Market News

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08:35 am : S&P futures vs fair value: +8.30. Nasdaq futures vs fair value: +8.30. First quarter nonfarm productivity increased 0.8%, which is more than the 0.6% increase that was expected, and up from the 0.6% decrease in the prior reading. Unit labor costs for the first quarter increased 3.3%, which is more than the 2.7% increase that was expected. Unit labor costs increased 5.7% in the prior reading. Separately, initial jobless claims for the week ending May 2 totaled 601,000, which is less than the 635,000 initial claims that were widely expected. Meanwhile, the prior week's claims data was revised modestly upward to 635,000. Continuing claims climbed to 6.35 million, which is in-line with what was expected. Despite challenging job conditions, retailers are reporting April same-store sales results that have generally been better than expected. Nordstrom (JWN) saw a 10.8% decline in same-store sales, but a 12.1% decline was expected by Briefing.com's analyst team. TJX (TJX) reported same-store sales increased 3%, which helped the company raise its first quarter earnings outlook, according to Dow Jones. Aeropostale (ARO) posted a same-store sales increase of 20%, topping the 9% increase that Briefing.com expected. Wal-Mart (WMT) announced a 5% increase in same-store sales, which topped the 2.7% increase that was expected. However, Wal-Mart also issued downside revenue guidance and indicated that it will no longer report monthly sales results. Stock futures now point to an even stronger start.

 

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08:00 am : S&P futures vs fair value: +15.00. Nasdaq futures vs fair value: +18.00. Equity futures are trading with strong gains following the release of the government's stress test results last night, and ahead of this morning's highly anticipated April Employment report (to be released at 8:30 ET). The results of the widely publicized stress test, which showed 10 of the 19 banks that were subject to the test will be required to raise additional capital buffers totalling ~$75 billion, were largely taken to be better than expected. Overnight, stocks traded higher in European and Asian markets, and this morning most of the financial companies that were subject to the stress test are trading higher in the pre-market. This week marks the end of the Q1 earnings reporting season.

 

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April Non-farm Payrolls Fell by 539,000; Unemployment Rate at 8.9%

 

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08:35 am : S&P futures vs fair value: +14.40. Nasdaq futures vs fair value: +18.00. Futures still point to a positive start, and trade a few points from session highs as the April employment report hit the wires. Nonfarm payrolls fell by 539,000, beating the consensus estimate of -600,000. The prior month was revised to a loss of 699,000 from a loss of 663,000. The unemployment rate rose to 8.9% (8.9% consensus) from 8.5%. Separately, Wells Fargo (WFC) priced 272 million shares at $22/ per share, according to Dow Jones. WFC closed at $24.76 yesterday.

 

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Briefing.com: Just hitting the wires, March wholesale inventories declined 1.6% after falling 1.7% in February. The decline was worse than the consensus estimate of -1.0%.

 

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08:35 am : S&P futures vs fair value: -15.40. Nasdaq futures vs fair value: -23.80. Foreign markets are trading with losses as France's CAC falls 1.9% amid broad-based weakness. Sanofi-Aventis (SNY) is among the primary laggards. A report from Dow Jones indicated that AstraZeneca (AZN) said its experimental blood thinner outperformed Plavix, which is coproduced by Sanofi-Aventis. Meanwhile, shares of AZN are helping provide support to Britain's FTSE, which is currently down 0.9%. Royal Dutch Shell (RDS.A) is weighing on the session's performance, though. Standard Chartered and HSBC (HBC) are also trading as laggards. According to an article in The Wall Street Journal, HSBC said it is well positioned for the highly uncertain environment. In Germany, Daimler (DAI) and Siemens (SI) are helping to drag the DAX down 1.0%. In Asia, Hong Kong's Hang Seng finished 1.7% lower amid weakness in China Construction Bank. According to The Wall Street Journal, Bank of America (BAC) is dumping its near 17% stake in the company. HSBC showed leadership, however. Japan's Nikkei finished the session 0.2% higher with help from Secom and Takeda Pharmaceuticals. Toyota Motor (TM) was a primary laggard.

 

[weatherweenie]

08:35 am : S&P futures vs fair value: +5.60. Nasdaq futures vs fair value: +7.50. The latest trade data has had little impact on stock futures, which continue to indicate a solid start for the major indices. The U.S. trading deficit for March totaled $27.6 billion, which is less than the $29.0 billion deficit that was widely expected. February's deficit, which had narrowed sharply from January due to a drop in imports, was revised modestly higher to $26.1 billion.

 

[weatherweenie]

09:17 am : S&P futures vs fair value: -16.10. Nasdaq futures vs fair value: -13.50. Sellers are pressuring stocks ahead of the opening bell. The downward bias comes as an extension of profit-taking, which began Monday after market participants had watched stocks string together a series of heady gains in preceding weeks. Disappointing advance retail sales data has only supported this morning's selling effort, and considerable weakness in European bourses, which follows more dour economic data, has only exacerbated the negative bias. There haven't been any market-moving earnings announcements released this morning, though Intel (INTC) did indicate that the second quarter is going better than it had expected. That has provided support for the stock in premarket trading, overshadowing news that the European Commission has levied a $1.45 billion fine on the company for breaking European antitrust laws. Separately, Treasury Secretary Geithner is currently giving a speech to the Independent Community Bankers of America, during which he stated that the there are plans to reopen the application window for banks with total assets under $500 million under the Capital Purchase Program. Geithner also indicated the financial system is starting to heal. Business inventory data for March is due at 10:00 AM ET.

 

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DETROIT/WASHINGTON (Reuters) – General Motors Corp and Chrysler aim to drop as many as 3,000 U.S. dealers and are expected to begin sending notifications as early as Thursday, three people briefed on the still developing plans said.

http://news.yahoo.com/s/nm/20090513/bs_nm/us_autos_dealers

 

[James48843]

Derivatives crackdown and regulation proposal:

U.S. Government proposes to require all derivatives to be regulated:

http://news.yahoo.com/s/nm/20090513/bs_nm/us_financial_derivatives

 

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WASHINGTON (AP) -- The staff of the Securities and Exchange Commission has decided to recommend that the agency bring civil fraud charges against Angelo Mozilo, the former chief executive of mortgage lender Countrywide Financial Corp., according to a published report Wednesday.

http://finance.yahoo.com/news/Repor...38261.html?sec=topStories&pos=2&asset=&ccode=

 

[weatherweenie]

08:07 am : S&P futures vs fair value: -8.80. Nasdaq futures vs fair value: -16.50. Stock futures point to a lower start for the broader market, but shares of insurers are seeing strength after the Treasury decided to make $22 billion in TARP funds available to a number of life insurance companies, The Wall Street Journal reported. Hartford Financial (HIG) has approval for $3.4 billion, while Lincoln National (LNC) has approval for $2.5 billion. Prudential Financial (PRU), Principal Financial (PFG), and Allstate (ALL) will also receive aid, according to the article. A few companies recently announced their latest earnings results. Nordstrom (JWN) posted first quarter earnings of $0.31 per share, which is $0.05 better than the consensus of $0.26 per share. The company also raised its outlook for fiscal 2010, seeing earnings ranging from $1.25 to $1.50 per share, including tax items. The company had forecast earnings from $1.10 to $1.40 per share. Shares of JWN are up 2.2% to $21.40 per share ahead of the opening bell. Abercrombie & Fitch (ANF) posted a first quarter loss of $0.31 per share, which is $0.17 worse than the consensus estimate of a loss of $0.14 per share. ANF is down 7.3% to $25.25 per share in premarket action. JC Penny (JCP) announced it earned $0.11 per share during the first quarter. Analysts had expected $0.10 per share. JC Penny expects to incur a second quarter loss ranging from $0.25 to $0.15 per share, which is worse than the $0.09 per share loss that analysts have forecast. However, JC Penny expects earnings for fiscal 2010 to range from $0.50 to $0.65 per share, but that is still below the consensus estimate of $0.76 per share. Shares of JCP are down roughly 5% to $25.30 per share ahead of the opening bell.

 

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April Consumer Price Index Unchanged; Core CPI Up 0.3%. Empire State Manufacturing Index -4.55

 

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The recent rally in the S&P 500 could be over as the index is struggling to break above a key resistance level, Royce Tostrams, technical analyst from Tostrams Groep, told CNBC.

http://www.cnbc.com/id/30760569

 

[weatherweenie]

08:35 am : S&P futures vs fair value: -5.50. Nasdaq futures vs fair value: -11.30. Stock futures have improved a bit from earlier levels, but continue pointing toward a lower start for the session. In economic news, the April Consumer Price Index (CPI) was flat month-over-month, which is in-line with expectations following a 0.1% monthly decrease for March. Core CPI, which excludes food and energy, increased 0.3% month-over-month to exceed the 0.1% increase that was forecast by economists. Core CPI for March had increased 0.2% month-over-month. Year-over-year, CPI slipped 0.7%, which is sharper than the 0.6% downturn that was widely expected. Meanwhile, core CPI increased 1.9% year-over-year. It was expected to increase 1.8% year-over-year. Separately, the Empire State Manufacturing Survey for May came in with a -4.55 reading, which is better than the -12.00 that was expected, and up from the -14.65 registered for April. April industrial production data and capacity utilization have yet to be released; they are due at 9:15 AM ET. Preliminary University of Michigan Consumer Sentiment Survey is due at 10:00 AM ET.

 

[weatherweenie]

08:35 am : S&P futures vs fair value: +0.80. Nasdaq futures vs fair value: -6.80. Housing starts during April came in at an annualized rate of 458,000, which is lower than the 520,000 that was expected, and down from the 525,000 from March. Meanwhile, building permits for April reached a rate of 494,000, which is below the 530,000 building permits that were expected, and down from 516,000 in March. Stock futures have pulled back in the wake of the data as worse-than-expected housing starts and building permits appear indicative of weak economic conditions. However, the silver lining in this scenario is that there is ultimately less competition for existing homes, which is essential in clearing the inventory glut and improving pricing. No other economic releases are scheduled for this morning, and Minneapolis Fed President Stern is the only economic speaker scheduled for today (1:15 PM ET).

 

[weatherweenie]

08:37 am : S&P futures vs fair value: +6.00. Nasdaq futures vs fair value: +2.00. According to Times of London, minutes from a recent Bank of England meeting indicated the central bank considered pumping 75 billion British pounds of new money into the financial system, but settled on increasing the process of quantitative easing by 50 billion pounds. The decision to keep rates steady at 0.5% was unanimous. Britain's FTSE is currently trading with a 0.2% loss. HSBC (HBC) and Barclays (BCS) are primary laggards in the FTSE. Lloyds Group (LYG) is also under pressure amid a Dow Jones report that the company is placing an offer for new, ordinary shares. In France, the CAC is up 0.5% amid strength in Total (TOT) and Societe Generale. BNP Paribas is pulling back after clicking higher in each of the past four sessions. Meanwhile, Germany's DAX is trading with a 0.9% gain. Deutsche Bank (DB) is among the German bourse's primary leaders. In Asia, Japan's Nikkei logged a 0.6% gain. Takeda Pharmaceuticals was a primary leader during the session, as was Mitsubishi. Kyocera traded as a laggard. Honda Motor (HMC) finished lower, but Nissan Motor (NSANY) jumped after it reported a strong upturn in low-emission car orders in May. According to reports, Japan's economy shrank a record 4.0% in the first quarter, though that was less than the decline that was expected. Governor Masaaki Shirakawa indicated that consumption and investment would remain weak going forward. In Hong Kong, the Hang Seng closed 0.4% lower. HSBC and China Construction Bank created the most drag on the index. China Petroleum and Petrochina helped provide support, though.

 

[weatherweenie]

09:15 am : S&P futures vs fair value: -12.80. Nasdaq futures vs fair value: -14.50. Banks continue coming to market with equity offerings amid ongoing concern about capital levels in the face of tenuous economic conditions, which have led to a record high 6.66 million continuing jobless claims. Moreover, unease related to global economic conditions led Standard & Poor's to lower the United Kingdom's debt rating, which has pressured the U.K.'s stocks and currency. Following the prior session's weak close, the headlines have led participants to bid stocks lower ahead of the opening bell.

 

[weatherweenie]

09:15 am : S&P futures vs fair value: +2.20. Nasdaq futures vs fair value: +2.80. Overall news flow is slow ahead of the long weekend (stock and bond markets are closed Monday for Memorial Day observance), but stock futures point to a modestly upward start for the major indices. Though stock futures have pulled back from their morning highs, an upturn in the major indices would mark an extension of the bounce that pared losses late in the prior session. While stocks look to be set for some initial gains, the U.S. dollar is back on the defensive as the Dollar Index slides to its lowest level since December 2008. However, weakness in the dollar bodes well for commodities, which have been garnering considerable support in recent weeks as investors wager that a recovery in commodity demand will accompany an economic recovery in the second half of the year.

 

[weatherweenie]

08:35 am : S&P futures vs fair value: -3.00. Nasdaq futures vs fair value: -6.80. Stocks are showing weakness in European trading. Germany's DAX is down 1.1% following news that the country's GDP declined 3.8% from the previous quarter, which marked the fourth straight quarterly decline and the worst in nearly 40 years of record keeping. Engineering giant Siemens (SI) is a primary laggard in the DAX. Losses in London are also considerable; the FTSE is down 0.6%. HSBC (HBC) is a primary laggard. BP PLC (BP) and Royal Dutch Shell (RDS.A) are also weighing on action. According to The Wall Street Journal, Royal Dutch Shell executive director Linda Cook is stepping down. In France, the CAC is off by 1.0%. Integrated oil and gas outfit Total (TOT) is currently the session's primary laggard. In Asia, Japan's Nikkei slipped 0.4%. Tokyo Electronics and Fast Retailing were a drag on trading. Despite news that Japan raised its economic outlook for the first time in three years on Monday, geopolitical tension in North Korea is causing some concern in the region. In Hong Kong, the Hang Seng shed 0.8% amid weakness in HSBC and Industrial and Commercial Bank of China. Energy player CNOOC (CEO) also showed considerable weakness.