Market Summary

A horrific manufacturing reading and extremely troubling jobless claims number in the premarket sent futures negative before the bell. Stocks extended their losses throughout the session, aided by a weak regional manufacturing survey. The economic news is not good, and when the street is reacting from economic data point to corporate news, you are going to see moves like this. I said a few days ago that stocks were holding up well, surprisingly with the blue chips still well over 10K, despite the fact that the data is not ruling out a double dip.

By 4PM on Wall Street, the Dow Jones industrial average fell 144 points, or 1.4 percent, to 10,271. The Standard & Poor’s 500 index lost 18, or 1.7, to 1,075, while the Nasdaq composite index declined 36, or 1.7 percent, to 2,178.

September crude fell 99 cents, or 1.31 percent, to settle at $74.43 a barrel on the NYMEX, trading as low as $73.96 on the disappointing economic data.

Economic Rundown

The Labor Department reported that weekly jobless claims unexpectedly rose in the week ending August 14th. Initial claims advanced by 12,000 to 500,000 last week from an upwardly revised 488,000 a week earlier. The street was looking for a 4K fall to 480,000. The four-week average of 482,500 is the largest since December. This is a flashing red light for Q3. We could be looking at 1 percent with numbers like these as employers are still cutting costs to meet demand.

The Philly Fed manufacturing survey was negative 7.7 for August after a reading of positive 5.1 last month. Economists were expecting a reading of around positive 7. Manufacturing has helped lead the economy out of the deep recession. This is not a good sign whatsoever. Regional activity will be watched closely throughout the rest of the month in hopes that this was an outlier in the overall economic malaise, rather than a turn down to negative territory.

On the Corporate Front

Dell Inc. (DELL) saw a 16 percent jump in net income to 32 cents per share on $545 million, beating the street’s estimates of 30 cents. Earnings came in at $472 million, or 24 cents a share, in the same period a year earlier. Revenue rose 22 percent to $15.5 billion, from $12.8 billion. That’s more than the $15.2 billion analysts predicted. All in all, a very good quarter for the world’s second largest PC maker.

A second quarter top and bottom line win for DELL! I am feeling positive right now, and will overlook the week consumer business and drop in margins for the company’s products.

Market Summary

U.S. stocks rose for a third straight day, overcoming slight morning losses to rally on regional manufacturing data. It was a day filled with economic data, which was mixed, but enough to carry equities higher. The Dow Jones Industrial average is up nearly 300 points this week as the blue chips gained 83.66, or 0.8 percent, to 10,392.90. The broader Standard & Poor’s 500 index climbed 7.24, or 0.7 percent, to 1,106.75, and the Nasdaq composite index advanced 15.42, or 0.7 percent, to 2,241.71.

The street was also impressed with the 10th consecutive increase in the leading indicators measure, which rose 0.3% in January.

Jobless Claims Jump Back Up

The number of workers filing new claims for jobless benefits jumped by 31,000 to 473,000 in the week ended Feb. 13, reversing last week’s large drop. The four-week moving average of jobless claims fell by 1,500 to 467,500 from the previous week’s revised average of 469,000. Continuing claims, drawn by workers for more than one week, were unchanged at 4.6 million

Higher Energy Costs Lead to Spike in PPI

Compared to the December PPI, wholesale prices accelerated by a higher than expected 1.4% in January on higher energy costs, especially an 11.5% rise in gasoline prices. Core wholesale prices, which is the measure the fed looks at when determining inflationary pressures, increased 0.3% last month after remaining flat in December.

Dell Down After the Bell

Dell Inc (DELL) reported a net profit of $334 million, or 17 cents a share, for its fiscal fourth quarter ended January 29, compared with $351 million, or 18 cents a share, in the year-ago period. Revenue rose 11 percent to $14.9 billion on lower margins, beating the average estimate of $13.8 billion

Excluding items, Dell earned 28 cents a share against the average Wall Street forecast of 27 cents. Shares fell sharply after hours.

Big week coming up in financial markets, as the holiday shortened week squeezes more economic data and earnings in the four day week. Also, Black Friday hits us this week, and retailers have shed inventory to prepare for a slow season, but at the end of the day, the holiday season is crucial for retailers to make something resembling a profit in line with the consensus.

Three important questions about the economy came up this week, and they may be answered next week. How the answers turn out may well signal where the market may end next week and, perhaps, in December.

Question No. 1: Where is technology going?

After a miss on the part of Dell Inc (DELL), the market will get a better picture of that Monday when Hewlett-Packard Corp (HPQ) reports its fiscal-fourth-quarter earnings.

HP is expected to report earnings of $1.13 a share, up from $1.03 a year ago, on revenue of $30.4 billion. Revenue is expected to be down 9.7%.

The key is how HP, the top PC maker, describes its PC business. It markets computers largely through retailers. So it has a big consumer franchise. But it also has a big corporate business.

Question No. 2: Is housing dead or alive? The news for housing this week was miserable. A big decline in housing starts in October to an annualized 529,000 units — 76% lower than the January 2006 peak — was largely driven by a big drop in apartment construction. Mortgage delinquencies now affect more than 10% of all outstanding mortgages.

Next week brings three more important looks at the housing market:

First up is existing-home sales from the National Association of Realtors on Monday. IHS Global Insight sees the October rate hitting 5.85 million units, up from 5.57 million units in September and up 18% from a year ago. Any number that beats September’s sales rate is a bullish signal. Probably a third, maybe more, will come from first-time homebuyers scrambling to qualify for the $8,000 tax credit as well as foreclosed homes being unloaded by lenders.

Next is the S&P/Case-Shiller Index for September, due Tuesday. This tracks sale prices of existing homes in 20 major markets. The index has been trending higher since April or so.

Last is new-home sales, due Wednesday from the Commerce Department. IHS Global sees slippage to a 394,000-unit sales rate, based on declining building permits and the 13-month period it takes to sell a new home. An important point about new-home sales: Typically, people who already own a home form the core of new-home buyers. Builders aren’t generally looking for first-time buyers.

Question No. 3: Has the U.S. dollar bottomed? For the pros on Wall Street, this was a big and important question. Granted, the dollar didn’t rise much. The U.S. Dollar Index was up just 0.4% to 75.73. The dollar was up 1.1% against the British pound, 0.3% against the euro and nearly 2% against the Canadian dollar. The greenback posted its fourth straight weekly loss versus the yen.

The dollar has been trading lower because traders believe the Federal Reserve when it says it will keep interest rates near zero to encourage economic growth.

Nonetheless, the week’s move higher had an important impact on stocks if only because nobody expected it. It hit oil prices, and energy stocks were among the week’s biggest losers.

Market Summary

U.S. stocks fell on Friday after worse-than-expected quarterly results from computer maker Dell Inc and homebuilder D.R. Horton Inc (DHI) underscored that the road to recovery would not be smooth. The end result was a third straight day of losses for the street, as the Dow Jones Industrial Average lost 14.28, or 0.1 %, to 10,318.16. The broader Standard & Poor’s 500 index fell 3.52, or 0.3 %, to 1,091.38, while the Nasdaq composite index fell 10.78, or 0.5 %, to 2,146.04. The tech heavy Nasdaq was the hardest hit by the quarterly report by DELL after the bell on Thursday. The Russell 2000 index of smaller companies fell 1.00, or 0.2 %, to 584.68.

Despite the uneven and sloppy trading, the blue chips closed the week up 47.69, or 0.5 %, at 10,318.16. The Standard & Poor’s 500 index fell 2.10, or 0.2 %, to 1,091.38. The Nasdaq composite index fell 21.84, or 1 %, to 2,146.04.The Russell 2000 index fell 1.60, or 0.3 %, for the week to 584.68.

Worries about the economy sent the dollar up and crude down, as oil fell 74 cents to settle at $76.72 per barrel on the NYMEX. Short term yields fell as prices rose signaling higher demand, while further out maturities saw rising yields. Interesting combination and shows what the market is thinking about near term movement.

Geithner’s Days Numbered?

While Democrats have generally defended Geithner’s handling of the economy and the $700 billion Wall Street bailout, some are beginning to blame President Barack Obama’s administration for not doing enough to help Main Street voters. Geithner, who before his Treasury post was president of the Federal Reserve Bank of New York, also is becoming a target for those critics.

You may recall that Geithner’s appointment gave relief to the markets last fall to the tune of some 400+ points. The administration backed him despite his “Turbo Tax Tim” image of a cheat and a fraud. How would the street react if it became clear that he was out? If unemployment stays persistently high, he could be a scape goat, the Treasury Department has become a well known cabinet position for better or worse.

Wall Street fell on Thursday after days of questionable economic data. The blue chips were down as much as 170 points before closing down 93.87, or 0.9 percent, to 10,332.44. The broader Standard & Poor’s 500 index fell 14.90, or 1.3 percent, to 1,094.90, while the Nasdaq composite index fell 36.32, or 1.7 percent, to 2,156.82. The small caps got hit the hardest, with the Russell 2000 index of smaller companies falling 14.47, or 2.4 percent, to 585.68.

Morning Outlook

The rally in the greenback is not helping equities, while the poor earnings report after the bell from Dell Inc. (DELL) and the downbeat economic data this week is sending futures lower on Friday. Dow Jones industrial average futures fell 47, or 0.5 percent, to 10,280. Standard & Poor’s 500 index futures declined 5.50, or 0.5 percent, to 1,088.80, while Nasdaq 100 index futures fell 6.25, or 0.4 percent, to 1,764.00.

There is no economic data scheduled for release to move the markets today, so the pressure from the dollar and earnings from the private sector make what they have to say that more imperative.

On the Corporate Front

Tech heavyweight Dell Inc. missed expectations after the closing bell yesterday. Net income fell to $337 million, or 17 cents per share, in its latest quarter, which ended Oct. 30. That compares with $727 million, or 37 cents a share, in the same period a year ago. Revenue fell 15 percent to $12.9 billion. The street expected DELL to earn 28 cents per share on $13.2 billion in revenue in the latest quarter.

Home builder D.R. Horton Inc. (DHI) saw a trimming of its quarterly loss to $231.9 million, or 73 cents per share, compared with a loss of $799.9 million, or $2.53 per share, a year earlier. Revenue fell 42 percent to $1.01 billion from $1.75 billion. The company missed forecasts on the top and bottom line, as street estimates forecasted a quarterly loss of 30 cents per share on revenue of $1.11 billion.

Currencies and Commodities

The dollar rose 0.0393% at 89.01 yen in the currency market. The euro depreciated 0.6733% at $1.4825 while the pound declined 1.1293% to $1.6479. Gold fell off of its record high, down $4.80 to trade at $1137.10 an ounce, while silver lost 1.14% at $18.18. Crude also made its way lower on economic uncertainty. Light, sweet crude for December lost 88 cents to $76.58 per barrel on the NYMEX; a 1.14% decline.

All three major averages finished lower Wednesday as uneven economic data kept equities red. The Dow Jones industrial average dropped 11.11 points, or 0.11 percent, to 10,426.31. The Standard & Poor’s 500 Index dipped just 0.52 of a point, or 0.05 percent, to finish at 1,109.80. The Nasdaq Composite Index lost 10.64 points, or 0.48 percent, to end at 2,193.14. The market as a whole is up roughly 7% this month, blowing past 10K on the Dow and holding 1100 on the broader S&P benchmark.

Morning Outlook

Yesterday’s housing data coupled with the release of two important economic reports today and a rising dollar didn’t set up for a good mix in the premarket. Futures are down sharply across the board before the release of the weekly jobless claims data. Dow Jones industrial average futures fell 75, or 0.7 percent, to 10,329. Standard & Poor’s 500 index futures declined 10.40, or 0.9 percent, to 1,098.10, while Nasdaq 100 index futures fell 13.00, or 0.7 percent, to 1,787.50.

Traders will get another batch of earnings today from retailers Sears Holdings (SHLD), Gap Inc(GPS) and Dick’s Sporting Goods Inc (DKS). After the bell, the tech sector will watch extremely closely with what Dell Inc (DELL) reports. Its all about holiday outlook…

Currencies and Commodities

The dollar fell 0.487% at 88.88 yen in the currency market. The euro depreciated 0.6914% at $1.486 while the pound declined 0.6084% to $1.6647 . Gold fell off of its record high, down $5.20 to trade at $1136 an ounce, while silver lost 1.03% at $18.23. Crude also made its way lower Thursday as the greenback rose. Light, sweet crude for December lost 70 cents to $78.88 per barrel on the NYMEX; a 0.88% decline.

Economic Calendar

8:30 AM
Jobless Claims: New unemployment claims for the week of November 14th , 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 504,000 for first time jobless claims, up from last week’s reading of 502,000; while continuing claims rose fell by 139,000 to 5.631 million. The four week moving average was down 4,500 to 519,750 for the lowest level since last November.

10:00 AM
Leading Indicators: A composite index of ten economic indicators that should lead overall economic activity. The consensus is for a 0.4% increase for the month of October, following a 100 basis point increase in September; its 6th consecutive gain. 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

Wall Street fell Monday, as a rising dollar hit energy and commodity stocks. Blue chips fell off of 11 month highs as the Dow Jones industrial average fell 41.34, or 0.4 percent, to 9,778.86, after earlier falling as much as 95 points. The broader Standard & Poor’s 500 index lost 3.64, or 0.3 percent, to 1,064.66, while the tech-heavy Nasdaq composite index rose 5.18, or 0.2 percent, to 2,138.04. Tech stocks were led higher b the deal between Dell and Perot Systems. The Russell 2000 index of smaller companies declined 1.91, or 0.3 percent, to 615.97.

Bond prices fell, sending the yield on the benchmark 10-year Treasury note up 2 basis points to 3.48%. Crude oil closed down $2.33 to $69.71 on the NYMEX; the October contract expires tomorrow. Gold fell $5.40 an ounce to $1004.90, its seventh straight close above $1,000 an ounce.

Leading Indicators Reaffirm Position that Great Recession is “Likely Over”

The index of U.S. leading economic indicators rose for the fifth straight month, capping the longest stretch of gains since 2004 and signaling a recovery is under way.

The Conference Board’s gauge of the economic outlook for the next three to six months rose 0.6 percent in August, in line with forecasts, after a 0.9 percent increase in July that was larger than previously estimated

Tech Deal Lifts NASDAQ

In an effort to diversify their business outside of the personal computer market, Dell Inc. (DELL) announced a $3.9 billion deal to acquire IT firm Perot Systems Corp (PER). The deal, approved by both companies boards, is an all cash swap valuing PER shares at $30, a roughly 65% premium over Friday’s close.

Wall Street did fall out of the open after the release of weekly jobless claims and revised 2nd Quarter GDP. However the market rebounded, and at the closing bell all the major averages found themselves in positive territory. We saw some large swings in the market as volume has been very light as the summer winds down.

The Dow rose 37.11, or 0.4 %, to close at 9,580.63, after giving up as much as 84 points early in the session. That marks the 8th consecutive win for the blue chips. The Standard & Poor’s 500 index rose 2.86, or 0.3 %, to 1,030.98, while the Nasdaq composite index rose 3.30, or 0.2 %, to 2,027.73.

Morning Outlook

In Europe, data released o Friday showed business and consumer confidence rose in the 16-nation euro zone. Markets went higher on the news despite losses in China. Germany’s DAX rose 87.77 points, or 1.6 %, to 5,558.10 while Britain’s FTSE 100 gained 54.90 points, or 1.1 %, to 4,924.25. France’s CAC-40 rose 56.02, or 1.5 %, to 3,704.55

Overnight in Asia, Japan’s Nikkei 225 stock average rose 60.17 points, or 0.6 %, to 10,534.14. However, the world’s 2nd largest economy is in trouble. Despite being out of a recession, they face their highest unemployment of all time while prices fell at a record rate. The country knows a thing or two about deflation, and they could be facing another lost decade of economic activity. In China, the Shanghai benchmark dove 2.9 % to 2,860.69, and Hong Kong’s Hang Seng was off 0.7 % at 20,098.62.

On Wall Street, futures point higher ahead of two key economic reports this morning. Dow Jones industrial average futures rose 31, or 0.3 %, to 9,598. Standard & Poor’s 500 index futures rose 4.80, or 0.5 %, to 1,034.10, while Nasdaq 100 index futures rose 7.00, or 0.4 %, to 1,646.00.

The data from Europe give hope to marketplace that the consumer in the region may be also recovering; spending and sentiment will be a major factor in trading as the U.S. consumer is still shaken by the events of this recession.

On the Corporate Front

Dell Inc. (DELL), like others in the sector had an extremely rough quarter as business spending has been anemic, while margins have dropped on oversupply. Profit for the world’s number 2 PC maker fell 23% to $472 million, or 24 cents per share, in the three months ended July 31. That compares with profit of $616 million, or 31 cents per share, in the year-ago period. Sales fell 22 % to $12.8 billion.

Economic Calendar

8:30 AM
Personal Income: the dollar value of income received from all sources by individuals. Consumer spending: Includes consumer purchases of durable and nondurable goods, and services.

The consensus increase in personal income for the month of July is 0.1%, while June saw a decline of 1.3%; due to a 5.9 % fall in transfer payments. Consumer spending is expected to have risen 0.3% in the month, down 10 basis points from June. Consumer spending has been fluctuating alongside the price of energy, while core spending has not accelerated.

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 final reading for August is 64, up from the prior reading of 63.2. Recent news on the economy has been a little better with equities rebounding and initial jobless claims coming down, while all signs point to housing stabilization. We are still far ahead of February’s low of 56.2, but down from the 70.8 mark in June as expectations have fallen.

Market Summary

Well the morning outlook was spot on, Wall Street did fall out of the open after the release of weekly jobless claims and revised 2nd Quarter GDP. However the market rebounded, and at the closing bell all the major averages found themselves in positive territory. We saw some large swings in the market as volume has been very light as the summer winds down. The Dow rose 37.11, or 0.4 percent, to close at 9,580.63, after giving up as much as 84 points early in the session. That marks the 8th consecutive win for the blue chips. The Standard & Poor’s 500 index rose 2.86, or 0.3 percent, to 1,030.98, while the Nasdaq composite index rose 3.30, or 0.2 percent, to 2,027.73.

The market reversed early losses as oil rebounded. Crude had been down to $69.83 per barrel before closing up $1.06 to settle at $72.49 for the front month October contract.

Regional Banks Face Serious Challenges

The number of problem US banks rose to the highest level in 15 years between April and June, the according to the FDIC. The Federal Deposit Insurance Corporation (FDIC) said 416 banks had failed its test criteria during the quarter, up 111 from January to March.
The agency has seized 81 banks so far in 2009.

Their commercial loan holding continue to be the big elephant in the room that no one wants to talk about.

Dell Beats Estimates After the Bell

Dell Inc. (DELL), like others in the sector had an extremely rough quarter as business spending has been anemic, while margins have dropped on oversupply. Profit for the world’s number 2 PC maker fell 23% to $472 million, or 24 cents per share, in the three months ended July 31. That compares with profit of $616 million, or 31 cents per share, in the year-ago period. Sales fell 22 percent to $12.8 billion.