; footwear; semiconductors; systems software; constructions & farm machinery; aluminum; electronic equipment; office electronics

Weak: home furnishings; real estate management & development; industrial REITs; consumer finance; general merchandise stores; education services; thrifts & mortgages; property & casualty insurance; residential REITs; dept. stores

It was another roller coaster day of trading on Thursday. The S&P and Dow closed with modest gains after spending much of the day in the red, while the Nasdaq finished the day significantly higher, buoyed by a strong earnings report from Oracle (ORC 22.10, +1.34). The financial sector prevented the market from making further gains,though, as bond insurers once again came under scrutiny.

Shares of bond insurer MBIA (MBI 20.00, -7.02) plummeted 26% after the company said it has $30.6 billion in collateralized debt obligation exposure, much larger than many analysts previously thought. Yesterday, Standard & Poor's affirmed MBIA's AAA credit rating, and today said the company's CDO exposure was factored into that decision.

S&P's announcement, though, did little to help the stock, as some investors felt blindsided that the exposure was not previously disclosed. Adding to the company's woes, Fitch Ratings put MBIA on Rating Watch Negative because of the CDO exposure.

A number of companies reported earnings on Thursday, most of them better than expected.

Oracle played a pivotal role in the Nasdaq's outperformance after reporting stronger than expected earnings. Oracle earnings came in at $0.31 per share, topping estimates by $0.04.

Meanwhile, Nike (NKE 66.01, +2.21), Herman Miller (MLHR 32.05, +3.63), and Accenture (ACN 37.24, +2.28) all came in ahead of estimates.

It was just about a month ago that FedEx (FDX 93.63, -1.00) warned of an earnings shortfall for its second quarter and fiscal year. So, although FedEx beat the second quarter consensus estimate of $1.50 by four cents, the qualifier should be added that it beat the lowered consensus estimate. Also, the company issued futures earnings guidance below expectations, which helped send its shares lower.

Bear Stearns (BSC 91.42, +0.82) reported a huge loss of $6.90 per share due to mortgage-related losses, much higher than the $1.79 per share loss most analysts expected. It was Bear's first quarterly loss ever, according to reports. After some choppy trading, the market shrugged off the negative report, sending shares of the company higher.

Of the nine sectors that traded high, tech (+1.6%) provided leadership, thanks to strength in Oracle and Apple (AAPL 187.21, +4.09). Only the financial sector (-0.7%) finished lower.

There were several economic reports, although none had much of an impact on the stock market.

Third quarter real GDP was unchanged at a 4.9% annual growth rate. Core PCE rose 2.0% (consensus +1.8%) quarter over quarter and the GDP Price Index rose 1.0% (consensus +0.9%). The report was just the final revision, so it did not have much of an impact on the market.

The weekly initial jobless claims for the week ended Dec. 15 rose to 346,000 from 335,000 the week before. The reading is not high enough to signal significant weakness in the labor market, just a modest worsening.

Leading Indicators dropped by 0.4%, slightly more than the expectation of a 0.3% drop. This report typically garners little market interest, as many of the indicators that make up the report have been previously released.

Lastly, the regional Fed survey for December manufacturing was a very disappointing -5.7. A reading below zero suggests a contraction in manufacturing. The New York survey released earlier this week had a more optimistic reading of 10.3. These are just regional surveys, and not too much emphasis should be placed on them, but a poor reading here raises red flags.