Stock Market Report - 06/10/09

Wednesday June 10, 2009
Navivest

The stock market started the day higher, but the gains quickly faded within the first thirty minutes of trading, pushing the stocks down into negative territory and the major indices spent the entire day below breakeven after 11 am.

Disappointing results from a government auction of $19 billion in ten-year notes was a major source of concern. The yield on the notes came in at a higher than expected 3.99%, stocking inflation fears, which if realized, could put a damper on economic growth. Continued rising yields on treasury notes also indicate that demand for them is not as robust as the government would hope.

The bid to cover ratio for the auction, a measure of demand, was 2.62. It was 2.47 for the last ten-year note auction, which was just last month.

The Dow Jones Industrial Average was off 24.04 points for a loss of 0.3% to close at 8,739.02, NASDAQ lost 7.05 points or 0.4% to close at 1,853.08 and the S&P 500 finished the day down 3.28 points or 0.3%, to close at 939.15.

The turn for the worse in early trading was a disappointing surprise, as stock market futures were indicating a very strong upside bias. Before 8:30, the Dow futures were indicating we would open up about a hundred points, with NASDAQ and S&P futures indicating gains of 15 and 12 points respectively in those indices.

On the positive side, stocks did close off the worst levels of the day. The Dow hit an intra-day low of 8,639.95, while the NASDAQ and S&P 500 saw intra-day lows of 1,827.61 and 927.97 respectively.

In corporate news, a day after the Supreme Court refused to hear a lawsuit that was being pushed by a group of Indiana pension funds that hold Chrysler bonds, the company officially entered into an alliance with Italian automaker Fiat, that will see Fiat take an initial stake of 20% in Chrysler. This could be raised to 35%, upon attainment of mandated fuel efficiency goals. Fiat’s CEO Sergio Marchionne was named CEO of Chrysler.

A new company called Chrysler Group LLC was formed, with the old Chrysler selling most of its assets to the new company. Legacy liability costs were not transferred over to the new company.

In economic news, the Commerce Department reported that the nation’s trade deficit widened to $29.2 billion in April, from a revised deficit of $28.5 billion in March. Economists had been forecasting a rise to $29 billion.

June 10, 2009 | Filed Under Company News, Stock Market, Stocks | Leave a Comment 

Stock Market Report - 05/29/09

Friday May 29, 2009
Navivest

A late rally in the last half hour of trading sent stocks rallying today, helping the major indices to also close higher for the month. The Dow Jones Industrial closed at 8,500.33, up 96.53 points for a gain of 1.15%, NASDAQ was up 22.54 points to close at 1,774.33, for a gain of 1.29% and the S&P 500 finished the session at 919.14, up 12.31 points, a gain of 1.36%.

For the month, the Dow Jones Industrial Average climbed 4.1%, the NASDAQ finished the month with a gain of 3.3% and the broader based S&P 500 index rallied 5.3%.

Even though the market did not react much initially, we got positive economic news today, that showed the nation’s GDP contracted 5.7% in the first three months of this year, which while higher than the forecasts of 5.5%, was a slower rate of decline that the 6.1% decline that was being forecasted as recently as April.

Additionally, the Reuters/University of Michigan consumer sentiment was released, which showed that consumer sentiment had risen to 68.7, the best showing since September and higher than forecasts of 68.0.

Media reports that General Motors (GM) was close to filing for bankruptcy, was a drag on the markets. The company will reportedly file on Monday June 1.

This even as the company’s largest union, the UAW, announced that the majority of its members had voted to amend the GM-UAW 2007 national labor agreement that it has with the company. The agreement covers approximately 54,000 hourly employees located in 46 of GM’s U.S. facilities

Gold related shares were strong performers on the day, with AngloGold Ashanti (AU) up $1.48, Newmont Mining (NEM) was up $1.52 to $48.87 and Barrick Gold (ABX) was up $0.90 to $38.08.

Steel stocks also put in a good showing, with U.S Steel up $1.28 to $34.08, Nucor (NUE) up $1.09 to $43.91 and ADR’s of Korea’s Posco (PKX) climbing $1.83 to $83.09.

Helping the Dow along was Coca Cola (KO), which rose a $2.26, for a 4.82% rise, which is a phenomenal one-day gain for the stock. On the heels of KO, was IBM (IBM), which was up $1.59 to $106.28, for a gain of 1.52%.

May 31, 2009 | Filed Under Company News, Stock Market, Stocks | Leave a Comment