Posted 12/19/2008
The week wound down to an unremarkable finish, with indexes giving up early gains to end mixed in heavy options-expiration trading.
The Nasdaq ended 0.8% higher and the S&P 500 edged up 0.3%. The NYSE composite was a fraction into the red. The Dow, slipping 0.3% on a quadruple-witching boost from options expirations, logged its third distribution day since the Dec. 2 follow-through.
Still, three of the four major indexes gained ground for the week. The NYSE composite added 1.3% and the Nasdaq 1.5%. The S&P 500 edged 0.9% higher, while the Dow slipped 0.6%.
For the NYSE, Nasdaq and S&P 500 it was the first two-week advance since September. The Dow hasn't managed a two-week gain since May.
In addition, all the major indexes eased in late trading, losing the week's battle to hold above their 50-day moving averages.
No significant economic news is scheduled for release Monday. But Tuesday's releases will include new and existing home sales, GDP data and the University of Michigan's revised Consumer Sentiment index numbers for December.
Drugstore chain Walgreen (WAG) and software maker Red Hat (RHT) are scheduled to report earnings Monday.
4:15 p.m. Update: Indexes Close Mixed After Volatile Session
BY JUAN CARLOS ARANCIBIA
A volatile session ended with mixed results Friday.
The Dow fell 0.4%, weighed down mostly by oil components Exxon Mobil (XOM) and Chevron (CVX), as crude continued sliding.
The NYSE composite edged down a fraction, while the S&P 500 rose 0.2% and the Nasdaq 0.8%, according to early figures.
Volume rose amid options expiration-related trading. The market heads into one of its quietest weeks, shortened by the Christmas holiday.
Automakers and auto-supplier stocks rose after the White House agreed to provide emergency loans to the Big Three.
3:15 p.m. Update: Indexes Hold Gains, But Settle To Lower End of Ranges
BY ALAN R. ELLIOTT
A back-and-forth session held to positive territory, as decliners led advancing issues by healthy margins. But the day's heavy-volume trading bypassed most leading stocks.
The Nasdaq composite held top honors, up 1.3%. The S&P 500 kept 0.9% in the black, while the Dow and NYSE composite clung to 0.4% gains.
Research in Motion (RIMM) and Oracle (ORCL) continued to be heavy upside players on the Nasdaq. Energy and international plays lagged on the NYSE. Small caps continued riding ahead of the mainstream, driving the S&P 600 up better than 2%.
Volume continued to settle toward more normal ranges, but remained 78% higher on the NYSE and up 23% on the Nasdaq.
Oil prices split in late trading. The expiring January contract shed $2.35 to settle at $33.87. The February contract climbed rose 69 cents to $42.36, leaving the front month contract down 8% for the week.
Aaron Rents (RNT) climbed 5%, breaking above a 26.68 buy point on a 13-week, cup-with-handle base. The rent-to-own chain announced Tuesday it would acquire Missouri-based Rosey Rentals, a franchisee operating 35 Aaron's stores in six states in the Southeast with annual revenue of about $45 million.
Quality Systems (QSII) cut losses for a 4% run, but volume was just a shade above average. The maker of health care practice and records management software has jumped 16% so far this week as it works to build the right side of a base.
On the downside, Italian oil & gas heavyweight Eni Spa (E) slipped 7% as oil prices sculpted out multiyear lows. Eni has been in a general uptrend since early October and is holding its own above support at its 10-week moving average.
2:15 p.m. Update: Stocks Rebound In Afternoon Trade
BY VINCENT MAO
The major stock indexes bounced back in afternoon trading Friday but remained off session highs.
The Nasdaq climbed 1.5%, the S&P 500 1.1%, while the Dow and NYSE composite rose 0.6% each.
Volume continued to track sharply higher, but the pace had slowed.
PetMed Express (PETS) rallied 6% and regained its 50-day moving average. The pet pharmacy operator may be forming a base.
Research In Motion (RIMM) rallied 9% in heavy trading. Despite hovering near two-year lows, the stock's Accumulation/Distribution Rating has improved to B from a worst-possible E in October.
On the downside, AeroVironment (AVAV) extended losses to 10% and is off more than 8% from its buy point. The unmanned aircraft systems maker cleared a 36.32 buy point from a base-on-base pattern Thursday.
Tractor Supply (TSCO) dropped 4% and sliced is 10-week and 40-week moving averages. The stock also triggered the 8% sell rule. It passed a 42.85 buy point from a double-bottom base Wednesday. William Blair & Co. warned that deflation may hurt the farming equipment retailer.
Crude oil dropped $1.90 to $34.32 a barrel. Energy stocks were mixed.
1:15 p.m. Update: Indexes Tinker With Mixed Territory; Small Caps Outperform
BY ALAN R. ELLIOTT
Indexes threw in the towel after an early surge spurred by news of a federal bailout for U.S. automakers.
The NYSE composite slipped briefly into the red, then managed a fractional gain. The Dow flattened. The S&P 500 held a 0.5% advance and the Nasdaq composite showed a 0.9% rise.
Financial issues dragged on the Nasdaq, with the exchange's financial index down 1.3%. Computer, telecom and insurance sectors still held better-than-1% gains. On the NYSE, the International 100 index lagged with a 1% decline, and technology stocks tracked close behind. Small caps ran well ahead of the curve, with the S&P 600 up 2%.
Volume eased from its early highs, but remained at extraordinary levels — particularly on the NYSE — because of options expiration trading.
Crude oil prices ground lower, down more than $1 after dipping to midsession lows below $34 a barrel. Gold held the bulk of its early losses, remaining down more than $22 to below $838 an ounce.
Flowers Foods (FLO) cooked up a 4% gain as it tried to notch its first weekly gain in December. Shares are still well below their 50- and 200-day moving averages in a consolidation begun in August.
Onyx Pharmaceuticals (ONXX) swung 5% higher in above-average volume. The biotech drug maker is in its fourth straight week of gains, has topped resistance at its 10-week line and appears ready to take a run at the 40-week level.
On the downside, advanced ceramic components maker Ceradyne (CRDN) gapped down and surrendered 20% after a downgrade from buy to hold from Stanford Research. The big-volume tumble punched the stock back below support at its 50-day line. It has been trying to build a floor to a consolidation begun in August.
12:15 p.m. Update: Indexes Retreat Near Session's Halftime
BY VINCENT MAO
Stocks pulled back sharply near the halftime of Friday's session. Most major indexes slipped back under their respective 50-day moving averages after regaining them earlier.
The Nasdaq climbed 1.4%, down from an intraday high of 2.6%. The S&P 500 rose 1%, Dow 0.6% and NYSE composite 0.4%.
Volume was again tracking vastly higher across the board due to quadruple expiration and the quarterly rebalancing of S&P indexes.
Tower Group (TWGP) tacked on 9% in heavy trading, its fourth straight advance. The insurance firm is nearing a potential 27.63 buy point from a cup base.
Gentiva Health Services (GTIV) gapped up and gained 3% in brisk trade. After a failed breakout earlier this month, the home health care firm is forming a new handle with a buy point at 28.36.
On the downside, Supertex (SUPX) gapped down and dropped 7% after cutting its sales outlook. The chipmaker now expects revenue in the range of $17 million to $18 million, down from a prior forecast of $21.3 million to $22.3 million. Advanced Micro Devices (AMD), Atmel (ATML), Atheros Communications (ATHR), MEMC Electronic Materials (WFR), Monolithic Power Systems (MPWR) and Xilinx (XLNX) have all slashed their earnings and/or sales guidances.
AeroVironment (AVAV) lost 4% in active trading, slipping below a 36.32 buy point cleared Thursday.
11:15 a.m. Update: Indexes Drive To Solid Gains With Options Expiration Support
BY ALAN R. ELLIOTT
Indexes swept higher in broad-based gains, with advancing issues leading by better than 4-to-1 on the NYSE and by a 3-to-1 margin on the Nasdaq.
The Nasdaq composite scored a 2.5% rise, with Oracle (ORCL), Research In Motion (RIMM) and Comcast (CMCSA) driving the Nasdaq 100.
The S&P 500 flashed a 2% advance, the Dow climbed 1.8% and the NYSE composite rode 1.5% higher.
On the NYSE, energy, financials and health care pulled ahead of other sectors.
NYSE volume erupted in quadruple witching action, up nearly 250%. Nasdaq volume soared 67% above Thursday's below-average volume.
Commodities traded generally mixed as crude futures hovered, holding near a 4-1/2 year low just below $36 a barrel. The dollar strengthened vs. the euro. Gold slumped more than $25 to below $836 an ounce.
S&P 400 component Highwood Properties (HIW) phoned in an 8% jump on more than double its average trading volume. The Southeast/Midwest commercial property REIT sports a best possible 99 EPS Rating from IBD. It appears set to end its second week above its 10-week moving average as it climbs up from a three-month consolidation.
California Water Services (CWT) launched into a 4% gain in heavy trade. The move began what would be a fourth straight day of gains for the multistate public and commercial water utility. Shares are up 14% so far this week, clearing new highs for the first time since 2006 and 8% above a 42.60 buy point on a rebound from the stock's 10-week moving average.
On the downside, heavy construction firm Fluor (FLR) slipped 7% in busy trading. The company, which has strong ties to refining and energy industry construction, has suffered from the fall in oil prices. Shares are down 6% so far for the week, hurting the stock's effort to build a right side to a six-month consolidation.
10:15 a.m. Update: Stocks Pare Gains After Higher Open
BY VINCENT MAO
Stocks charged out of the gate Friday after automakers received their long-awaited bailout, but the major indexes have already shaved a chunk of gains.
The Nasdaq climbed 1.3%, thanks to gains in a number of high-profile tech issues and chip stocks. The Dow rose 0.6% and the S&P 500 0.5%. The NYSE composite was mostly unchanged.
Volume was tracking vastly higher due to quadruple expiration of stock options, stock index options, stock index futures and single stock futures.
Provident Bankshares (PBKS) gapped up and skyrocketed 58% on news that it will be acquired by M & T Bank for $401 million in stock.
Research In Motion (RIMM) rose 5% in fast trade following a round of mixed analysts' actions. Cowen & Co. cut the BlackBerry maker to underperform from neutral, while Raymond James and UBS both cut the stock's price target. TD Bank Financial raised shares to Action List Buy from Buy.
On the downside, AECOM Technology (ACM) fell 3% as it slipped for a second session. That left the government contractor 5% past a 27.30 buy point from a cup-with-handle pattern.
January crude pared losses, but was still down 53 cents to $35.69 a barrel.
9:15 a.m. Update: Stocks Poised For Higher Start As Automakers Get Bailed Out
BY VINCENT MAO
Stock futures signaled a higher open Friday after the While House announced help for U.S. automakers.
Nasdaq futures rose 12 points vs. fair value, S&P 500 futures rallied 9 points and Dow futures gained 112 points.
General Motors (GM) and Chrysler will split $13.4 billion in loans to help them stave off bankruptcy. They'll split another $4 billion in February and must show "financial viability" by March.
GM shares rose 7% in the pre-market. Ford (F), which has said it doesn't need bailout money, rose 5%.
Standard & Poor's Ratings Services cut ratings on a slew of major U.S. and European banks, citing rising risks amid the worsening recession. The list of downgraded firms includes Bank of America (BAC), Barclays (BCS), Citigroup (C), Credit Suisse Group (CS), Deutsche Bank (DB), Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley (MS), Royal Bank of Scotland Group (RBS), UBS (UBS) and Wells Fargo (WFC).
S&P also lowered HSBC's (HBC) outlook to negative. The U.K. bank fell 3% in the pre-market.
On the upside, Oracle (ORCL) gained nearly 4% in the pre-open on its bright fiscal Q3 outlook. Amid a weak tech spending environment, the database software maker sees current quarter sales growing 8% to 11% vs. views of 8%. Earnings are pegged at 34 cents to 36 cents a share vs. views of 34 cents.
Intrepid Potash (IPI) cut its Q4 sales outlook, while fellow fertilizer maker Potash Corp. Of Saskatchewan (POT) cut its full-year profit guidance. Intrepid fell 14% in the pre-market, while Potash Corp. shed 3%.
Elsewhere, Panasonic offered to buy rival Sanyo for $9 billion.
Crude oil rebounded slightly after touching its lowest level in nearly five years. The expiring January contract fell $1.42 to $34.08 a barrel. Earlier, it hit $33.44, the lowest since February 2004.
Copyright 2000-2008 Investor's Business Daily, Inc
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