Saturday, February 28, 2009
Monday, February 2, 2009
Stock Market Month Review January 2009
MARKET SNAPSHOT: After Dismal Start To 2009, February Could Hold More Of Same
After the worst January on record, the new month is off to an uncertain start with investors braced for more disappointing earnings results, layoffs and dismal economic data.
"There was a lot going on last week, earnings, company projections layoff announcements, housing numbers, economic numbers, and bailout announcements, and not a glimmer of hope among them. This week, we anticipate more of the same," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
"With 40% of the S&P reported, and earnings looking down 35% versus the fourth quarter last year, expectations are low," said Pado.
On Monday, equities closed mostly lower, with energy, industrials and materials down the most and technology shares helping the market pare losses.
The Dow Jones Industrial Average (DJI) finished down 64.11 points, or 0.8%, to 7,936.75. The S&P 500 (SPX) gained half of a point to stand at 825.43, and the Nasdaq Composite (RIXF) added 18.01 points, or 1.2%, to 1,494.43.
"Tech is showing some small signs of positive relative performance to the S&P. I may be grasping at straws, but that would be a positive divergence," Pado said.
Added to the underlying anxiety is the slew of economic data due this week, culminating in Friday's jobs report. Economists on average anticipate a loss of 550,000 jobs and an unemployment rate of 7.4%.
"That is one ugly report holding out until Friday," Pado said.
Adding to the job losses, Macy's Inc. on Monday said it would cut about 7,000 jobs, roughly 4% of its workforce, and slash its dividend by more than half. .
Results
On the earnings front, Mattel Inc. (MAT) on Monday reported a 46% fourth- quarter profit decline from last year, with the results from the world's biggest toy maker much worse than expected. .
Manufacturer Rockwell Automation Inc. (ROK) lowered its yearly forecast while reporting a 25% slide in fiscal first-quarter profit. .
Chip-tools maker Applied Materials Inc. (AMAT) lowered its earnings forecast ahead of reporting its first-quarter results next Tuesday. .
And, after Monday's close, flash-memory chip maker SanDisk Corp. (SNDK) is expected to report a quarterly loss, while insurer Aflac Inc. (AFL) is expected to report a 20% rise in earnings in the fourth quarter. .
Tuesday brings results from a broad mix of companies, including Archer Daniels Midland Co. (ADM), Dow Chemical Co. (DOW), Merck & Co. Inc. (MRK), Walt Disney Co. (DIS) and Motorola Inc. (MOT).
In addition, major automakers on Tuesday report on January sales, with another batch of double-digit declines likely in store. .
Last month, the Dow lost 775.53 points, or 8.8%, marking the blue-chip index's worst January performance in both point and percentage terms in its 113-year history. The second worst January came in 1916 when the Dow fell 8.64%, and then went on to a full-year decline of 4.91%.
The first month of the year has accurately predicted the year's direction 75% of the time in the history's index, matching 84 out of 112 full years. The accuracy has increased in more recent decades, matching 26 years, or 87% of the time, for the last 30 years, according to Dow Jones Indexes.
The final week of January featured the release of the preliminary fourth- quarter gross domestic product, which had the U.S. economy contracting at an annualized rate of 3.8%, the biggest drop since 1982.
"Not only were consumer spending and business investment levels down, but the report also showed an unwanted build-up in inventory levels that will need to be worked off, suggesting that the current quarter also will be quite weak," said Bob Doll, chief investment officer of equities at BlackRock.
http://www.nasdaq.com//aspxcontent/newsstory.aspx?textpath=20090202\ACQDJON200902021615DOWJONESDJONLINE000549.htm&cdtime=02%2f02%2f2009%20+4%3a15PM
After the worst January on record, the new month is off to an uncertain start with investors braced for more disappointing earnings results, layoffs and dismal economic data.
"There was a lot going on last week, earnings, company projections layoff announcements, housing numbers, economic numbers, and bailout announcements, and not a glimmer of hope among them. This week, we anticipate more of the same," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
"With 40% of the S&P reported, and earnings looking down 35% versus the fourth quarter last year, expectations are low," said Pado.
On Monday, equities closed mostly lower, with energy, industrials and materials down the most and technology shares helping the market pare losses.
The Dow Jones Industrial Average (DJI) finished down 64.11 points, or 0.8%, to 7,936.75. The S&P 500 (SPX) gained half of a point to stand at 825.43, and the Nasdaq Composite (RIXF) added 18.01 points, or 1.2%, to 1,494.43.
"Tech is showing some small signs of positive relative performance to the S&P. I may be grasping at straws, but that would be a positive divergence," Pado said.
Added to the underlying anxiety is the slew of economic data due this week, culminating in Friday's jobs report. Economists on average anticipate a loss of 550,000 jobs and an unemployment rate of 7.4%.
"That is one ugly report holding out until Friday," Pado said.
Adding to the job losses, Macy's Inc. on Monday said it would cut about 7,000 jobs, roughly 4% of its workforce, and slash its dividend by more than half. .
Results
On the earnings front, Mattel Inc. (MAT) on Monday reported a 46% fourth- quarter profit decline from last year, with the results from the world's biggest toy maker much worse than expected. .
Manufacturer Rockwell Automation Inc. (ROK) lowered its yearly forecast while reporting a 25% slide in fiscal first-quarter profit. .
Chip-tools maker Applied Materials Inc. (AMAT) lowered its earnings forecast ahead of reporting its first-quarter results next Tuesday. .
And, after Monday's close, flash-memory chip maker SanDisk Corp. (SNDK) is expected to report a quarterly loss, while insurer Aflac Inc. (AFL) is expected to report a 20% rise in earnings in the fourth quarter. .
Tuesday brings results from a broad mix of companies, including Archer Daniels Midland Co. (ADM), Dow Chemical Co. (DOW), Merck & Co. Inc. (MRK), Walt Disney Co. (DIS) and Motorola Inc. (MOT).
In addition, major automakers on Tuesday report on January sales, with another batch of double-digit declines likely in store. .
Last month, the Dow lost 775.53 points, or 8.8%, marking the blue-chip index's worst January performance in both point and percentage terms in its 113-year history. The second worst January came in 1916 when the Dow fell 8.64%, and then went on to a full-year decline of 4.91%.
The first month of the year has accurately predicted the year's direction 75% of the time in the history's index, matching 84 out of 112 full years. The accuracy has increased in more recent decades, matching 26 years, or 87% of the time, for the last 30 years, according to Dow Jones Indexes.
The final week of January featured the release of the preliminary fourth- quarter gross domestic product, which had the U.S. economy contracting at an annualized rate of 3.8%, the biggest drop since 1982.
"Not only were consumer spending and business investment levels down, but the report also showed an unwanted build-up in inventory levels that will need to be worked off, suggesting that the current quarter also will be quite weak," said Bob Doll, chief investment officer of equities at BlackRock.
http://www.nasdaq.com//aspxcontent/newsstory.aspx?textpath=20090202\ACQDJON200902021615DOWJONESDJONLINE000549.htm&cdtime=02%2f02%2f2009%20+4%3a15PM
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