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 Post subject: February 17th Wednesday 2010 Emini TF ($TF_F) points +7.00
PostPosted: Fri Feb 19, 2010 2:32 am 
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Stocks Extend Gains
By Alexandra Twin, senior writer
February 17, 2010: 5:46 PM ET

NEW YORK ( -- Stocks gained Wednesday as investors considered a better-than-expected housing report, a mixed forecast from the Federal Reserve and some upbeat company news.

The dollar firmed up, hitting dollar-traded oil, gold prices and stocks. Treasury prices plunged.

The Dow Jones industrial average (INDU) rose 40 points, or 0.4%. The S&P 500 index (SPX) added 5 points, or 0.5%. The Nasdaq composite (COMP) edged up 12 points, or 0.6%.

Stocks clung to modest gains throughout the session Wednesday as investors weighed the day's news against the headwinds that have punished stocks year-to-date.

After the close, Hewlett-Packard (HPQ, Fortune 500) reported higher quarterly earnings and revenue that topped expectations. Shares gained 1% in extended-hours trading.

Stocks rallied Tuesday after Merck (MRK, Fortune 500) and Barclays (BCS) released better-than-expected results and commodity prices rose. The Dow gained 1.7%, or 170 points, for its biggest one-day point gain since Nov. 9.

But Tuesday's advance was an exception, and stocks have had a rough start to the year, with the Dow, Nasdaq and S&P 500 posting declines for four of the last five weeks.

Worries about China limiting bank lending and the threat of Greece's debt crisis expanding have dragged on stocks. European officials have sought to soothe worries about Greece and other euro zone countries lately, but broader concerns about the strength of any recovery have continued to worry investors.

"I think the market is struggling with higher expectations going into 2010," said Alan Lancz, president at Alan B. Lancz & Associates.

Lancz said that the China and euro debt issues took investors by surprise and that while quarterly profit reports have been good, the economic news has been mixed.

"All of this has brought to light that while the economic recovery is going to be good, its not going to be as strong as had been anticipated," Lancz said. "Stock valuations are going to need to catch up to the economy.

In 2009, the Dow gained 18.8%, the S&P 500 rose 23.4% and the Nasdaq gained 44%. But the gains were even bigger off the multi-year lows of last March, with the Dow rising 59%, the S&P 500 rising 65% and the Nasdaq rising 79%.

Thursday brings the weekly jobless claims report from the Labor Department, the index of leading economic indicators (LEI) from the Conference Board, the January Producer Price Index (PPI) and the Philadelphia Fed index.

In addition, Wal-Mart Stores (WMT, Fortune 500) reports results before the start of trading. The retailer is expected to have earned $1.12 per share versus $1.03 a year earlier.

Fed minutes: The central bank released the minutes from its last policy meeting in the afternoon, as well as its revised economic forecast. Chairman Ben Bernanke and the other officials said unemployment should decline only modestly over the next few years, keeping the unemployment rate above the level that is typical during a recovery.

The bankers also gave a slight boost to forecasts for economic growth this year, lifting the target to growth of between 2.8% and 3.5% in 2010 versus November forecasts for growth between 2.5% and 3.5%.
Stimulus: One year later

Economy: Housing starts rose 2.8% in January to a 591,000 annual unit rate, according to a National Association of Home Builders report released Wednesday morning. Economists surveyed by thought it would rise to a 580,000 unit annual rate from a 575,000 unit annual rate in the previous month.

Building permits, a measure of builder confidence, fell 4.9% to an annual unit rate of 621,000 in January, versus forecasts for a drop to a 620,000 unit annual rate. Permits stood at a 653,000 unit annual rate in the prior month.

Industrial production rose 0.9% in January after rising 0.7% in the previous month, the government reported Wednesday. Economists surveyed by thought it would rise 0.7%. Capacity utilization rose to 72.6%, as expected, from 71.9% in December.

Quarterly results: Deere & Co. (DE, Fortune 500) reported higher quarterly earnings that topped estimates on lower revenue that also topped estimates. The heavy equipment maker said that cost-cutting and the benefit of better currency rates helped offset the weak economic environment. Deere also boosted its 2010 sales forecast.

Around 393 companies, or 79% of the S&P 500, have reported results. Currently, results are on track to have risen 211% from a year earlier, according to Thomson Reuters. Revenues are set to rise 8%. Stripping out the recharged financial sector, earnings are set to rise 16% and revenues 3%.
0:00 /2:38Uncertainty rings on the floor

Company news: In deal news, Walgreen (WAG, Fortune 500) said it will buy rival drugstore Duane Reade in a deal valued at $1.08 billion including debt.

Toyota (TM) said it plans to install a new brake override system in its cars, and that it will tighten controls on safety, in the aftermath of its recall of millions of autos due to faulty brakes.

However, President Akio Toyoda said he won't testify before Congress at the hearing later this month. Shares of Toyota fell nearly 3%.
When will interest rates rise?

World markets: In overseas trading, both European and Asian markets rallied.

The dollar and commodities: The dollar gained versus the euro and the yen, pressuring dollar-traded commodity prices.

U.S. light crude oil for March delivery rose 32 cents to settle at $77.33 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery rose 30 cents per ounce to settle at $1,120.10.

Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 3.74% from 3.66% late Tuesday. Treasury prices and yields move in opposite directions.

Market breadth was mixed. On the New York Stock Exchange, winners topped losers two to one on volume of 1.02 billion shares. On the Nasdaq, advancers beat decliners by three to two on volume of 2.06 billion shares.


Yahoo! Finance

4:30 pm : Action this session was choppy and trade was both listless and thin, but stocks still put together a broad-based gain in the face of a strong rebound by the dollar.

The greenback bounced back from its 0.9% loss in the previous session to book a 1.0% gain against competing currencies this session. It had traded with strength for the entire session, but its gains were extended after the latest FOMC meeting minutes indicated that the Fed raised its 2010 GDP forecast to 3.2% from 3.0%. Despite the improved forecast, officials continue to believe that economic conditions warrant exceptionally low interest rates.

Despite the greenback's gain, stocks were able to add to their advance from the previous session. The follow-through was helped by strong overseas gains and kept intact by better-than-expected housing start numbers for January and in-line building permit numbers. Industrial production for January increased at a stronger-than-expected clip, while capacity utilization was in step with the consensus call.

Though earnings have generally been a nonfactor for determining the stock market's movements during recent weeks, strong results and an upbeat forecast from Deere & Co. (DE 56.48, +2.70) helped keep the mood among participants positive. As for the stock itself, it made its best single-session percentage gain in six months.

While DE's move was enviable, the stock lacked the leadership to attract a flood of market participants. In turn, trading volume this session barely broke 1 billion shares on the NYSE. Nonetheless, broad-market investors are likely pleased that stocks were able to advance in broad-based fashion for the second straight session.

Advancing Sectors: Health Care (+0.8%), Consumer Discretionary (+0.8%), Consumer Staples (+0.7%), Industrials (+0.6%), Tech (+0.4%), Financial (+0.4%), Telecom (+0.3%), Materials (+0.1%)
Declining Sectors: Energy (-0.4%), Utilities (-0.3%)DJ30 +40.43 NASDAQ +12.10 NQ100 +0.5% R2K +0.6% SP400 +0.6% SP500 +4.64 NASDAQ Adv/Vol/Dec 1565/2.06 bln/1063 NYSE Adv/Vol/Dec 2049/1.02 bln/978

3:30 pm : Considering the strong move to the upside in the dollar, commodities fared quite well this session. The dollar index is currently up 1.0%. The CRB Commodity Index lost 0.3% of its value this session.

Precious metals, which have been particularly (inversely) sensitive to the dollar's movements, closed a modest 0.6% lower in spite of the strong move in the greenback. April gold finished essentially unchanged at $1120.00 per ounce after hitting a session high just below $1129 per ounce and a session low just below $1112 per ounce. March silver closed down 0.5% at $16.07 per ounce.

March crude oil chopped around the $77.00 per barrel level for most of the session. It closed 0.4% higher at $77.33 per barrel. After breaking below the unchanged level for a brief period in the morning, March natural gas futures trended higher for the rest of the session. They closed 1.5% higher at $5.39 per MMBtu.DJ30 +35.14 NASDAQ +9.83 SP500 +4.27 NASDAQ Adv/Vol/Dec 1462/1.70 bln/1169 NYSE Adv/Vol/Dec 1969/761 mln/1055

3:00 pm : Heading into the final hour of trade, Bank of America (BAC 15.62, +0.46), United Technologies (UTX 67.44, +1.54), and Home Depot (HD 29.98. +0.54) are among the best percentage gainers this session. Hewlett-Packard (HPQ 50.15, +0.71) is close behind; it is scheduled to post its latest quarterly report after the close.

As for laggards this session, American Express (AXP 38.99, -0.63), Kraft (KFT 28.57, -0.40), and Merck (MRK 37.26, -0.40) are currently among the worst performers by percent. DJ30 +36.05 NASDAQ +8.06 SP500 +4.12 NASDAQ Adv/Vol/Dec 1360/1.51 bln/1285 NYSE Adv/Vol/Dec 1856/701 mln/1140

2:30 pm : Health care stocks have managed to hold on to a 1.0% gain in the face of the broader market's chop. The gain is the best of any major sector, though consumer discretionary stocks have made their way to a 0.7% gain amid strength in household appliances (+1.2%) and home improvement retailers (+1.6%).

Though action has been choppy, and even a bit sloppy at times, volatility has fallen 2.3% this session, according to the Volatility Index (VIX). Declines during recent sessions have left the VIX up just 0.3% in the new year. DJ30 +20.33 NASDAQ +6.45 SP500 +2.29 NASDAQ Adv/Vol/Dec 1340/1.45 bln/1276 NYSE Adv/Vol/Dec 1823/657 mln/1187

2:05 pm : Stocks are stuck in choppy, listless action as the greenback continues to gain ground against competing currencies. The buck recently extended its advance to a 1.0% gain, a fresh session high, amid news that minutes from the latest FOMC meeting indicated that Fed officials apparently mulled hiking the discount rate by 25 basis points.

While such a hike was put on hold, the Fed did raise its 2010 GDP forecast to 3.2% from 3.0% and now believes that core inflation for 2010 will hit 1.4%, rather than the 1.3% rate that the Fed had previously forecast.

Meanwhile, Treasuries have extended their slide in the wake of the announcement. The benchmark 10-year Note is now down more than 20 ticks after it had traded with roughly a 10-tick loss earlier in the session. DJ30 +13.15 NASDAQ +5.02 SP500 +1.58 NASDAQ Adv/Vol/Dec 1338/1.34 bln/1253 NYSE Adv/Vol/Dec 1785/601 mln/1201

1:30 pm : Stocks continue to sport solid gains as they extend their rebound from a late-morning drop to the neutral line. Energy stocks (-0.5%) and utilities stocks (-0.2%) remain in the red, though.

Trading volume has been rather light this session, but that is generally in tune with the lack of participation that has been seen in the broader market during recent months. The 50-day moving average for trading volume on the NYSE currently stands just above 1.1 billion shares per session, but one year ago the average stood close to 1.4 billion shares per session. DJ30 +32.80 NASDAQ +7.62 SP500 +3.97 NASDAQ Adv/Vol/Dec 1377/1.24 bln/1207 NYSE Adv/Vol/Dec 1897/549 mln/1073

1:00 pm : Trade has been choppy this session, but that hasn't stopped stocks from modestly extending the previous session's gains in the face of a stronger dollar.

Stocks have lacked leadership this session, but the broader market has still made its way higher in broad-based fashion. Most impressive is that the advance has come despite a 0.9% gain by the greenback against a basket of foreign currencies. The move has nearly erased its slide from the previous session.

Though the broader market has managed to shrug off the greenback's gain, energy stocks have struggled this session. The sector is currently down 0.5%, which is out of sync with oil's current 0.3% gain at $77.25 per barrel.

Managed care providers are some of the best performers at the moment. They are collectively up 3.7% despite Humana's (HUM 47.10, +1.09) reaffirmed an outlook, which was rather underwhelming. Still, their strength has helped the broader health care sector climb to a 1.1% gain, which is the best of any major sector.

Home improvement retailers are up a solid 1.7% after analysts at Oppenheimer upgraded Home Depot (HD 29.98, +0.54) and news surfaced that housing starts in January exceeded economists' expectations. Annualized building permits for January were on par with expectations.

In other economic news, industrial production for January made a stronger-than-expected 0.9% increase, while capacity utilization was in-line with expectations at 72.6%.

The latest FOMC meeting minutes make up the last item on today's economic calendar. They are due at 2:00 PM ET and make for a key event.DJ30 +35.20 NASDAQ +6.90 SP500 +3.94 NASDAQ Adv/Vol/Dec 1317/1.15 bln/1248 NYSE Adv/Vol/Dec 1875/509 mln/1063

12:30 pm : Stocks have extended their rebound to trade in-line with the levels that they saw in the early going -- session highs remain a few points away.

The Dollar Index has made its way to a fresh session high, though. It is currently up 0.8% as it attempts to erase the previous session's 0.9% loss, which was its worst single-session decline since November. DJ30 +39.22 NASDAQ +6.77 SP500 +4.06 NASDAQ Adv/Vol/Dec 1308/1.06 bln/1244 NYSE Adv/Vol/Dec 1909/465 mln/1008

12:00 pm : The Dow and S&P 500 recently retreated to fresh session lows, but were able to stop their slide at the neutral line, where participants stepped in and offered their support. Stocks have since bounced back to resume trading with modest gains.

Energy stocks remain weak, though. The sector is down 0.6%, more than any other major sector in the S&P 500, despite a modest increase in oil prices, which were last quoted 0.2% higher at $77.15 per barrel.

Meanwhile, health care stocks have made their way to a 0.9% gain, which is the best of any major sector at the moment. Health care is also one of a handful of sectors to trade higher in the new year; the sector is up 0.6% in 2010.DJ30 +28.11 NASDAQ +3.79 SP500 +3.48 NASDAQ Adv/Vol/Dec 1260/969 mln/1274 NYSE Adv/Vol/Dec 1845/425 mln/1062

11:30 am : The stock market recently dipped to a fresh session low, but all the while it managed to hold on to its broad-based gains. Energy (-0.4%) and utilities (-0.2%) are the only two major sectors to reside in the red.

Health care stocks now make up the best performing sector. They are up a collective 0.7% as managed care providers spike to a 3.1% gain. Even Humana (HUM 46.91, +0.90) is up solidly after it reaffirmed an outlook for fiscal 2010 that is below Wall Street's current call for full-year earnings of $5.56 per share. Humana also stated that it will reduce its workforce during the course of this year. DJ30 +15.64 NASDAQ +2.04 SP500 +1.79 NASDAQ Adv/Vol/Dec 1255/813 mln/1223 NYSE Adv/Vol/Dec 1767/364 mln/1111

11:00 am : Action in the broader market remains choppy as the dollar rebounds from its worst percentage loss in almost three months. After it dropped 0.9% against competing currencies during the previous session, the greenback is up 0.7% this session.

Despite the broader market's choppy trade, shares of Deere & Co. (DE 56.74, +2.96) continue to sport some of the best gains tis session. The stock has found favor following news that the company brought in better-than-expected earnings for its latest quarter and issued upside guidance. The shares, however, have gradually drifted off of their opening highs.

Meanwhile, grocer Whole Foods (WFMI 33.64, +3.12) also posted better-than-expected earnings for its latest fiscal quarter and issued upside guidance, too. Its shares recently reached a fresh session high as they progress toward their best single-session percentage advance in six months. The stock is now up more than 22% year-to-date, while the broad-based S&P 500 is down 1.5% in the new year. DJ30 +26.60 NASDAQ +9.04 SP500 +3.41 NASDAQ Adv/Vol/Dec 1420/660 mln/1015 NYSE Adv/Vol/Dec 1963/299 mln/886

10:30 am : Commodities have struggled to extend their gains from the previous session in the face of a firmer dollar. Specifically, the previous session saw the CRB Commodity Index spike 2.6% in its best single-session percentage gain in three months as the Dollar Index dropped 0.9% in its worst single-session percentage slide since November, but the greenback's 0.5% bounce this session has clipped the CRB for a 0.2% loss this morning.

Despite the CRB's modest move lower, several of its primary components have managed to garner support. Energy prices have managed to garner support and extend their near 4% gain from the the previous session. Prices for crude are currently up 0.2% to $77.15 per barrel. Weekly oil inventory numbers will be reported tomorrow due to the holiday earlier this week.

Natural gas prices have also managed to attract some modest support. Contract prices are up 0.4% to $5.33 per MMBtu.

Precious metals are currently mixed. Gold prices are down with a fractional loss at $1118.90 per ounce, while silver trades with a 0.4% gain at $16.22 per ounce.

In other commodity-related action, the Baltic Dry Index (BDI) tacked on 2.4%. The Capesize Subindex led gains with a 4.2% advance, which has gained more than 9% during the course of the past four sessions. Meanwhile, the fractional gain in the Supramax put an end to its 23-session losing streak, which dragged it down some 20%. However, the Handysize Index extended its losing streak to 20 consecutive sessions; it has lost 15% in that time. DJ30 +39.07 NASDAQ +8.80 SP500 +4.69 NASDAQ Adv/Vol/Dec 1425/504 mln/955 NYSE Adv/Vol/Dec 2066/231 mln/733

10:00 am : Action has been choppy in the early going, but stocks continue to trade with moderate gains.

In the midst of the early swings, energy stocks have recovered from an early slip to trade with a fractional gain, while materials stocks have jumped out to a solid gain of 0.7%. Still, the broader market lacks concerted leadership.

Early movers: Trading up -- CYCC +17.1%, BW +13.5%, WFMI +10.1%, PACR +9.6%, CSTR +9.2%, UCTT +8.8%, DISCA +8.4%, LZB +7.9%, MSO +7.9%, IMMU +7.9%, SBGI +7.8%; Trading down -- RICK -7.7%, RRR -6.6%, MASI -6.5%, VMI -5.1%, OC -5%, SIRO -4.9%, VCLK -4.1%

Advancing Sectors: Materials (+0.7%), Consumer Discretionary (+0.5%), Health Care (+0.4%), Telecom (+0.4%), Consumer Staples (+0.4%), Tech (+0.3%), Financial (+0.3%), Industrials (+0.2%), Energy (+0.1%)
Declining Sectors: Utilities (-0.1%)DJ30 +27.74 NASDAQ +6.33 SP500 +3.93 NASDAQ Adv/Vol/Dec 1388/329 mln/919 NYSE Adv/Vol/Dec 1932/148 mln/786

09:45 am : Stocks have slipped a bit from their opening highs, but continue to trade with modest, broad-based gains. Of the 10 major sectors, only energy is in the red; its loss is fractional, though.

The dip by energy stocks comes as a pullback from the sector's near 3% advance during the previous session. Oil prices have managed to extend their near 4% gain to trade with a 0.3% gain, however. Oil prices were last quoted at $77.25 per barrel. DJ30 +33.25 NASDAQ +3.05 SP500 +2.66 NASDAQ Adv/Vol/Dec 1278/189 mln/938 NYSE Adv/Vol/Dec 1887/96 mln/730

09:15 am : S&P futures vs fair value: +5.60. Nasdaq futures vs fair value: +6.80. Despite a solid 0.5% advance by the Dollar Index, stock futures continue to suggest an extension of the previous session's sharp gain, which was the best single-session percentage advance for the S&P 500 since November. Solid gains among overseas markets have been an underpinning factor for this morning's follow through, as has a better-than-expected increase in January housing starts. Industrial production data for January was just released; it showed a stronger-than-expected 0.9% increase. Meanwhile, at 72.6%, capacity utilization for January was in-line with the consensus. Still to come, though, are the minutes from the latest FOMC meeting (2:00 PM ET).

09:00 am : S&P futures vs fair value: +5.70. Nasdaq futures vs fair value: +6.50. The Dollar Index has extended its morning advance so that it now trades with a 0.4% gain, but U.S. stock futures continue to trade with strength ahead of the opening bell. Their strength has been largely underpinned by overseas gains. Germany's DAX up 1.3% as its advancers sport a 5-to-1 advantage over declining issues. Deutsche Bank (DB) is a primary leader after on the German bourse after French financial services giant BNP Paribas posted strong quarterly numbers, which have helped send the CAC to a 1.8% gain. EDF and PPR are the only two names in the 40-member index to trade in the red. Meanwhile, Britain's FTSE is up 0.9% amid continued strength in Barclays (BCS). HSBC (HBC) and Lloyds (LYG) have followed suit. In economic news, BBC News reported that United Kingdom total unemployment stood at 2.46 million in the fourth quarter, down 3,000 from the previous quarter, but the unemployment rate was unchanged at 7.8%. Additionally, AFP reported that Bank of England policymakers voted unanimously to keep British interest rates at a record low of 0.50% and to freeze radical credit-easing plans, according to minutes from a recent meeting. In Asia, MSCI Asia Pacific Index advanced 1.9% and Japan's Nikkei climbed 2.7%. Resource-related stocks were among the strongest performers. As such, Nippon Steel and JFE Holdings spiked. Nuclear power related firms climbed broadly amid hopes for an increase in business opportunities after U.S. President Barack Obama announced $8.3 billion in loan guarantees to build the first U.S. nuclear power plant in nearly three decades. Toyota Motor (TM) finished flat after U.S. regulators opened an investigation into whether Toyota acted in a timely manner to implement its latest recall. In Hong Kong, the Hang Seng tacked on 1.3%. Banks saw solid support as they returned for their first session since Beijing's announcement last week to raise bank reserve requirements once more. Mainland China's Shanghai Composite was closed.

08:35 am : S&P futures vs fair value: +5.90. Nasdaq futures vs fair value: +5.30. Stock futures remain strong in the wake of the latest batch of data. The Import Price Index increased 1.4% in January from December, but that was stronger than the consensus call for a 1.0% month-over-month increase. Year-over-year, import prices for January increased 11.5%, which is stronger than the 10.8% increase that many had come to expect. Separately, housing starts for January climbed 2.8% month-over-month to an annualized rate of 591,000 units from an upwardly revised rate of 575,000 units in December. The increase was stronger than expected in that the consensus had called for an annualized rate of 580,000 units in January. Meanwhile, building permits for January hit an annualized rate of 621,000, which is in-line with the consensus call for 620,000, but down a sharper-than-expected 4.9% month-over-month from the rate of 653,000 that was registered in December.

08:00 am : S&P futures vs fair value: +6.50. Nasdaq futures vs fair value: +5.80. Market participants await the latest economic activity reading, which includes import prices and housing permits (8:30 AM ET), industrial production (9:15 AM ET), and FOMC meeting minutes (2:00 PM ET), but for now strong overseas gains have helped prop up stock futures in the face of a modestly firmer dollar. The strong gains seen in both Asia and Europe follow the best single-session percentage move by the S&P 500 in three months.

06:30 am : S&P futures vs fair value: +2.80. Nasdaq futures vs fair value: +1.80.

06:30 am : Nikkei...10306.83...+272.60...+2.70%. Hang Seng...20534.01...+265.30...+1.30%.

06:30 am : FTSE...5272.51...+28.40...+0.50%. DAX...5639.40...+47.30...+0.90%.

Special thanks to Yahoo! Finance and CNNMoney for their market summaries. gm

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body analysis)

Phone: +1 708 572-4885
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