U.S. Equity Market Diary (July 19, 2010)

Monday, July 19th, 2010

U.S. Equity Market Diary (July 19, 2010)

The figure below shows the performance of each sector in the S&P 500 Index for the week. Two sectors increased slightly. The best-performing sector was consumer staples, up 0.1 percent. Other better-performing sectors included technology and telecom services. The three worst-performing sectors were financials, industrials and materials.

Within the consumer staples sector the best-performing stock was Dean Foods Co, up 4 percent. Other top performers in the sector were Walgreen Co., Philip Morris International Inc., Estee Lauder Companies Inc. and Constellation Brands Inc.

Strengths

• The forest products group was the best-performing group for the week, up 13 percent, led by its single member, Weyerhaeuser Co. The company announced that the ex-dividend date for the $26.47 per share special dividend will be July 20, 2010.
• The fertilizer & agricultural chemicals group was the second-best performer, up 9 percent, led primarily by Monsanto Co., and to a lesser extent, CF Industries Holdings Inc. These moves are likely related to the recent rises in the prices of wheat and corn. It was also reported recently that Monsanto’s CEO and CFO had acquired about $3.5 million worth of company stock.
• The investment bank & brokerage group outperformed, up 4 percent. Goldman Sachs Group Inc. settled a civil fraud suit with the SEC. Charles Schwab Corp. reported second-quarter earnings above the consensus estimate, and it indicated that the second half of the year would show improvement.

Weaknesses

• The diversified metals & mining group underperformed, down 9 percent, led by its largest member, Freeport-McMoRan Copper & Gold Inc. The prices of copper and gold declined during the week.
• The building products group lost 9 percent, led by its single member, Masco Corp. Stock weakness here may be related to the continuing weakness in the housing industry.
• The regional bank group was down 7 percent. This could be related to concerns about some weaknesses in earnings reports issued this week by some of the large banks.

Opportunities

• There may be an opportunity for gain in merger & acquisition transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable time frame, it could be a threat to stock prices.
• As governments around the world begin to wind down the monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.

Tags: Brokerage Group, Cf Industries Holdings, Cf Industries Holdings Inc, Charles Schwab, Charles Schwab Corp, Constellation Brands, Constellation Brands Inc, Consumer Staples, Dean Foods Co, Freeport Mcmoran, Freeport Mcmoran Copper, Gold, Goldman Sachs, Goldman Sachs Group, Goldman Sachs Group Inc, Masco Corp, Monsanto Co, Philip Morris International, Sachs Group Inc, Walgreen Co, Weyerhaeuser Co
Posted in Gold, Markets, US Stocks | Comments Off

U.S. Equity Market Diary (June 21, 2010)

Saturday, June 19th, 2010

U.S. Equity Market Diary (June 21, 2010)

The figure below shows the performance of each sector in the S&P 500 Index for the week. All 10 sectors gained. The best-performing sector was utilities, up 3.9 percent. Other better-performing sectors included information technology and industrials. The three worst-performing sectors were telecom, consumer discretion and materials.

Within the materials sector the best-performing stock was Pepco Holdings, up 6 percent. Other top-five performers in the sector were Ameren Corp., Centerpoint Energy, Pinnacle West and Nextera Energy.

Strengths

• The top-performing group was gold. This is a single-stock index composed of Newmont Mining. The advance in the stock was due to new levels reached in the price of gold bullion.
• The oil & gas refiners group outperformed, rising 7 percent, led by Sunoco Inc. The company plans to separate its coke-manufacturing operation to concentrate on its fuels business. It also expects its refining segment to be profitable.
• The computer hardware group outperformed, gaining 6 percent. Apple Inc. was the biggest mover as it announced that it sold over 600,000 iPhones on the first day of taking pre-orders.

Weaknesses

• The computer & electronics retail group was the worst-performing group, losing close to 8 percent, with Best Buy Co. and GameStop Corp. both falling. Best Buy announced that it was getting into the used videogame business, in which GameStop is the dominant player.
• The forest products group underperformed, losing 4 percent. This is another single stock index composed of Weyerhaeuser Co. Credit Suisse lowered estimates on the stock due to the sharp decline in prices over the last month of U.S. lumber and structural panels.
• The home improvement retail group declined close to 2 percent. A small brokerage firm lowered its price target on Lowe’s Cos. to $27 from $30.

Opportunities

• There may be an opportunity for gain in M&A (merger & acquisition) transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable timeframe, it could be a threat to stock prices.
• As governments around the world begin to wind down the monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.

Tags: Acquisition Transactions, Ameren Corp, Best Buy, Best Buy Co, Brokerage Firm, Centerpoint Energy, Gamestop Corp, Gold, Gold Bullion, Hardware Group, Iphones, Lowe S, Market Diary, Materials Sector, Newmont Mining, Nextera, Pepco Holdings, Pinnacle West, Price Target, Sunoco Inc, Weyerhaeuser Co
Posted in Energy & Natural Resources, Gold, Markets, Oil and Gas, US Stocks | Comments Off

Index Summary and U.S. Equity Market Diary (4/24/2010)

Saturday, April 24th, 2010

Index Summary Diary (4/24/2010)

• The major market indices were mixed this week. The Dow Jones Industrial Index rose 1.68 percent. The S&P 500 Stock Index advanced 2.11 percent, while the Nasdaq Composite finished 1.97 percent higher.
• Barra Growth underperformed Barra Value as Barra Value finished 2.20 percent higher while Barra Growth rose 2.02 percent. The Russell 2000 closed the week with a gain of 3.82 percent.
• The Hang Seng Composite finished lower by 2.38 percent; Taiwan was down 1.32 percent and the Kospi advanced 0.15 percent.
• The 10-year Treasury bond yield closed at 3.82 percent, up 5 basis points for the week.

Domestic Equity Market Diary (4/24/2010)

The figure shows the performance of each sector in the S&P 500 Index for the week. Energy was the best-performing sector up 4.2 percent. Other sectors that performed well were healthcare, consumer staples and telecom services.

Nabors Industries Ltd., up 15.8 percent, was the best-performing stock within the energy sector. Other top energy stocks were Baker Hughes, El Paso Corp., BJ Services and Smith International.

Strengths

• The homebuilding group was the best-performing group for the week, rising 18 percent. March new home sales rose 26.9 percent from February to an annual pace of 410,000, besting the consensus estimate. The inventory of new homes on the market fell to a 6.7 month supply in March from an 8.6 month supply in February. D.R. Horton Inc, Lennar Corp, and Pulte Group Inc all increased sharply.
• Weyerhaeuser Co. led the forest products group to outperform, gaining 11 percent. The large timber firm moved forward last week on the company’s plan to convert into a REIT (real estate investment trust) by obtaining shareholder approval of a plan that calls for issuing shares to enable the necessary payout required for the conversion. The stock was also likely aided by the home sales data.
• Residential REITS also outperformed, rising 10 percent. Investors appear to be anticipating a decrease in the apartment vacancy rates and an increase in apartment rents as the economy improves. Apartment Investment & Management Co, AvalonBay Communities Inc and Equity Residential all increased during the week.

Weaknesses

• The thrifts & mortgage finance group was the worst-performing group, down 4 percent. Group member Hudson City Bancorp Inc reported quarterly earnings which were slightly below the consensus estimate and it reported an increase in non-performing loans.
• Gilead Sciences led the biotechnology group to underperform. The company lowered its full-year revenue forecast due to anticipated effects the new healthcare legislation.
• The healthcare equipment group underperformed, losing 3 percent. Baxter International Inc lowered its 2010 revenue forecast and earnings. The revised forecast includes expected impacts of the healthcare legislation.

Opportunities

• There may be an opportunity for gain in M&A (merger & acquisition) transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Threats

• Should investors’ expectations for an improving economy not come to fruition on a reasonable time frame, it could be a threat to stock prices.
• As governments around the world begin to wind-down the monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.

Tags: 10 Year Treasury, Bj Services, Consensus Estimate, Consumer Staples, D R Horton Inc, Dow Jones Industrial, Dow Jones Industrial Index, energy stocks, Estate Investment Trust, Index Summary, International Strengths, Lennar Corp, Major Market Indices, Market Diary, Nabors Industries Ltd, Nasdaq Composite, Real Estate Investment Trust, Shareholder Approval, Treasury Bond Yield, Weyerhaeuser Co
Posted in Markets, US Stocks | Comments Off