Stocks closed mixed after the latest GDP report added to a growing bank of data showing the economy in robust health. Tech investors got bearish as they digested weak results and a disappointing outlook from Microsoft (Nasdaq: MSFT). However, a solid reading on economic growth and soaring commodity prices kept the broader market steady.

Today, the Dow Jones industrial average closed down 15.37 to 11,367.14, the broader Standard & Poor's 500 index closed up 0.89 to 1,310.61, and the Nasdaq composite index closed down 22.38 or 1% to 2,322.57. For the month, the Dow gained 2.3%, the S&P gained 1.2%, while the Nasdaq lost 0.7%.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 19 to 12 on volume of 1.68 billion shares. On the Nasdaq composite, advancers topped decliners by a margin of 16 to 13 on volume of 2.56 billion shares; Microsoft accounted for roughly 25 percent of the Nasdaq volume.

The U.S. economy grew at an annual rate of 4.8% in the first quarter. This is close to market expectations of a gain of 4.9%. The important aspect is that this has not translated into inflationary pressures for the economy. The core CPI retreated to a 2% from 2.4%, and employment costs fell to their lowest level since 1999

Microsoft (Nasdaq: MSFT) reported fiscal third-quarter earnings and sales that missed forecasts and issued earnings guidance for the current quarter that was below analysts' projections. The stock closed down $3.14 or 12% to $24.11. CIBC World Markets downgraded the company two notches to sector underperformer from sector out-performer. Morgan Stanley (NYSE: MS) also lowered its recommendation on the stock to equal weight from overweight. However, investors need to note that Microsoft is in a transition period. It is about to release a slew of new products, including Vista and the next version of Office.

Amongst stocks that gained, Citigroup (NYSE: C) closed up $1.75 or 3% to $49.90, after brokerage Piper Jaffray upgraded the financial firm to "outperform" from "market perform." JP Morgan Chase (NYSE: JPM) closed up $1.34 or over 3% to $45.29, after Prudential lifted its 12-month price target on the company and reiterated its "overweight" rating. Stock of Avon (NYSE: AVP) closed up $1.30 or 5% to $32.55, as sales in North America rose for the first time in over a year.

Conexant Systems (Nasdaq: CNXT) closed down $0.30 or 8% to $3.57, after the company reported improved quarterly earnings and revenue that beat forecasts. But investors saw a chance to take profits on the stock. Openwave Systems (Nasdaq: OPWV) closed down $2.04 or 10% to $18.47, despite results that beat estimates. Stock of Smithfield Foods Inc. (NYSE: SFD) fell as much as 10% to $25 after it warned its fourth-quarter profit will fall well short of last year's results and Wall Street's expectations because a glut of pork on the market is depressing prices. The stock ended down 3.2% at $26.90

U.S. light crude oil for June delivery added 91 cents to settle at $71.88 a barrel on the New York Mercantile Exchange. Crude lost about 5 percent this week from highs above $75 a barrel before rebounding on the latest worries about Iran's nuclear capabilities.

Posted by Manuel Backus to The Markets at 11:16 PM | Permalink

Stocks closed higher for the second straight session after encouraging comments from Fed chair Ben Bernanke. He hinted at a pause in the Federal Reserve's rate-tightening cycle and the market jumped in joy. Sharp gains for Intel Corp (Nasdaq: INTC) helped the Nasdaq to go higher while the Dow closed at its highest level since Jan. 19, 2000.

Today, the Dow Jones industrial average closed up 26.83 or 0.2% to 11,382.51, the broader Standard & Poor's 500 index closed up 4.31 or 0.3% to 1,309.72, and the Nasdaq composite index closed up 11.32 or 0.5% to 2,344.95.

Market breadth was negative. On the New York Stock Exchange, advancers held a 17 to 14 advantage over decliners on volume of 1.9 billion shares. On the Nasdaq, advancers edged out decliners 15 to 14 on volume of 2.4 billion shares.

Bernanke in his speech, raised the prospect of an end to rate hikes, but also made it clear that a pause in interest-rate increases wouldn't necessarily mean the Federal Reserve was done raising rates. He said a pause, even if inflation remains a threat, would give the central bank more time to get a true picture of the economy. He said that the economy had rebounded briskly after the devastation of Hurricane Katrina, but also that the pace was likely to slow a bit after the strong first quarter of 2006. The persistently high oil and gas prices were a bother, but that as long as oil stabilizes, even at a high level, its impact should diminish over time. In the minutes right after the release of the testimony, Treasury yields reversed direction, stocks recovered and pushed to new highs.

In data, there was some disappointment on the employment front. First-time applications for state unemployment benefits rose by 11,000 last week to a seasonally adjusted 315,000.

Shares in Exxon Mobil Corp. (NYSE: XOM) traded after the oil giant's first-quarter earnings missed analyst estimates. The company reported quarterly earnings of $1.37 per share against the expected $1.47 per share. The stock closed down $0.50 or 1% to $62.60. The company said higher crude oil and natural gas realizations and improved marketing margins were partly offset by lower chemical margins.

Shares of GlaxoSmithKline Plc. (NYSE: GSK) rose 4.4% to $55.40 after the UK drug maker surprised the market with a 25% profit rise in the first quarter, driven by strong sales of its asthma and antiviral treatments. Stock of Bristol-Myers Squibb Co. (NYSE: BMY) posted an in-line first-quarter profit, but sales topped analyst expectations, boosted by a strong sales of its top-selling Plavix and several newer medications. The stock closed up 35 cents at $25.33. The entire pharmaceutical sector also received a lift from strong earnings from German drugs and chemicals group Bayer AG (NYSE: BAY) and a raised profit view from UK drugs giant AstraZeneca Plc (NYSE: AZN).

J.P. Morgan cut its rating on the defense contractor Honeywell International Inc. (NYSE: HON) to underweight from neutral and this led the shares to close down 1.9% at $43.25. They cited concerns over environmental related costs. Shares of Intel Corp. (Nasdaq: INTC) shares closed up 2.5% at $19.97, after Chief Executive Paul Otellini said he plans to restructure and resize the semiconductor giant. He acknowledged the recent setbacks, but said that the company plans to burn off excess inventory, and win back market share for its computer chips.

Shares in Microsoft Corp. (Nasdaq: MSFT) climbed after it reported its fiscal third-quarter profit rose 16% as revenue increased on stronger demand. Its net income rose to $2.98 billion, revenue increased 13% to $10.9 billion. The results were in line with market expectations. The company also offered a profit forecast for the coming fiscal year that lagged estimates, while its revenue forecast was above expectations.

Light, sweet crude oil for June delivery fell 96 cents to $70.97 a barrel on the New York Mercantile Exchange. The futures moved lower in a continued response to better-than-expected weekly inventory data, and with news of a surprise interest rate hike in China reducing demand expectations.

Posted by Manuel Backus to The Markets at 05:49 PM | Permalink

Factors that lead to higher market were strong data, a new Federal Reserve Beige Book showing a healthy economy and solid earnings from Boeing Co. (NYSE: BA), Amazon.com Inc. (Nasdaq: AMZN) and PepsiCo Inc. (NYSE: PEP). The Dow Jones Industrial Average putting in its highest close in more than 6 years amid encouraging signs of economic growth.

Today, the Dow closed up 71.24 or 0.6% to 11,354.49, and ended the session at a new high for this year, marking its highest level since Jan. 19, 2000. The broader Standard & Poor's 500 closed up 3.67 or 0.3% to 1,305.41, and the Nasdaq composite index closed up 3.33 to 2,333.63.

Market breadth was positive. On the New York Stock Exchange, winners beat losers nine to seven on volume of 1.76 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin as 2.12 billion shares traded hands.

Today’s gains were due largely to the positive earnings and all indicators are pointing to strong economic growth. Investors looked at strong existing home sales and durable goods reports as evidence that the economy remains in robust health. Despite the positive tone, inflation concerns could come back into focus tomorrow, when Federal Reserve Chairman Ben Bernanke is set to testify before Congress on the economic outlook.

In data news, new-home sales increased by 13.8% in March and cast some doubt on talk of a slowdown in the housing market. Orders for new U.S. made durable goods increased 6.1% in March. This is the largest increase since May 2005 and exceeded the 2.1% gain expected by economists. The Fed's Beige Book on current economic conditions underlined the current strength of the U.S. economy. While, many expect the economy to slow later this year, the message from a Fed survey of economic conditions through mid-April is that there is inherent strength.

The Dow march North was led by General Motors (NYSE: GM) that closed up $1.74 or8.1% to $23.15. Merrill Lynch (NYSE: MER) upgraded GM to "neutral" from "sell" on optimism about its restructuring plan, saying that there are early signs that a turnaround is brewing. They believes that the automaker may leverage its over-funded U.S. pension plan to fund its North America restructuring.

Shares of PepsiCo (NYSE: PEP) closed up $0.36 to $57.86, after the food and beverage company posted earnings and revenue ahead of consensus estimates. Colgate-Palmolive Co. shares (NYSE: CL) surged to their best numbers since July 2004 after it posted first-quarter net income that easily surpassed Wall Street's target, helped by solid sales and volume gains, increased selling prices and a shift to higher-margin products. The stock closed up 2.8% at $58.95.

Amazon.com (Nasdaq: AMZN) shares closed up $0.24 cents to $35.79. The online retailer's sales climbed 20% to $2.28 billion, ahead of analysts' expectations. However, its quarterly profit tumbled 35%, hurt by the cost of employee stock options and higher operating expenses. Additionally, it also issued a second-quarter sales forecast that sets the midpoint above analysts' estimates.

Boeing (NYSE: BA) reported quarterly earnings Wednesday morning that rose from a year ago but missed forecasts. Shares of Boeing closed down $0.20 to $84.91, after hitting an all-time high last week. The aerospace giant posted a forecast-beating first-quarter profit, but sales of $14.26 billion came in shy of analysts' estimates. Its 2006 revenue outlook also was below Wall Street's view.

Nokia Corp. (NYSE: NOK) the biggest cell-phone maker, ended up 1.2% at $22.94. Rival Motorola Inc. (NYSE: MOT) gained 0.5% to $22.10. RF Micro (Nasdaq: RFMD) shares shot up to their best levels in more than two years, up more nearly 13.7% at $9.41. The maker of integrated circuits for wireless devices, posted solid quarterly results, which it attributed in part to strong demand from the world's leading mobile-handset manufacturers.

U.S. light crude oil for June delivery fell 95 cents to settle at $71.93 a barrel on the New York Mercantile Exchange. The futures got lower after a U.S. government report showed that gasoline supplies fell for an eighth week, but the fuel's import level was among the highest on record and refinery activity climbed 2%.

Posted by Manuel Backus to The Markets at 10:23 PM | Permalink

Worries about the interest rate outlook, sparked by unexpectedly brisk data, overshadowed a drop in crude-oil prices and solid earnings releases from AT&T (NYSE: T), Yum Brands (NYSE: YUM) and JetBlue Airways (Nasdaq: JBLU). Blue-chip stocks slumped as investors opted to step back after the recent market rally.

Today, the Dow Jones industrial average closed down 53.07 or 0.5% to 11,283.25, the broader Standard & Poor's 500 index closed down 6.37 or 0.5% to 1,301.74, and the Nasdaq composite index closed down 3.08 or 0.1% to 2,330.30.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by five to three on volume of 1.68 billion shares. On the Nasdaq, decliners topped advancers by 15 to 14 on volume of 2.36 billion shares.

Released data shows that consumer confidence and housing starts were stronger than expected. Sales of existing homes rose unexpectedly in March by 0.3% to a seasonally adjusted annual rate of 6.92 million, against the expected fall to 6.7 million. Treasury prices slipped, pushing the yield on the 10-year note back above 5%. Investors are worried that interest rates will go even higher than expected. However, it is opined that earnings will trump interest rates.

President Bush in a speech about energy, announced a probe of gas gouging and a halt to deliveries to the Strategic Petroleum Reserve, so as to make more supplies available for consumers. This failed to stir the bulls and caused a sell-off in oil stocks such as Exxon Mobil (NYSE: XOM) that closed down $0.46 to $63.95, and Valero Energy (NYSE: VLO)that closed down $2.80 to $66.30.

Shares in AT&T Inc. (NYSE: T) rose 7 cents to $25.60 after the company, formerly known as SBC Communications, posted a 37% increase in first-quarter profit, helped by merger-related savings and strong growth in wireless and broadband services.

Sun Microsystems Inc. (Nasdaq: SUNW) closed up $0.01 or 1% to $4.99 after the computer-hardware giant said the CEO Scott McNealy resigned and named Jonathan Schwartzas its new CEO. Though McNealy will stay on as chairman. The company also reported a wider fiscal third-quarter loss. Shares of Netflix Inc. (Nasdaq: NFLX) pared sharp early gains to close up just 9 cents at $31.15 after the firm swung to a first-quarter profit on a 47% increase in subscriber revenue. The company lifted its 2006 revenue estimate and its year-end subscriber forecast. Shares in JetBlue Airways Corp. (Nasdaq: JBLU) climbed 11.8% to $10.50 after the discount airline posted a narrower-than-expected loss and said it would cut costs to bring it back to profitability.

Shares in Yum Brands Inc. (NYSE: YUM) rose 3.5 % to $51.34 after an 11% gain in first-quarter profit, helped by a growth in the U.S. and a recovery in China. The operator of KFC, Pizza Hut and Taco Bell restaurants also boosted its forecast for the year. The move prompted brokers Piper Jaffray and CIBC World Markets to upgrade the company.

U.S. light crude oil for June delivery fell 45 cents to close at $72.88 a barrel on the New York Mercantile Exchange. Iran, however, remains a concern after a senior official said the country will break all contacts with the United Nations nuclear watchdog if the Security Council opts to impose trade sanctions.

Posted by Manuel Backus to The Markets at 08:32 PM | Permalink

Overnight sell-offs in the Asian markets and a weakening Dollar set the tone of the U.S. Markets today. Positive earnings from Dow component Caterpillar (NYSE: CAT) were overshadowed as investors retreated after the recent rally, finding little comfort in a slide in oil, gas and gold prices.

Today, the Dow Jones industrial average closed down 11.13 or 0.1% to 11,336.32, the Standard & Poor's 500 index closed down 3.17 or nearly 0.2% to 1,308.11, and the Nasdaq composite index closed down 9.48 or 0.4% to 2,333.38.

Market breadth was negative. On the New York Stock Exchange, losers beat winners 19 to 12 on volume of 1.51 billion shares. On the Nasdaq, decliners topped advancers by 19 to 10 on volume of 1.98 billion shares.

It is evident that earnings are still the engine and the market is not overvalued, but the environment we are in is creating pressure. The modest pullback in oil and gas prices is not enough as oil is still above $70 a barrel, gas prices are around $3. Economic reports due this week include the first look at first-quarter economic growth - forecast to surge to around 5% from 1.7% in the fourth quarter. This may steer the market trend in the near future.

The G7, the Group of Seven leading industrialized nations, called on China to allow greater flexibility in the value of its currency. This prompted the Japanese yen to rally against the U.S. dollar. What the G7 is saying is that they really need to get some real domestic demand going in Asia and not just rely on keeping their currencies weak against the dollar to drive exports. A top Chinese official reacted to this by saying the U.S. dollar represents a greater risk to the global economy than the Yuan.

American Express Co. (NYSE: AXP) reported first-quarter earnings in line with expectations as revenue rose 12% to $6.33 billion. However, the stock closed down $0.47 or nearly 1% to $51.78. Some Other shares that closed down include Ford Motors (Nasdaq: F) lost $0.36 or 5% to $6.96, General Motors (NYSE: GM) lost $0.34 to $21.45, and Xerox (NYSE: XRX) closed down $0.80 to $14.00, after the company reported a weaker first-quarter profit and earnings below analysts' estimates. Additionally, the company also issued a fiscal second-quarter earnings forecast that sets the midpoint of the range below analysts' estimates. Shares of TD Ameritrade (Nasdaq: AMTD) closed down $2.09 or over 10% to $19.41, after reporting issuing an earnings forecast below analysts' estimates. Additionally, the CEO and some other executives would be selling 5 to 6 million shares of the company over the next few weeks.

Caterpillar (NYSE: CAT) reported first-quarter net income that soared a stronger than expected 45%. The machinery maker capitalized on higher prices and booming mining and construction markets. However, shares of the company closed down $0.49 to $77.38. The company also lifted its fiscal 2006 earnings per share forecast.

Stock of Cendant Corp. (NYSE: CD) closed up 64 cents at $17.49. Cendant, the operator of Orbitz, CheapTickets.com and Galileo International, said that it might sell the unit after receiving a number of unsolicited bids.

Washington Mutual Inc. (NYSE: WM) said that it is buying Commercial Capital Bancorp Inc. (Nasdaq: CCBI) for $16 a share, or $983 million, to boost its presence in California and its multifamily-housing market. Washington Mutual's stock fell 1.2% to $44.45 while shares of Commercial Capital rallied 11.1% to $15.66. General Electric Co. (NYSE: GE) is in talks to sell its U.K. life-insurance unit to South Africa's Sanlam and could get between 400 million and 500 million pounds ($890 million). However, GE fell 4 cents to finish at $33.93

U.S. light crude oil for June delivery fell $1.84 or 2.5% to settle at $73.33 a barrel on the New York Mercantile Exchange, after OPEC agreed to keep its daily output unchanged. This decline helped ease some of the worries about rising oil prices, but oil at $73 a barrel isn't exactly comforting to investors.

Posted by Manuel Backus to The Markets at 09:26 PM | Permalink

Stocks ended mixed today but higher on the week after the Federal Reserve raised hopes of an end to interest-rate hikes, and the first-quarter earnings season got off to good start with strong results from companies such as Google Inc (Nasdaq: GOOG), Yahoo Inc (Nasdaq: YHOO), United Technologies Corp (NYSE: UTX) and 3M Co (NYSE: MMM). However, broader market ended lower as crude prices spiked above $75 a barrel taking the fuel out of the Nasdaq and S&P on worries about higher energy costs for companies and consumers.

Today, the Dow Jones industrial average closed up 7.68 to 11,350.57. The index is within sight of its all time high of 11,722.98. The broader Standard & Poor's 500 closed down 0.08 to 1,311.38, and the Nasdaq composite index closed down 19.63 or 0.8% to 2,342.92. For the week, the Dow gained 1.9%, the S&P gained 1.7% and the Nasdaq gained 0.7%.

Market breadth was mixed. On the New York Stock Exchange, winners edged out losers by 17 to 15 on volume of 1.6 billion shares. On the Nasdaq, decliners beat out advancers three to two on volume of 2.3 billion shares.

Optimism that earnings have been good and the economy remains strong, can also lead to the Feds having a reason to raise rates. The concern is also that oil is at a all time high. The longer it remains at this price, the more it will erode away some of the growth not only in the economy, but also in corporate profits.

Shares of 3M Co. (NYSE: MMM) rose to a one-year high after the industrial and consumer-products maker lifted its 2006 profit and sales outlook after posting forecast-beating quarterly results. The stock closed up $2.56 or 3% to $85.16. The company has reported strength in its business all around. Other Dow gainers included Alcoa (NYSE: AA) that closed up $0.65 to $35.42, and Exxon Mobil (NYSE: XOM) that closed up $1.03 to $64.95. Shares of Google (Nasdaq: GOOG) zoomed up $22.40 to $437.40, on reporting first-quarter sales and earnings that topped estimates. Many brokerage firms upgraded the stock and raised their earnings targets for the company.

Shares of Merck (NYSE: MRK) down $0.33 or 1% to $34.67, after a jury in a Texas border town found the drug maker liable in the death of a former Vioxx patient. McDonald's Corp. (NYSE: MCD) also dropped 48 cents to $34.60, after posting first-quarter earnings in line with analyst expectations. Shares of Ford Motor Co. (Nasdaq: F) fell 7.9% to $7.32 after the carmaker posted a loss of more than $1 billion amid a sales decline and a turnaround plan that will cost the company up to 30,000 jobs in the coming years. Rival General Motors also closed down $0.88 or 4% to $21.76.

Shares of Dell Inc. (NYSE: DELL) fell to a near a three-year low, down 4.4% down $1.26 to $26.98, after Citigroup downgraded the computer maker two notches to sell from buy, on the belief that a weak growth outlook for its U.S. PC business and end-market deceleration increases the probability of a "margin reset." The stock price target has also been reduced to $28 from $37.

U.S. light crude oil for June delivery rose $1.48 to $75.17 a barrel on the New York Mercantile Exchange after rising as high as $75.35, a new record for a front-month contract. This was a positive for oil stocks, which surged and took the Amex Oil index up 32.58 or 2.5% to 1,185.24.

Posted by Manuel Backus to The Markets at 06:56 PM | Permalink

Strong earnings from General Motors Corp. (NYSE: GM), Merck & Co. (NYSE: MRK) and Altria Group Inc. (NYSE: MO) lifted the Dow Jones Industrial Average to its best level in six years, but the Nasdaq Composite Index fell after disappointing profit outlooks from eBay Inc. (Nasdaq: EBAY) and Juniper Networks. (Nasdaq: JNPR) Oil and gold shares fall despite a retreat from record oil prices.

Today, the Dow Jones industrial average closed up 64.12 or 0.6% to 11,342.89, its highest point since Jan. 20, 2000. The broader Standard & Poor's 500 index closed up 1.53 to 1,311.46, while the Nasdaq composite closed down 8.33 or 0.4% to 2,362.55.

Market breadth was negative. On the New York Stock Exchange, losers edged out winners 17 to 15 on volume of 1.78 billion shares. On the Nasdaq, decliners topped advancers by 16 to 13 as roughly 2.2 billion shares exchanged hands.

On the data front, the Philly Fed diffusion index rose to 13.2 in April from 12.3 in March. This indicates expansion, however, the increase was below expectations. Inflationary pressures increased. The PPI rose to 29.0 from 17.2, while the PRI held steady at 15.4. The jobless claims in the latest week fell more than expected to 303,000 against the expected 310,000. The report suggests more tightening in the labor market. The U.S. index of leading economic indicators fell 0.1% in March; which indicates some slowing in the pace of economic activity through this summer.

There continues to be a battle between rising interest rates and oil prices on the one hand, and positive earnings reports on the other. The slew of positive earnings over the last several days has been good for stocks. While the Dow gained, investors bailed out of networking, Internet and biotech stocks.

The star of the day was General Motors (NYSE: GM) that closed up $2.07 or over 10% to $22.64, after it posted an operating profit in the first quarter. The company earned $152 million, excluding all special items, such as charges related to an agreement to change health care coverage for some retirees and their families. The sales for the company rose 14% in the quarter.

Stock of Merck (NYSE: MRK) closed up $0.60 or 1.7% to $35.00, after reporting higher quarterly profit. The drugmaker also raised its full-year earnings outlook based on an increase in sales by 1%. The other stock to gain on upbeat earnings was Altira Group Inc. (NYSE: MO). The company reported that first-quarter profit that rose 34% from a year earlier, thanks to a tax benefit and strong sales at its Philip Morris USA unit. This resulted in the share gaining 1.6% to $70.04. Stock of Apple (Nasdaq: AAPL) closed up $1.98 or 3% to $67.63, after the company posted earnings that beat expectations. The results are attributable to sales of its iPod portable music players continued to surge. U.S.-listed shares of Nokia Corp. (NYSE: NOK) surged 4.9% to $22.81 after it posted a forecast-beating 21% jump in first-quarter profit on higher sales in India and China.

Amongst losers, eBay (Nasdaq: EBAY) closed down $3.58 or 9% to $36.77, after its profit slipped 3%, and after reiterating its outlook, which some analysts called conservative. Juniper Networks (Nasdaq: JNPR)closed down $2.05 or 10% to $18.25, after the company reported weaker-than-forecast revenue and provided a disappointing outlook. Shares of Intel (Nasdaq: INTC) closed 11 cents at $19.45. While the declared first-quarter results matched analyst expectations, it also issued a June quarter forecast that lagged Wall Street expectations.

U.S. light crude oil for May delivery settled down 22 cents at $71.95 a barrel on the New York Mercantile Exchange.

Posted by Manuel Backus to The Markets at 09:42 PM | Permalink

Solid earnings from a number of companies, indications that the interest hike may end soon and a tech rally helped push the composite to its best close since February 2001. The tech rally boosted the Nasdaq composite to its highest close in move than five years, but had little impact on the broader market. The dampeners were the jump in Treasury yields, rising gold prices and oil at record highs.

Today, the Dow Jones industrial average closed up 14.08 to 11,282.85, the Standard & Poor's 500 index closed up 2.37 to 1,310.02, and the Nasdaq composite index closed up 12.27 or 0.5% to 2,368.41. This is the highest level for the Nasdaq since February 2001.

Market breadth was positive. On the New York Stock Exchange, winners beat losers nine to seven on volume of 1.46 billion shares. On the Nasdaq, advancers beat decliners three to two on volume of 1.81 billion shares.

The Labor Department reported that consumer prices shot up 0.4% in March, outstripping expectations for a 0.3% gain from economists. The core rate, which removes energy and food prices, rose 0.3%, stronger than the 0.2% predicted by the market. This tempered rising expectations, however, comments from Janet Yellen, the president of the San Francisco Federal Reserve, again stressed that the central bank is nearing the end of its rate-hiking campaign.

United Technologies (NYSE: UTX) was the biggest percentage gainer on the blue-chip index. The share closed up $3.94 or 6.6% to $62.84. The company turned in an 18% increase in net quarterly income and lifted its 2006 forecast.

Stock of Yahoo (Nasdaq: YHOO) closed up $2.24 or 7.2% to $33.54, after reporting quarterly earnings that fell from a year ago but met forecasts. The company's profit dropped 22% due to higher expenses and employee stock-option costs. However, sales surged on growth in the Web giant's online-advertising business.

Texas Instruments (NYSE: TXN) closed up $0.67 or 1.3% to $34.67, after reporting higher quarterly earnings and revenue that topped estimates. The chipmaker reported a 42% rise in net income, due to higher demand from the mobile-phone sector. Additionally, it also forecast bullish second-quarter results due to a strong demand.

Dow component International Business Machines Corp. (NYSE: IBM) closed down $1.57 to $81.74. The company unveiled a 22% increase in quarterly profit that beat estimates. However, it also reported quarterly revenue that fell from the prior year and met analysts' expectations. The company has cut costs in its services business and sold its struggling personal-computer business.

Shares of Pfizer (NYSE: PFE) closed down $0.14 to $24.79, after announcing a drop in quarterly revenue that was short of analysts' forecasts. That overshadowed the drugmaker's higher quarterly earnings that beat analysts' forecasts. The company has suffered a loss of market exclusivity on several key products.

Shares of Motorola Inc. (NYSE: MOT) tumbled 6.6% down $1.63 to $22.49 after the company posted earnings that fell shy of analysts' expectations. Concern among some industry watchers over a decline in the average selling price of its phones also weighed on sentiment.

In another interesting news, shares of Vitesse Semiconductor (Nasdaq: VTSS) closed down $0.62 or 20% to $2.49, after stating that it is investigating the timing and accounting of stock option grants. The chipmaker also said it is putting its CEO, CFO and an executive vice president on leave related to the investigation. Stock of Coca-Cola Co. (NYSE: KO) rose 39 cents to stand at $41.69. The soft-drink giant had a 10% gain in quarterly net income, although revenue was flat. J.P. Morgan Chase & Co. (NYSE: JPM) added 2 cents to $42.62. The investment bank had a 35% increase in quarterly net income, although retail banking profits were hit by mortgage weakness. Honeywell Inc. (NYSE: HON) reported earnings and sales that outstripped expectations on a strong performance by its aerospace group. However, the stock was down 63 cents at $43.53.

Crude-oil futures ended at a record level, above $72 a barrel, after the weekly supply data showed a drop in U.S. gasoline inventories. The benchmark U.S. light crude for May delivery jumped 82 cents to settle at $72.17 a barrel on the New York Mercantile Exchange. Oil prices have been rising steadily in recent weeks amid worries about Iran's nuclear capability.

Posted by Manuel Backus to The Markets at 09:08 PM | Permalink

Hopes of an end to the rise in short-term interest rates helped the market shrug off a spike in crude-oil prices to a record high above $71 a barrel. Markets closed after putting in their best one-day gain in a year. Stocks raced ahead on signs from the minutes of the last meeting that the Federal Reserve's rate hiking campaign could be close to an end.

Today, the Dow Jones industrial average closed up 194.99 to 11,268.77. This is the biggest one-day point gain in nearly a year. The broader Standard & Poor's 500 closed up 22.32 or 1.7% to 1,307.65, and the Nasdaq composite index closed up 44.98 or almost 2% to 2,356.14.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by nearly four to one on volume of 1.84 billion shares. On the Nasdaq, advancers topped decliners seven to three as 2.25 billion shares exchanged hands.

Market gains accelerated after the release of the minutes of the March meeting of the Federal Open Market Committee, the Fed's interest-rate setting body. It clearly brought out that most members thought that the end of the tightening process was likely to be near and some also expressed concerns about the dangers of tightening too much, given the lags in the effects of policy. Investors have been worrying that rising inflationary pressure could cause the central bank to boost short-term interest rates for longer than had been previously expected. This is a welcome fundamental positive for the stock market.

It is apparent that the market is ignoring the price of oil, Iran and the price of gold at the moment. Investors are focusing on the good and ignoring the bad. In the federal funds futures market, investors were pricing in a 28% chance of a rate hike in June, down from 54% earlier. Positives include expectation that inflation would remain well contained, energy prices to stabilize, and moderation in house prices.

In data news, the latest Producer Price Index showed a larger-than-expected 0.5% gain last month due mainly to rising gas prices. However, a 0.1% increase in core inflation, which excludes food and energy prices, was smaller than the 0.2% gain expected by economists. Investors breathed a big sigh of relief on the encouraging reading on wholesale prices, but soaring energy prices and a tight labor market remain inflation risks. According to the Commerce Department, housing starts fell 7.8% in March. The decline was larger than expected and shows a weakening housing market.

Shares of Micron Technology (Nasdaq: MU) soared 6%, up $0.91 to $16.03, after J.P. Morgan upgraded the stock. This was one of the many chip stocks that rose and took the Philadelphia Semiconductor Index to close up 17.02 or 3.4% to 517.46. Stock of Merrill Lynch (NYSE: MER) closed up $0.92 to $79.38, after the company reported higher-than-expected quarterly earnings. While the company reported that first-quarter net income slipped 61% on a previously announced charge to account for stock options paid as compensation to employees, it reported a record $8 billion in quarterly revenue. Stock of Boston Scientific (NYSE: BSX) closed up $0.26 to $21.74, as it is expecting to complete its purchase of Guidant this week.

Johnson & Johnson (NYSE: JNJ) closed up $0.48 to $58.13, after reporting higher first-quarter earnings. The sales of medical devices and a break up fee from its failed attempt to buy Guidant (NYSE: GDT) offset weaker prescription drug sales. The revenue fell slightly shy of Wall Street estimates, due largely to a drop in sales at its pharmaceutical division

U.S. light crude for May delivery rose 95 cents to $71.35 a barrel on the New York Mercantile Exchange, after reaching an intraday record of $71.60. Oil prices have been rising steadily in recent weeks amid worries about Iran's nuclear capability.

Posted by Manuel Backus to The Markets at 09:28 PM | Permalink

Oil prices topped $70 a barrel and this raised concerns about high energy costs fueling inflation and hurting corporate profits. The rise in other commodities such as gold and silver overshadowed strong quarterly results from Citigroup Inc (NYSE: C). This unsettled investors ahead of a busy week and has the S&P 500 and the Dow Jones Industrial Average fall to their worst levels in more than a month.

Today, the Dow Jones industrial average closed down 63.87 or 0.6% to 11,073.78, the broader Standard & Poor's 500 closed down 3.79 or 0.3% to 1,285.33, and the tech heavy Nasdaq composite closed down 14.95 or 0.6% to 2,311.16.

Market breadth was negative. On the New York Stock Exchange, losers topped winners nine to seven on volume of 1.27 billion shares. On the Nasdaq, decliners beat advancers by close to 17 to 12 on volume of roughly 1.81 billion shares.

The rise in oil and gold prices weighed on market sentiment, reviving fears about inflation and its impact on the Fed's interest-rate hiking campaign. Additionally, Moskow, president of the Federal Reserve Bank of Chicago, said inflation is near the "upper end of the range" and that he feels is "consistent with price stability. While interest rate remains an issue, it is apparent that earnings projections will be critical to the market's ability to move higher.

In data news, the Empire State Manufacturing index fell to 15.8 in April from a revised 29.0 in March. Economists had been expecting the index to fall to 24.5 from the initial estimate last month of 31.2. The U.S. housing market index fell to 50 in April, the lowest level since the recession ended in November 2001. This indicates builders' views about the market is evenly balanced between good and bad. On a more positive note, net foreign capital inflows into the U.S. increased to $86.9 billion in February. This can sooth the worry that foreigners are backing away from U.S. instruments.

It is opined that earnings may not prove much of a catalyst going forward. Investors will also be eyeing the March readings on consumer prices and housing starts and building permits.

Amongst the losers today included Advanced Micro Devices (NYSE: AMD) that lost $1.20 to $30.60, Broadcom (Nasdaq: BRCM) closed down $1.43 to $42.68, and Intel (Nasdaq: INTC) closed down $0.26 to $19.19. General Motors (NYSE: GM) closed down $0.36 to $20.04, General Electric (NYSE: GE) lost $0.60 to $33.29, Home Depot (NYSE: HD) closed down $0.74 to $40.38, and Hewlett Packard (NYSE: HPQ) closed down $0.59 to $32.03.

Citigroup (NYSE: C) closed up 30 cents at $48.35. The banking giant's first-quarter net income rose 4% on strong results in its global consumer banking and corporate investment banking operations that beat analysts' forecasts. The bank also announced a new share-buyback program totaling $10 billion.

Shares of Charles Schwab Corp. (Nasdaq: SCHW) closed down 1.4% at $17.34. The discount brokerage reported first-quarter earnings in line with analyst expectations, as client trading grew in response to rising markets and fees grew off a higher asset base. However, this did not meet market expectations.

Stock of Halliburton (NYSE: HAL) rose 2.4% to $78.96. Its KBR Inc. subsidiary has filed to raise up to $550 million through an initial public offering of stock. This has had a positive impact on the stock. Strong quarterly earnings from Eaton Corp. (NYSE: ETN) also boosted sentiment.

TiVo (Nasdaq: TIVO) closed up $0.60 over 7% to $8.65, after the financial weekly Barron's said the maker of digital video recorders could be a candidate for takeover. This is likely to have a continued positive effect

U.S. light crude oil for May delivery rose $1.08 to settle at $70.40 a barrel on the New York Mercantile Exchange. Oil prices have been rising steadily over the last week or two amid worries about Iran's nuclear capability.

Posted by Manuel Backus to The Markets at 10:25 PM | Permalink

The Nasdaq Composite scored a strong gain, as weakness in shares of General Electric (NYSE: GE) and McDonald's limited (NYSE: MCD) gains on the Dow Jones Industrial Average. Dampeners such as rise in long-term bond yields to multi-year highs, gold prices hitting $600, and a spike in crude prices that took oil close to $70 a barrel kept the markets subdued. For the week, the Dow managed modest gains, while the S&P 500 and the Nasdaq both ended lower.

Today, the Dow Jones industrial average closed up 7.68 to 11,137.65, the broader Standard & Poor's 500 closed up 1.00 to 1,289.12, and the tech-fueled Nasdaq composite closed up 11.43 or 0.5% to 2,326.11. Stocks ended mixed on the week, with the Dow gaining 0.2%, as the S&P 500 fell 0.5% and the Nasdaq dropped 0.6%

Market breadth was mixed. On the New York Stock Exchange, losers topped winners by 17 to 14 on volume of nearly 1.24 billion shares. On the Nasdaq, advancers beat decliners by 17 to 11 on volume of 1.55 billion shares.

The combination of high energy prices and rising long-term rates definitely remains a concern. There has been some cheer on the earnings front from a range of companies including GE (NYSE: GE), Vulcan Materials (NYSE: VMC), Lam Research (Nasdaq: LRCX) and McDonald's (NYSE: MCD). Donald Kohn, a member of the Federal Reserve board, said that the top priority for the Federal Reserve is to make sure that inflation stays well anchored, because the economy's strength is eating into the country's unused labor and factory capacity. He however, declined to predict how many more rate hikes would be needed to keep prices in check.

The Commerce Department stated that U.S. retail sales increased 0.6% in March, with unexpected strength in automotive and building-materials sales. Economists had been looking for sales to rise 0.4%. Excluding the 1.6% rise in auto sales, retail sales increased 0.4%, as expected. Prices of goods imported to the U.S. surprised economists by falling 0.4% in March, the third decline in the past four months. Economists had been expecting import prices to rise 0.1%. Initial applications for U.S. state unemployment benefits rose by a slightly higher-than-expected 12,000 to 313,000 claims in the week ended April 8. However, the four-week average of new claims, fell by 1,500 to 307,500. U.S. business inventories, meanwhile, were unchanged in February, while sales dropped 0.6%. It was the largest drop in sales since a 1.5% decline in April 2003.

Stock of IBM (NYSE: IBM) closed up $1.23 or 1.5% to $81.98, on bets that its earnings next week will be strong. Lehman Brothers boosted its first-quarter earnings-per-share target on IBM, saying the company should benefit from cost-cutting and other factors. The brokerage also boosted IBM's 12-month price target. Also, Merrill Lynch said that IBM could report earnings per share that top estimates.

On a slide, shares of McDonald's Corp. (NYSE: MCD) closed almost 1% lower at $34.85. However, the company reported its U.S. March same-store sales rose 6.6%, and forecasted first-quarter earnings of 49 cents a share, in line with market expectations.

Also on the earnings front, Advanced Micro Devices Inc. (NYSE: AMD) swung to a first-quarter profit after it spun off its unprofitable memory-chip unit and saw surging sales of its chips used in personal computers and corporate servers. However, based on reported outlook, the shares closed down $3.62 or 10.2% to $31.80. Its rival Intel closed up $0.33 or 1.7% to $19.45.

Shares of SanDisk (Nasdaq: SNDK) closed up $2.43 or 4% to $61.90, on news that it will be added to the S&P 500 after the close of trading on April 19. It has also been reported that the company is making an unsolicited bid for rival flash memory maker Lexar Media (Nasdaq: LEXR). Stock of Lexar Media closed $0.38 to $9.17.

A good gainer today was Lam Research Corp. (Nasdaq: LRCX) that rose 4.7% to $46.75. The company has reported a 45% jump in quarterly profit as sales of new technology products boosted its revenue numbers.

General Electric (NYSE: GE) reported quarterly earnings that rose from a year ago and met analysts' estimates, thanks to solid orders across the diversified company. However, the company issued 2006 earnings-per-share guidance in a range that sets the midpoint below analysts' forecasts. That sent shares of General Electric Co down $0.57 or 1.6% to $33.89.

U.S. light crude oil for May delivery rose 70 cents to settle at $69.32 a barrel on the New York Mercantile Exchange. Oil prices have risen for the last two session on worries about supply disruptions from Iran, after the country's president confirmed it has produced enriched Uranium for the first time.

Posted by Manuel Backus to The Markets at 07:50 PM | Permalink | Comments (1)

Blue chips led a modest rally with Boeing Co. (NYSE: BA) & General Motors Corp. (NYSE: GM) boosting the Dow Jones Industrial Average. A larger-than-expected decline in the U.S. trade deficit lifted overall sentiment and allowed investors to shrug off surging bond yields, a further run up in commodity prices, and nagging worries about Iran.

Today, the Dow Jones industrial average closed up 40.34 or 0.4% to 11,129.97, the broader Standard & Poor's 500 index closed up 1.55 or 0.1% to 1,288.12, and the Nasdaq composite closed up 4.33 or 0.2% to 2,314.68.

Market breadth was positive. On the New York Stock Exchange, winners edged losers by a narrow 16 to 15 margin on volume of 1.39 billion shares. On the Nasdaq, advancers topped decliners by more than eight to seven on volume of about 1.56 billion shares.

Upbeat company news offset worries about oil prices, interest rates and Iran's nuclear capabilities. Optimism about the first-quarter earnings has helped keep stocks afloat, as investors are anticipating good earnings. The market drew encouragement from news that the trade gap had narrowed in February and from several solid earnings reports. What also helped the market was that President Bush described as "wild speculation" news stories that the administration is pondering a potential military strike against Iran.

On the data front, the U.S. trade deficit improved in February after surging to a record level in January, the Commerce Department reported. The gap narrowed 4.1% to $65.7 billion in February, an improvement that was a little better than the average estimate as forecast by many economists.

Shares of Boeing Co. (NYSE: BA) rose 3.3% to $83.21. The company has signed a general purchase agreement with China Aviation Supplies Import & Export Group for 80 Boeing 737 airplanes. Additionally, Morgan Stanley raised its price target on Boeing to $110 from $80. They opine that the stock even has the potential to reach $140 in three years.

Stock of General Motors Corp. (NYSE: GM) closed up 4.2% at $20.03 after a senior executive expressed confidence that workers at Delphi Corp. (OTC: DPHIQ.PK), will not strike. Also, GM is already shifting work from Delphi to other suppliers in preparation for its planned exit from certain business lines. Shares of DaimlerChrysler AG (NYSE: DCX) fell 4 cents to $57.47, after the company announced that its 2006 profit should rise on a combination of job cuts and new models at both its Chrysler and Mercedes divisions. The company also said it may trim its stake in majority Airbus owner EADS to 15% from 22.5%.

Shares of Genentech Inc. (NYSE: DNA) fell 1.2% to $80.71. The biotech company posted a 48% rise in first-quarter profit, due largely to better-than-expected sales of its cancer drugs, Herceptin and Avastin. However, there has been disappointment, over sales of Rituxan, that was originally approved to treat non-Hodgkin's lymphoma but has also been given the green light for the treatment of rheumatoid arthritis.

Forecast beating results from Circuit City Stores (NYSE: CC) made the shares rise 8.3% to $26.65. The consumer-electronics retailer posted forecast-beating results, that were helped by solid sales of flat-panel televisions, notebook computers and portable music devices.

The latest U.S. supply data shows a bigger-than-expected drawdown in domestic gasoline and distillate stockpiles, along with a rise in crude inventories. While concern persist over Iran's determination to expand its nuclear program in defiance of the U.S. and its allies. However, U.S. light crude oil for May delivery fell 36 cents to settle at $68.62 a barrel on the New York Mercantile Exchange, not far from record highs of over $70 a barrel.

Posted by Manuel Backus to The Markets at 06:24 PM | Permalink

Inflation worries precipitated through interest rates concerns, high oil prices and political tensions in the Middle East, lead the Dow Jones Industrial Average and the S&P 500 Index to hit one-month lows. These worries overshadowed a solid kickoff to the earnings season following strong quarterly results from blue-chip Alcoa Inc (NYSE: AA).

Today, the Dow Jones industrial average closed down 51.70 or 0.5% to 11,089.63, the broader Standard & Poor's 500 index closed down 10.05 or 0.8% to 1,286.57, and the Nasdaq composite index closed down 22.92 or 1% to 2,310.35.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by 23 to 8 on volume of roughly 1.58 billion shares. On the Nasdaq, decliners topped advancers by 22 to 7 on volume of 2.13 billion shares.

Reports that Iran has succeeded in enriching uranium, a key stage in the development of nuclear technology, weakened the market. While we have had pretty good economic fundamentals, the flip side has problems such as -- Iraq, Iran, the price of oil and how high is up for interest rates. Despite the mild reaction to Alcoa's (NYSE: AA) earnings, strong corporate results should be a positive catalyst going forward.

According to a short-term energy outlook released by the Energy Information Administration, retail gasoline prices are expected to rise 25 cents, or 13.7%, this summer to average $2.62 per gallon. Pump prices are likely to be pressured by higher crude prices and the phase-out of methyl tertiary butyl ether, known as MTBE, as the leading gasoline additive. This may have wide ranging repercussions.

Shares of Bausch & Lomb Inc. (NYSE: BOL) tumbled 14.6% to close down $8.41 to $49.03. The contact lens maker has halted shipping its ReNu contact lens solution after some users suffered serious eye infections. Analysts speculate the move could hurt Bausch's other product lines.

Shares of Merck (NYSE: MRK) closed down $0.36 to $34.06, lower after a jury said the company deliberately misrepresented the dangers of its withdrawn painkiller Vioxx to federal regulators, and ordered the drug maker to pay $9 million in punitive damages to a man who had a heart attack after taking Vioxx. Although the stock was not much lower, the public awarding of punitive damages is a dampening in terms of overall market sentiment.

The star was Alcoa (NYSE: AA) that posted results that soundly beat estimates. The company earned 69 cents a share versus the estimated 51 cents. Shares of Dow component Alcoa climbed 3.8% to close up $1.26 to $34.09. The results are driven by strong demand from the commercial transportation and aerospace sectors.

Mobile-handset makers received a boost after Nokia Corp. (NYSE: NOK) reported an unexpected rise in average selling prices for the first quarter. U.S. listed shares of Nokia closed up 3.9% at $0.79 to $21.19.

Stock of General Motors Corp. (NYSE: GM) fell 18 cents to $19.22 after the automaker said that it would sell its 7.9% stake in Isuzu Motors to the Japanese company's strategic partners and major shareholders for about $300 million. The cash proceeds would go toward turning around North America operations, financing growth initiatives and strengthening the balance sheet.

Shares of Micron Technology Inc. (Nasdaq: MU) rose 1.3% to $15.10 after booking a 64% rise in second-quarter profit from year-ago levels. Revenue, however, declined to $1.23 billion from $1.31 billion. This reflects a continuing drop in the average selling price of chip-memory products

Oil prices seesawed through the day but stayed near all-time highs of over $70 a barrel as investors weighed the odds of supply disruptions from Iran, one of the world's biggest exporters of crude. U.S. light crude oil for May delivery gained 24 cents to settle at $68.98 a barrel on the New York Mercantile Exchange.

Posted by Manuel Backus to The Markets at 08:31 PM | Permalink

Market sentiment darkened by interest-rate concerns and a rise in crude-oil futures to a nine-week high. Investors await the first-quarter earnings season to kick off with Alcoa Inc. (NYSE: AA) results that will be declared after the close. Both, blue chips as well as techs slipped from their high pedestal.

Today, the Dow Jones industrial average closed up 21.29 or 0.2% to 11,141.33, the broader Standard & Poor's 500 closed up 1.12 to 1,296.62, and the Nasdaq composite closed down 5.7 or 0.3% to 2,333.3.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by a margin of three to two on volume of 1.3 billion shares. On the Nasdaq, decliners topped advancers also by about three to two as 1.8 billion shares exchanged hands.

The two main wet blankets on the mood of investors were the price of oil and bond yields. While treasury prices gained modestly, lowering the yield on the benchmark 10-year note to 4.96%, the cost of crude ran close to $69. Tomorrow, retails sales results for March are slated for release and the investors will be looking for confirmation that consumers are still spending at levels necessary to support solid economic growth.

The big news is that the world's largest retailer, Wal-Mart Stores Inc. (NYSE: WMT) is moving to cut back inventories this year. The discount retailer is credited with having one of the best inventory management systems in the business as it tries to keep goods flowing to its 3,800 Wal-Mart stores in the United States. This can have an adverse effect on all retailers.

Shares of Walt Disney Co. (NYSE: DIS) added almost 1% to $27.79 after a Wall Street Journal reported that the entertainment giant would offer some of the newest and most popular programs from its ABC television network for free over the Internet. This would include episodes of shows including "Desperate Housewives" and "Lost". This move is likely to have a positive impact on the stock.

The first off the block is Aluminum producer Alcoa (NYSE: AA). Stock of Alcoa closed up $0.33 to $32.83. Analysts surveyed by Thomson First Call are looking for the Dow component to report earnings of 51 cents a share on revenue of $7.2 billion.

Some banking stocks in the news included, Bank of New York (NYSE: BK) that closed down $1.83 or 4% to $35.00, on news of that the company was selling its retail banking division. J.P Morgan Chase (NYSE: JP) closed up $0.20 to $41.90, on news that it would acquire The Bank of New York's branches in exchange for its corporate trust operations and $150 million.

U.S. listed shares of Swiss biotech firm Serono (NYSE: SRA) tumbled almost 10.4% to $15.81 after it gave up on its plan to sell itself and said that it would consider making acquisitions of its own.

Concern over Western tensions with Iran also sent crude futures higher as traders worried about a potential disruption of supplies out of the oil-rich nation. Crude for May delivery closed up $1.35 at $68.74 a barrel, on the New York Mercantile Exchange. This is just a few dollars shy of the record trading high of $70.85 set in late August.

Posted by Manuel Backus to The Markets at 05:57 PM | Permalink

A strong employment report made the stocks end lower as interest-rate fears once again gripped investors. This wiped out most of the week's gains and kicked off the second quarter on a muted note. Inflationary worries sapped blue-chip stocks, as investors worried about bond yields near 4-year highs, gold near a 25-year high and oil prices near $68 a barrel.

Today, the Dow Jones industrial average closed down 96.46 to 11,120.04, the Standard & Poor's 500 index closed down 13.54 to 1,295.50, and the Nasdaq composite closed down 22.15 to 2,339.02. For the week, the Dow and the S&P gained about 0.1% each while the Nasdaq remained almost flat.

Market breadth was negative. On the New York Stock Exchange, losers topped winners by more than four to one on volume of 1.52 billion shares. On the Nasdaq, decliners beat advancers by over two to one on volume of 2.03 billion shares.

Treasury prices fell again and the yield on the benchmark 10-year note rose up to 4.98% -- a fresh four-year high and well within sight of the key 5% level. This allowed capital flows out of equities into the bond market. Investors reflected on the interest rate environment and decided to take profits to make the stocks slide. Basically, people are asking themselves why they should be in the stock market if they can get a 5% return safely in bond.

The Labor Department reported the U.S. economy created 211,000 jobs in March, more than the 187,000 expected by economists. The unemployment rate ticked lower to 4.7%. There was wage growth of 0.2% for the month versus the 0.3% expected. Wage inflation is an aspect of the economy the Fed is watching closely when it makes its decision on interest rates. Since we are creating a lot of jobs and a lot of jobs will create a tight labor market and a tight labor market will cause wage price pressure. That combination of factors does not make the Fed stop at 5%. This is what worries investors.

In other data, inventories at U.S. wholesalers increased 0.8% in February while sales were flat. Inventories had been expected to rise 0.5%, according to many economists.

Research In Motion (Nasdaq: RIMM) closed down $4.60 or 5.5% to $79.78, after it issued current-quarter forecasts for earnings, sales and subscriber growth that fell short of Wall Street forecasts. The maker of the Blackberry wireless device also reported in-line earnings late Thursday, but investors focused on the warning. The company also plans to spend more on sales, marketing and product development.

Stock of Ford Motor Co. (Nasdaq: F) fell 5 cents to $7.60 on news that its president and chief operating officer, Jim Padilla, will retire after 40 years with the automaker. Chief Executive Bill Ford will assume Padilla's responsibilities.

While there was general downslide with Hewlett Packard (NYSE: HPQ) closing down $0.73 to $33.37, AIG (NYSE: AIG) losing $1.06 to $64.38, IBM (NYSE: IBM) sliding $1.33 to $82.48, and Pfizer (NYSE: PFE) closing down $0.40 to $24.69. One bright spark was Starbucks (Nasdaq: SBUX) that closed up $0.41 to $37.86, after reporting a stronger-than-expected jump in March same-store sales.

U.S. light crude oil for May delivery fell 55 cents to settle at $67.39 a barrel on the New York Mercantile Exchange.

Posted by Manuel Backus to The Markets at 12:45 AM | Permalink

Nervousness ahead of the upcoming release of the March employment report resulted in a mixed day. Blue chips slipped on worries about inflation amid Treasury bond yields near 4-year highs, gold near a 25-year high and oil prices near $68 a barrel. On the other hand, Merck & Co. (NYSE: MRK) declined after a legal setback over its painkiller Vioxx.

Today, the Dow Jones industrial average closed down 23.05 or 0.2% to 11,216.50, the broader Standard & Poor's 500 index closed down 2.52 or 0.2% to 1,309.04, and the Nasdaq composite index closed up 1.42 to 2,361.17, squeaking out a fresh five-year high.

Market breadth was negative. On the New York Stock Exchange, losers topped winners 18 to 13 on volume of 1.57 billion shares. On the Nasdaq, decliners narrowly topped advancers by 15 to 14 on volume of nearly 2.18 billion shares.

It is evident that investors are taking a short-term focus right now that is very data dependent. This stems from the fact that Federal Reserve chief Ben Bernanke has made it clear that the central bank's policy will be data dependent going forward. While energy and commodity prices have been high for a long time, they have not impacted the economy. At this point, the dips in the market are positive, and investors are using them as a buying opportunity.

The March employment report is expected to show that the economy has created around 187,000 jobs, with the jobless rate expected to remain unchanged at 4.8%. The Labor Department report showing an unexpected fall in weekly jobless claims serves to reinforce the view that the March jobs report may come in stronger than expected.

A surprising drop in weekly jobless claims resulted in a fall in Treasury prices with the corresponding rise in yields. This pushed the yield on the benchmark 10-year note up to around 4.89% from 4.84%.

A New Jersey jury late Wednesday found that the Merck (NYSE: MRK) was
liable in the heart attack of one man who took the painkiller Vioxx, and awarded him $4.5 million. The jury ruled that Merck was not liable in the heart attack of a second man who took Vioxx. All this resulted in stock of Merck closing down $1.15 or 3.2% to $34.84.

Shares of 3M (NYSE: MMM) closed up $3.92 or 5.1% to $81.38, after the company boosted its first-quarter earnings per share and revenue forecast. The diversified manufacturer attributed the strong quarter to strength in a variety of its businesses.

However, a number of retailers reported disappointing March sales, blaming the shift of the Easter holiday to April from March. But the weak results didn't have much impact on retail stocks. Aeropostale (NYSE: ARO) closed up $1.85 to $30.70, and American Eagle Outfitters (Nasdaq: AEOS) closed up $1.19 to $30.70, despite posting weaker-than-expected results. Shares of Costco (Nasdaq: COST) closed up $1.45 or 2.6% to $56.59, on reported 7% increase in monthly sales.

U.S. light crude oil for May delivery rose 87 cents to settle at $67.94 a barrel on the New York Mercantile Exchange.

Posted by Manuel Backus to The Markets at 09:57 PM | Permalink | Comments (1)

Optimism over the upcoming first-quarter earnings season, and strength in the technology sector lifted the S&P 500 and the Nasdaq Composite to their best levels in about five years. Tech shares got a boost from Apple Computer (Nasdaq: AAPL), and the investors saw positives in the data figures.

Today, the Dow Jones industrial average closed up 35.70 or 0.3% to 11,239.55, the broader Standard & Poor's 500 index closed up 5.63 or 0.4% to 1,311.56, to end the session at its highest since May 21, 2001.The Nasdaq composite index closed up 14.39 or 0.6% to 2,359.75, to post its best close since Feb. 16, 2001.

Market breadth was positive. On the New York Stock Exchange, advancers beat decliners by a margin of five to four on volume of 1.6 billion shares. On the Nasdaq, winners topped losers by 16 to 13 as 2 billion shares exchanged hands.

Initially, the investors were scared off after a weekly supply report that showed a decline in U.S. gasoline inventories. But easing in treasury yields lent support to sentiment, and top Fed officials said that the central bank's rate hiking campaign may be nearing an end. Investors are eagerly awaiting the employment report, since with the ISM services and manufacturing reports, it gives the first solid news about the economy. Economists expect the report to be upbeat with the addition of 190,000 jobs in March.

In the afternoon, investors took in an upbeat reading on the services sector of the economy. The Institute for Supply Management's index rose to 60.5 from 60.1 in February, against the expected slide to 59. Another report from the National Association of Realtors showed a 16% increase in the sale of second homes in 2005 to a record 39.9% of all U.S. existing home sales. It also forecast that sales of vacation homes are likely to remain healthy in 2006

Apple (Nasdaq: AAPL) rallied 9.9% to close up $6.04 to $67.21. The company unveiled Boot Camp, a software application that enables its Mac computers based on Intel Corp. (Nasdaq: INTC) processors to run Microsoft Corp.'s (Nasdaq: MSFT) Windows XP operating system. Stock of Microsoft rose 10 cents to $27.74 as Intel's stock gained 18 cents to $19.48.

Stock of Morgan Stanley (NYSE: MS) tacked on 4 cents to $64.31. The company's shareholders backed a proposal that requires the bank to get stockholder approval for so-called golden-parachute pay packages for departing executives.

DaimlerChrysler (NYSE: DCX) has agreed to sell a quarter of its 30% stake in European Aeronautic Defence & Space Co for about 2 billion euros. The stock rose 1.6% at $60.04. Monsanto (NYSE: MON) closed down 47 cents to $85.41, after reporting higher seed sales for its key second quarter, leading to 18% growth in net income ahead of the planting season for corn, soybean and cotton crops in the United States. The company also affirmed a 2006 earnings outlook toward the upper end of its previously announced range of $2.35 to $2.50 a share.

Shares of Maxtor (NYSE: MXO) closed down $0.17 or about 2% to $9.91. The company is being bought by larger rival Seagate Technologies (NYSE: STX). It warned that its first-quarter earnings loss will be wider than it initially forecast, due to the acquisition. Stock of Seagate closed down $0.44 to $27.25 in the aftermath.

U.S. light crude oil for May delivery rose 84 cents to settle at $67.07 a barrel on the New York Mercantile Exchange.

Posted by Manuel Backus to The Markets at 09:44 PM | Permalink

Optimism over the upcoming first-quarter earnings season helped propel the Nasdaq Composite to its best level in more than five years. The most notable gainer was Citigroup (NYSE: C) after getting a green light to pursue any large mergers or acquisitions. Lower oil prices and news of sales and potential mergers added cheer to the party.

Today, the Dow Jones industrial average closed up 58.91 or 0.5% to 11,203.85, the broader Standard & Poor's 500 index closed up 8.12 or 0.6% to 1,305.93, and the Nasdaq composite index closed up 8.62 or 0.4% to 2,345.36. This is a fresh 2006 high and its highest level since February 2001.

Market breadth was positive. On the New York Stock Exchange, advancers edged decliners by 19 to 13 on volume of 1.51 billion shares. On the Nasdaq, winners narrowly beat losers 15 to 14 on volume of 2.05 billion shares.

While the market today was drive by company news, stocks could become vulnerable as key economic data such as the Job Report due on Friday is released. Investors will be scouring the March employment report for both job growth and evidence of wage pressure. The first-quarter earnings reporting period will unofficially starts on Monday, when Alcoa release its results.

Shares of 3M (NYSE: MMM) gained 1.5% up $1.16 at $77, after the diversified industrial group said it was seeking strategic alternatives for its branded pharmaceutical business. Citigroup (NYSE: C) gained 1.7% to close up $0.80 to $48.21, after the Federal Reserve Bank of New York lifted an year long ban on new acquisitions. This indicates that the bank has made strides in tightening internal controls. The ban came into operation in March 2005 as Citigroup was acquiring First American Bank. Some other bank stocks climbed as well, including JP Morgan up $0.68 to $42.27, and American Express up $0.80 to $53.23.

Stock of Merck (NYSE: MRK) closed up $0.07 to $35.48, after saying that first -quarter earnings will top estimates, due to strong sales of its Zocor cholesterol drug and lower-than-expected costs. It also reaffirmed its 2006 full-year outlook.

Computer Sciences Corp (NYSE: CSC) was up 4.4% at $59.80, on news that the computer services company is considering to explore its strategic options, including a potential sale, citing expressions of interest from unnamed parties. The company has also outlined a restructuring program involving the elimination of a total of 5,000 jobs.

Stock of Apple Computers (Nasdaq: AAPL) closed down $1.48 or 2.4% to $61.17, after Lehman Brothers cut its 12-month price target to $73 from $80. It expects the stock to remain range bound for the time being. Shares of General Motors Corp. (NYSE: GM) fell 3% to $19.54 as analysts gave a cautious assessment of the carmaker's outlook following the sale of a majority stake in its GMAC financing arm. Power Technologies (OTC: PWTC) closed down $2.88 to $10.40, after stating that first-quarter revenue would miss forecasts due to weaker-than-expected demand. Likewise, Check Point Software technologies (Nasdaq: CHKP) too closed down $1.07 to $18.76, after issuing a first-quarter earnings and revenue outlook that fell shy of analysts' forecasts.

Crude for May delivery ended down 51 cents at $66.23 as traders locked in gains across the commodities markets after a series of recent highs.

Posted by Manuel Backus to The Markets at 11:25 PM | Permalink