Market Summary

Wall Street tumbled on Friday, ending the week on a sharply lower note on fresh worries on the economy and the future of the banking industry now that Congress has approved the banking industry overhaul bill. It was a plunge after the 9.55 AM release of Consumer Sentiment for the month of June. The blue chips followed its 7 day win streak with 2 consecutive declines to close out the week. The DJIA fell 261.41, or 2.5 percent, to 10,097.90. The Standard & Poor’s 500 index lost31.60, or 2.9 percent, to 1,064.88, while the Nasdaq composite index declined 70.03, or 3.1 percent, to 2,179.05. Tech was hit hard by earnings from Google Inc (GOOG) after the bell on Thursday, while financials led the overall market lower headed up by blue chipper Bank of America Corp (BAC)

For the week, the blue chips lost 1 percent, the S&P 500 was red by 1.2 percent, and the Nasdaq is dropped 0.8 percent.It was the third loss in four weeks for the major averages.  It will be important to see some positive earnings statements this upcoming week as earnings season continues to shift the momentum. At least the oil spill has stopped!

Gold prices fell, however, losing more than 1% to retreat below $1,200 a troy ounce despite the drop in equities. Crude oil for August fell 61 cents, to $76.01 a barrel on the NYMEX. September will be the front month contract on Monday. The yield on the 10 year treasury tumbled 7 basis points to 2.93 points as investors fled to safety, sending prices higher.

Economic Rundown

Lower energy costs tugged down on the consumer price index in June, resulting in a third consecutive decline in the headline number. In June overall CPI inflation dipped 0.1 percent, following a 0.2 percent decline in May. The latest month matched the market projection for a 0.1 percent decline. Excluding food and energy, the CPI edged up to 0.2 percent after a 0.1 percent uptick in May. This was higher than analysts’ forecast for a 0.1 percent rise.

By components, energy component dropped 2.9 percent, equaling the May decrease. Gasoline fell 4.5 percent after a 5.2 percent decrease the previous month.

Mid July Consumer Sentiment plunged on economic concerns. It was the the first real movement in the index despite the weakening economy throughout the second quarter. The labor market, volatile financial markets, and oil spill sent the index down 8.5 points from the end of June to a 66.5 reading that pushes this index back to the lows of last year. What is surprising is what has changed since the last reading? Labor market expectations, wage growth and so on has been declining steadily, we haven’t reached another economic cliff.

Morning Outlook

It is an earnings full premarket on Wall Street Friday, as big boys General Electric Co (GE) and Bank of America Corp (BAC) beat analyst estimates following Google’s miss on profit after the bell yesterday. The street will get a gauge on the consumer while headline inflation most likely continued to move down following the tumble in the Producer Price Index. Futures are heading higher before the bell as we wrap up the first week of Q2 earnings while the dollar is mixed. So far in the premarket, Dow Jones industrial average futures rose 16, or 0.2 percent, to 10,308. Standard & Poor’s 500 index futures advanced 3.10, or 0.3 percent, to 1,093.50, while Nasdaq 100 index futures climbed 4.00, or 0.2 percent, to 1,853.25.

Stocks recovered most of their losses on Thursday as the SEC and GS settled fraud charges to the sum of $550 million, which to my surprise was the largest fine ever to a Wall Street firm. The DJIA fell 7.41, or 0.07 percent, to 10,359.31. The Standard & Poor’s 500 index edged up1.31, or 0.1 percent, to 1,096.48, while the Nasdaq composite index declined 0.76, or 0.03 percent, to 2,249.08

On the Corporate Front

Bank of America’s second-quarter net income came in at $2.78 billion 27 cents per share, up 15 percent from $2.42 billion, or 33 cents per share a year ago. Analysts expected profit of 22 cents per share in the quarter.

GE saw a 4 percent decline in revenue, while quarterly net income rose 16 percent to $3.0 billion, or 28 cents per share, up from $2.6 billion, or 25 cents per share, a year earlier. The bottom line was helped by a $3 billion cut in expenses.

Currencies and Commodities

The dollar fell 0.8281% at 86.673 yen in the currency market. The euro appreciated 0.3431% at $1.2994, while the pound lost 0.6136% to $1.5367. Gold moved down $2.50 to $1205.80, while silver fell 0.50% at $18.27. Light, sweet crude came up 8 cents to $76.70 per barrel on the NYMEX; a 0.10% decline.

Economic Calendar

8:30 AM
Consumer Price Index (CPI): Measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation. The consensus is for a 0.1% decrease in June, with a 0.1% gain excluding food and energy. This follows a 0.2% drop in May for the second monthly decline in a row as a drop in energy prices weigh on the headline number.

9:55 AM
Consumer Sentiment: Consumer sentiment is directly related to the strength of consumer spending, by questioning 500 households each month on their financial conditions and attitudes about the economy. The consensus reading for July is 75, down from June’s final reading of 76 which was a 0.5 point gain. We haven’t really seen a decline in sentiment despite the softening economy. It is still more important to see consumers spend rather than what they say in a poll.

Market Summary

The stock market ended its best week in a year, finding momentum at the end of a choppy session ahead of the first wave of quarterly corporate results due out next week. It was a perfect holiday shortened trading week on Wall Street, thanks in part to better than expected economic data aiding bargain hunters. The Dow Jones industrial average rose 59.04, or 0.6 percent, to 10,198.03.The Standard & Poor’s 500 index rose 7.71, or 0.7 percent, to 1,077.96, while the Nasdaq composite index rose 21.05, or 1 percent, to 2,196.45. In the four sessions this week, the blue chips gained 511.55, or 5.3 percent, the S&P 500 rose 55.38, or 5.4 percent and the Nasdaq was up 104.66, or 5 percent.

U.S. crude oil futures ended higher for the third consecutive day on Friday, as crude for August delivery settled up 65 cents, or 0.86 percent, at $76.09 a barrel on the NYMEX. For the week, front-month NYMEX crude ended up $3.95, or 5.48 percent, from the $72.14 settlement on July 2, posting the biggest weekly gain since the end of May.

Q2 Earnings Season Begins

While second-quarter earnings are expected to increase slightly, the tone of company outlooks is more likely to provide direction for the market following the run up last week. After the bell on Monday, blue chipper Alcoa Inc. (AA) kicks off the start to earnings season, followed later in the week by tech heavy weights Intel Corp. (INTC), Advanced Micro Devices Inc. (AMD), and Google Inc. (GOOG). You then have economic bellwether General Electric Co. (GE) , along with financials J.P. Morgan & Chase (JPM) , Citigroup Inc. (C) , and Bank of America Corp. (BAC) . Financials kicked off the market rally following Q1 of 2009, will they provide the next leg up, or will the still troubled retail banking sector hold down profits.

Economic Rundown

Wholesale inventories continued to grow in May, rising 0.5 percent on top of April’s downwardly revised 0.2 percent rise and March’s 0.7 percent rise. May’s gain was centered in the key durables category which rose 0.7 percent and shows strength through components including big gains for machinery, electrical goods and computers that reflect rising business investment.

The report was a positive indicator, and that confidence wholesalers have in the economy to build stockpiles even as sales fall. Total sales at the wholesale level fell 0.3 percent.

Market Summary

Wall Street soared Wednesday, nearly erasing the declines of the previous two sessions as the focus switched to the domestic economy. By the closing bell, major indices enjoyed their third biggest advance of the year. Energy climbed on economic optimism with the sector leading the way for the market. Futures were up modestly in premarket action and extended gains in the morning as pending sales of existing homes rose to the highest level since October as buyers took advantage of the expiring tax credit. The S&P 500 jumped to its session high in the final hour as bank stocks rallied after Bank of America (BAC) and Wells Fargo & Co.(WFC) reported signs of improving credit markets. The Dow Jones Industrial average rose 225.52, or 2.3 percent, to 10,249.54. All 30 blue chips advanced on the day. The Standard & Poor’s 500 index rose 27.67, or 2.6 percent, to 1,098.38, while the Nasdaq composite index climbed 58.74, or 2.6 percent, to 2,281.07.

Bond prices rose, with the yield on the 10 year U.S. treasury rising 8 basis points to 3.35 percent. Crude oil for July advanced 28 cents to $72.86 per barrel on the NYMEX. Investors fled hard assets as traders took more risk, as gold closed down $4.30 to $1,226.60 an ounce.

Economic Rundown

According to the National Association of Realtors, seasonally adjusted index of sales agreements for previously occupied homes rose 6 percent in April from a month earlier, following an upwardly revised 7.1% gain in March to a reading of 110.9. March’s reading was revised upward to 104.6. The rise marked the third consecutive month of increases. Economists had been looking for a 4.3% gain. The index was up 22% from April 2009.

The biggest boost for pending sales was in the Northeast, where sales rose nearly 30 percent. Sales were up 7.5 percent in the West and about 4 percent in the Midwest. They fell 0.6 percent in the South. Look for a decline in the next few months as the tax credit has come and gone. Hopefully low interest rates and an improving labor market will be enough to prevent a reversal of the improvement in the housing market.

Morning Outlook

It is Friday on Wall Street, and what a busy day it is. Two blue chips reported so far in the premarket and beat analyst’s views. We also are awaiting economic news on housing starts and consumer sentiment. A fully loaded Friday for sure, and the market is hot, advancing yesterday for the 6th consecutive session. The market is a funny thing, after all the good things I said that are coming into play this morning, futures are pointing lower. Dow Jones industrial average futures fell 4, or less than 0.1 percent, to 11,092. Standard & Poor’s 500 index futures declined 1.10, or 0.1 percent, to 1,207.30, while Nasdaq 100 index futures dropped 5.50, or 0.3 percent, to 2,029.25.

It is only a slight decline however, and another perfect red to green opportunity if we see some solid housing numbers. A rising greenback isn’t making things any easier for equities this morning.

On the Corporate Front

Multinational conglomerate General Electric Co (GE), whose capital arm’s holdings are still concerning, posted earnings from continuing operations of $2.4 billion or 21 cents per share; greater than the 16 cents per share forecast by analysts.1st quarter earnings for the company were down 30%, while revenue fell 5 percent to $36.6 billion. GE is another bellwether company who stated this morning that they are seeing encouraging economic conditions.

Bank of America Corp (BAC), free from the $45 billion owed to the government, reported 1st quarter earnings of $2.83 billion, or 28 cents per share. Analysts expected profit for the Charlotte based financial giant to tally a mere 9 cents per share. As we have seen from other major financial institutions, proprietary trading operations have made up for the weakness in the commercial banking sector.

Currencies and Commodities

The dollar fell 0.2050% at 92.8350 yen in the currency market. The euro depreciated 0.2925% at $1.3533 while the pound declined 0.2246% to $1.5461. Gold lost $4.50 at $1155.80, while silver dropped 0.40% at $18.36. Light, sweet crude for May delivery fell 94 cents to $84.57 on the NYMEX; a 1.10% decline

Economic Calendar

8:30 AM
Housing Starts: Measures initial construction of residential units for the month of March. Housing construction impacts so many other segments of the economy, from consumer spending on appliances and material to labor. The consensus figure is 605,000 units, up from 575,000 in February as housing starts fell 5.9% in the month.

9:55 AM
Consumer Sentiment: Consumer sentiment is directly related to the strength of consumer spending, by questioning 500 households each month on their financial conditions and attitudes about the economy. The consensus first reading for April is 75, up from the final March reading of 73.6.

Market Summary

A lower dollar helped energy and material stocks send the broader market higher on Friday, while solid economic data boosted market confidence. After stumbling mid week, equities look poised to continue their forward momentum next week as earnings season begins. Despite not being able to hold 11K at the closing bell Friday, the Dow Jones Industrial average advanced 70.28 points, or 0.6 percent, to close at 10,997.35. The blue chips are up 68 percent from their March 2009 lows. The Standard & Poor’s 500 index climbed 7.93, or 0.7 percent, to 1,194.37, while the Nasdaq composite index gained 17.24, or 0.7 percent, to 2,454.05.

The Dow climbed 0.6% for the week, with the S&P up 1.4% and the Nasdaq up 2.1%. Next week is the start of earnings season, with Alcoa Inc (AA) reporting after the bell on Monday.

Economic Rundown

Wholesalers increased their inventories by a larger-than-expected 0.6 percent in February, while sales at the wholesale level increased by 0.8 percent to $338.7 billion, marking the 11th consecutive monthly gain and the largest since October 2008. Sales rose a revised 0.9% in january. As sales rise alongside inventories, look for business to stockpile more orders and boost economic output. A good trend indeed!

Earnings Preview

Monday: Like we said earlier, AA will report after the bell. The aluminum maker is expected to report 10 cents a share in earnings, up from a loss of 60 cents a year ago. Revenue is supposed to jump 25% to $5.2 billion.

Tuesday: Intel Corporation (INTL) is expected to show a 37% increase in revenue to $9.82 billion and earnings per share of 38 cents, up 245% from a year ago.

Wednesday: Financial stud JPMorgan Chase & Co (JPM) is expected to report 63 cents a share in earnings, up from 40 cents a year ago.

Thursday: Google Inc (GOOG), interested to see what they have to say as shares are down 8.7% this year.

Friday: Earnings continue right through Friday, as Bank of America Corp (BAC) and General Electric Co (GE) will release results in the premarket. BAC is expected to report 9 cents a share in earnings, down from 17 cents a year ago. The stock is up 23 percent this year, while GE is up 22 percent.

Market Summary

Wall Street was less than stellar heading into the long holiday weekend Friday. Stocks saw the worst day of 2010, and could be a precursor market activity as we head deeper into earnings season. Financials made their way lower following premarket results from JPM, despite their big jump in the bottom line, the increase in loan losses reminded investors that the retail banking business is still ailing.

The Dow Jones industrial average dropped 100.90 points, or 0.94 percent, to 10,609.65, its biggest decline since Dec. 31. The Standard & Poor’s 500 Index fell 12.43 points, or 1.08 percent, to 1,136.03. The Nasdaq Composite Index lost 28.75 points, or 1.24 percent, to 2,287.99. All three major averages finished lower on the week as the Dow ended down 0.1 percent, its second loss in three weeks. The S&P fell 0.8 percent and the Nasdaq fell 1.3 percent.

Crude-oil prices dropped for the fifth consecutive day, declining 1.08 percent to $78 per barrel on the NYMEX.

After a 62% stock-market rally since March, a broader correction may be in store following market reactions to Intel Corp (INTC) and J.P. Morgan Chase (JPM)

It’s a busy week ahead with more than 400 companies issuing reports between Tuesday and Friday.

Earnings Notables

Tech: IBM (IBM) after Tuesday’s close and Google (GOOG) after Thursday’s close.

Restaurant Chains: Starbucks (SBUX) after Wednesday’s close and McDonald’s (MCD) before Friday’s open.

Financials; Citigroup (C) on Tuesday. Bank of America (BAC), Wells Fargo (WFC), and US Bancorp (USB), on Wednesday. Goldman Sachs (GS) will hit on Thursday

Airlines: Continental Airlines, Inc (CAL) and Southwest Airlines Co (LUV) on Thursday.

It was a mixed result on Wall Street Wednesday as equities came off their morning highs after the release of the fed statement in the afternoon. The blue chips were the only average unable to stay green at the close, as the Dow Jones industrials fell 10.88, or 0.1 percent, to 10,441.12. The broader Standard & Poor’s 500 index rose 1.25, or 0.1 percent, 1,109.18, while the Nasdaq composite index rose 5.86, or 0.3 percent, to 2,206.91

Morning Outlook

Futures are making their way lower this morning on the street as the rising greenback is putting pressure on equities and commodities. Before the weekly jobless number, Dow Jones industrial average futures are down 61, or 0.6 percent, at 10,390. Standard & Poor’s 500 index futures are down 8.00, or 0.7 percent, at 1,097.70, while Nasdaq 100 index futures are down 14.00, or 0.8 percent, at 1,786.00.

Bank of America Corp (BAC) has found their new man to replace outgoing CEO Ken Lewis. The exhausting search has landed them consumer and small business banking chief, Brian Moynihan, as president and CEO.

Currencies and Commodities

The dollar rose 0.1877% at 89.95 yen in the currency market. The euro depreciated 1.1257% to $1.4368 while the pound lost 1.2828% to $1.6124. Gold is down $14.90 to $1121.30 an ounce, while silver dropped 1.46% at $17.43. Light, sweet crude for January delivery fell 53 cents to $72.13; a loss of 0.73%

Economic Calendar

8:30 AM
Jobless Claims: New unemployment claims for the week of December 12th , to show the number of individuals who filed for unemployment insurance for the first time. The fewer people filing for unemployment benefits, the more have jobs, the more income in the consumer’s pocket, as well as a forecast on the strength of the economy. The consensus is for an increase of 465,000 for first time jobless claims, down from last week’s reading of 474,000; while continuing claims rose fell by 303,000 to 5.157 million. The four week moving average keeps ticking down, dropping 7,750 to 473,750.

10:00 AM
Leading Indicators: A composite index of ten economic indicators that should lead overall economic activity. The consensus is for a 0.7% increase for the month of November, following a 30 basis point increase in October. The reading was led higher by the spread on the 10 year treasury and the fed funds rate, the larger gap is evidence of expected economic growth and a rise in future rates and inflation.

Market Summary

Stocks fell sharply Tuesday as blue chip stocks lowered guidance, while financials slumped on debt worries. Equities faced pressure from a climb in the U.S. dollar and a dip in commodities. The markets opened negative, and closed out the day near their lows of the session. Energy, financials, consumer staples all had a rough going.

The Dow Jones industrial average fell 104.14 points, or 1.00 percent, at 10,285.97. The Standard & Poor’s 500 Index closed down 11.31 points, or 1.03 percent, at 1,091.94. Tech was the best performer as the Nasdaq Composite Index lost 16.62 points, or 0.76 percent, at 2,172.99.

Benchmark crude for January delivery dropped $1.31 to settle at $72.62 a barrel on the NYMX; it’s fifth day of declines.

3M Company (MMM) gave a 2009 outlook that fell short of Wall Street’s consensus and provided investors with a cautious initial view of its 2010 earnings. McDonald’s Corporation (MCD) said sales at its established U.S. restaurants dipped in November as competitors pushed low prices to bring in consumers

ISM Manufacturing Forecast

The Institute for Supply Management released their semiannual economic forecast. Economic growth in the United States will resume in 2010, with manufacturing revenue forecast to rise 5.7 percent. Capital expenditures in manufacturing are expected to fall, but with the decline improving to 4 percent next year from a drop of 7.8 percent in 2009.
Revenue in the non-manufacturing sector is expected to increase by 1.3 percent in 2010, while capital expenditures in the services sector will decrease by 6.7 percent.

Manufacturers expect employment in their sector will increase by 1.5 percent, while labor and benefits costs are expected to increase an average of 1.4 percent in next year.

A Little Commercial Real Estate Acquisition

The Simon Property Group has agreed to buy Prime Outlets from the Lightstone Group for $2.235 billion, adding 22 retail outlets to its portfolio. Under the terms of the deal announced Tuesday, Simon’s consideration for Prime Outlets will consist of 80 percent cash and 20 percent stock.

Simon the largest mall operator, has arranged a $3.565 billion line of credit that can expand up to $4 billion; led by JP Morgan Chase Co (JPM) and Bank of America Inc (BAC)

Wall Street finished the session mixed on Wednesday as the blue chips lost ground off of their 14 month high, falling 18.90, or 0.2 percent, to 10,452.68. The Standard & Poor’s 500 index edged up 0.38, or less than 0.1 percent, to 1,109.24, and the Nasdaq composite index rose 9.22, or 0.4 percent, to 2,185.03. However, there were more advancing than declining stocks on the NYSE by about a 2-1 margin.

Morning Outlook

Stock futures are higher Thursday after Bank of America Corp. (BAC) has stated it will raise additional capital to repay the $45 billion in TARP funds it has received. The street is also awaiting data on weekly jobless claims, the last reading before tomorrow’s November employment situation. Expect trading to be uneasy heading into the report. We had a massive rally in November, and investors may want to take their profits.Dow Jones industrial average futures rose 27, or 0.3 percent, to 10,466. Standard & Poor’s 500 index futures rose 3.30, or 0.3 percent, to 1,111.20, while Nasdaq 100 index futures rose 4.50, or 0.3 percent, to 1,796.00.

Currencies and Commodities

The dollar rose 0.6643% at 87.965 yen in the currency market. The euro appreciated 0.5035% to $1.512 while the pound gained 0.021% to $1.6632. Gold advanced to another new record high on the falling dollar, rising $7.20 to $1220.20 an ounce, while silver lost 0.47% at $19.23. Light, sweet crude for January delivery rose 70 cents to $77.30 per barrel on the NYMEX; a 0.91% advance.

Economic Calendar

8:30 AM
Jobless Claims: New unemployment claims for the week of November 28th , to show the number of individuals who filed for unemployment insurance for the first time. The fewer people filing for unemployment benefits, the more have jobs, the more income in the consumer’s pocket, as well as a forecast on the strength of the economy. The consensus is for an increase of 485,000 for first time jobless claims, up from last week’s reading of 466,000; while continuing claims fell by 190,000 to 5.423 million. The four week moving average fell 16,500 to 496,500.

8:30 AM
Productivity and Costs: Productivity measures the growth of labor efficiency in producing the economy’s goods and services for the 3rd quarter. Unit labor costs reflect the labor costs of producing each unit of output. Productivity growth is critical because it allows for higher wages and faster economic growth without inflationary consequences. The consensus change in nonfarm productivity is 8.6%, as employers cut hours forcing work to be done at a faster rate, rather than increasing output in the economy. This follows a 9.5% increase in Q2 of 2009.

10:00
ISM Non-Manufacturing Index: A compilation from 60 non manufacturing sectors across the economic spectrum. The index helps gauge strengths and weaknesses within the economy. The composite index for the month of November is expected to have a reading of 52; the ISM non-manufacturing survey fell 30 basis points in October to 50.6.