U.S. Market Update
DJIA -47 Nasdaq -6.50 S&P 500 -1.35
The New Year's equity rally appeared to stall out this morning as the major US equity indices begin the new week under water, although they headed back above the 9000 region by mid morning. Although the November Construction Spending data was better than expected, continuing strength in crude, expectations for another round of bad sales results from the auto industry later today and a fresh round of lowered corporate guidance in select companies gave investors something to think about. Front-month crude is in slight positive territory as various OPEC officials reiterate that the organization is serious about enforcing its latest round of production cuts; yet some disagreement remains as far as whether an extraordinary meeting is necessary before the scheduled March meeting. US bond yields moved off their best levels during the New York morning. Bonds were throughout the European morning following the Barron's report of a potential bond market bubble.
Apple CEO Steve Jobs had the cure to AAPL's fickle stock behavior after providing a response to questions regarding his health. Jobs disclosed that his widely noted weight loss was due to a hormone imbalance, and that he is already undergoing treatment for the condition. Jobs said he will remain CEO during his recovery; AAPL is up more than 4% on the news. Shares of Amazon popped nearly 2% before the open on an upgrade at JP Morgan, although cautious comments on the Internet/e-commerce sector from Merrill erased these gains, sending AMZN and EBAY well into negative territory. Both have come off their morning lows. Telecom giants VZ-4% and T-5% are both down after stale to negative pre-market analyst notes. More midcap names cut or offered disappointing guidance before the open, including Navistar and Varian Semi. The latter name fell approx 6% before the open; NAV is back into positive territory, while VSEA has risen off its worst levels.
The USD retraced its earlier gains as the New York morning wore on, but maintained gains against the EUR and CHF pairs. The EUR/USD pair had tested the 1.3555 level but drifted back above 1.36 ahead of the US Construction data and the US Treasury announcement regarding the issuance size later this week for the three- and ten-year maturities. The USD/CHF firmed during the early European morning. Dealers had cited several factors behind the dollar's advance during the session with possibilities that President-Elect Obama would initiate a big stimulus plan to help move US out of recession once he is in office. USD/CAD is moving below the 1.20 handle while the AUD/USD probed the mid-0.71 neighborhood.
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