qualcomm

U.S. Equities Generally Lower as European Officials Struggle with Greece Situation

U.S. Session Key Developments

•    European Union Leaders Continue to Discuss Greece Bailout and Possible IMF Assistance
•    Continuing Jobless Claims Higher Than Expected in First Two Weeks of March
•    Treasuries Falter on Weak Seven-Year Auction, U.S. Dollar Index Closes Above 82 Level

U.S. stocks disappointed for a second day as EU officials struggled to agree on the actions necessary to avoid a full-blown fiscal crisis in Greece.  The uncertainty spooked investors during the U.S. session and contributed to a near 2 point decline in the index to 1,165.  The main contention in talks today centered around use of the IMF to contribute to a bailout package.  French and German officials came to an agreement that would make European nations responsible for approximately half of all aid to Greece, while the Washington-based IMF would provide the rest.  ECB President Jean-Claude Trichet strongly resented the move, however, saying that any IMF help would be “very, very bad.”  The euro currency erased early gains following the Trichet commentary and closed lower against the U.S. dollar for a third consecutive day.

U.S. stocks initially traded higher on the session, despite a worse-than-expected continuing claims report for the week ended March 13.  The S&P traded above the 1180 level intraday, but Trichet’s comments quickly turned sentiment sour.  Furthering the bearish case in the afternoon was a weak U.S. Treasury sale of 7-year notes which only drew 3.374 percent and a 2.61 bid/cover ratio.  Traders sold off longer-term U.S. debt for a second day, as 10-year yields and 30-year yields each rose 3 basis points to 3.87 percent and 4.75 percent, respectively.  As for currencies, the greenback continued its strong run, pushing the U.S. Dollar Index to its highest close since May.  The Japanese Yen was especially weak, dropping nearly half a percent against the Dollar.

DJIA 30                     10,841.21                             +5.06                       +0.05%
The Dow Jones Industrial Average was the only U.S. index to close higher today, on a mixed session in which sixteen of the 30 Dow stocks gained.  Disney shares posted the strongest gain on the index today, rallying over 2 percent, while Microsoft and American Express added 1 percent each.  Du Pont was the biggest laggard today, dropping 2.4 percent, while Alcoa fell 1.4 percent and Pfizer shed 1.2 percent.

S&P 500                         1,165.73                             -1.99                        -0.17%
The broad-based S&P 500 fell for a second consecutive day as basic materials and energy shares dropped over 1 percent each despite steady commodity prices.  Consol energy shares plunged nearly 6 percent for the worst performance among basic materials shares, while Peabody Energy and Massey Energy fell nearly 5 percent.  Titanium Metals fell 4.7 percent, snapping a four-day rally for the stock.

NASDAQ                     2,397.41                             -1.35                       -0.06%
Shares on the tech-heavy Nasdaq ticked slightly lower overall due to weakness in commodity stocks and telecommunications.  Technology shares managed to gain 0.1 percent, however, as shares of Qualcomm gained over 4.8 percent on the day.  The chipmaker boosted its fiscal second-quarter outlook today, citing strength in its licensing business and improved chip sales.

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com

qualcomm

U.S. Equities Gain For Third Consecutive Session

U.S. Session Key Developments

•    Sovereign Debt Concerns Ease as Greece Prepares For More Deficit Cuts
•    February Vehicle Sales Announced After Market Close, Fall Short of Expectations
•    Commodities Trade Higher as Greenback Generally Weaker

U.S. stocks gained for a third consecutive day, following a strong session in Europe, as investor concerns regarding a Greece debt default continued to ease.  The broad-based S&P 500 rose 2 points to 1118, the highest close for the index since January 20.  The gains in U.S. stocks were a continuation of the European session today, in which the FTSE, CAC, and DAX each gained over 1 percent.  Sovereign debt concerns in the region eased for a second day, as yields on 10-year Greek bonds fell 10 basis points to 6.14 percent.  Leaders of the Greek government plan to announce additional cuts of $6.5 billion tomorrow to help reign in the country’s massive debt-to-GDP ratio that currently sits at three times the acceptable European Union level.  The news fueled speculation that other EU nations would provide aid to Greece and boosted risk appetite across the globe.  The positive momentum wore off by the end of the U.S. session, however, as the Dow Jones Industrial Average dipped into the red during the last hour of trading before closing slightly above even.  There was no economic data today to drive market sentiment as the only data release took place an hour after U.S. markets closed.  The data showed that domestic vehicle sales were slightly lower than expected in February and that ABC consumer confidence ticked slightly higher last week.

On the commodities front, crude oil had a strong showing and rallied over 1 percent to $79.68 a barrel.  Precious metals had an even better day as gold futures posted their largest gain in two weeks to $1137 and silver futures rose 3 percent to $17.06.  Rising metal prices coincided with a relatively weak dollar, as the U.S. Dollar Index fell for the fourth time in five days.  The greenback still managed to gain against the British Pound, however, driving cable lower for a sixth consecutive session.  Looking ahead, the ISM Non-Manufacturing Composite report and ADP employment report will be released tomorrow morning, while the Fed will release its Beige Book in the latter half of the trading day.

DJIA 30                     10,405.98                      +2.19                       +0.02%
The Dow Jones Industrial Average closed slightly higher today, led by a near half-percent gain for industrials and oil & gas stocks.  Chevron led commodity stocks with a 0.7 percent gain due to rising oil prices, while Boeing and 3M gained 0.6 percent each to lead industrials.  Disney was the best overall performer on the Dow today, adding over 1 percent as fans await the opening of Alice in Wonderland in theaters on March 5.  The main laggards of the index today were Microsoft and Bank of America, which dropped 1.9 percent and 1.5 percent respectively.  The U.S. Treasury announced yesterday its intentions to auction off $272 million warrants to buy stock in BofA.

S&P 500                       1,118.31                        +2.60                         +0.23%
The broad-based S&P 500 rose to its highest level since January as rising commodity prices helped boost basic materials and energy shares.  Massey Energy led basic materials shares with a 4 percent gain, followed by Consol Energy and Newmont Mining which added nearly 3 percent each.  The coal sector posted strong gains today amid speculation that Massey will acquire Patriot Coal Corp., the fourth-largest U.S. coal producer.  Tesoro Corp. posted a 5 percent gain to lead a strong showing for energy stocks.  Financial shares added to the bullish momentum after bank analyst Dick Bove said that bank earnings over the next few years “will soar.”

NASDAQ                     2,280.79                       +7.22                       +0.32%
The tech-heavy Nasdaq was the best performer among major U.S. indices although technology stocks posted a minimal gain.  Qualcomm led the heaviest-weighted fifteen tech stocks on the index, gaining 6.6 percent after the chip maker boosted its dividend by 12 percent and announced a $3 billion stock buyback program.  Internet search giant Google rose over 1.5 percent on news that the company agreed to purchase online photography site Picnik.

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com

qualcomm

U.S. Equities Trim Weekly Loss On Fourth Quarter GDP Revision

U.S. Session Key Developments

•    U.S. Fourth Quarter GDP Revised Higher to 5.9 Percent, Personal Consumption Lower
•    Existing-Home Sales Drop in January, Chicago Business Gauge Better-Than-Expected
•    Commodities Trade Higher as Greenback Falls Against Major Cross Currencies

U.S. stocks posted a slight gain in the final day of trading this week, as estimates for fourth quarter economic growth were shown to be higher than previously thought.  Despite today’s gain, however, the S&P 500 closed the week down 0.4 percent to 1,104.  The market-moving GDP revision was announced one hour before the opening bell and showed that the U.S. economy expanded 5.9 percent in the fourth quarter of 2009, better than the 5.7 percent initial estimate.  The GDP data was revised higher thanks to stronger business investment in the quarter and a greater contribution from inventories.  The personal consumption aspect, however, was revised lower to 1.7 percent from a 2.0 percent initial reading.  Overall, stocks traded mostly sideways during the session as other economic data released today was mixed.  The Chicago Purchasing Managers Index unexpectedly rose from 61.5 to 62.6 in February, but the University of Michigan Confidence indicator fell in the month and existing home sales disappointed for January.  Home sales were expected to rise 0.9 percent in January but instead were shown to have fallen 7.2 percent, after declining 16.2 percent in the month prior.

Globally, stocks had a strong day as the major European indices and China’s Hang Seng Index each traded at least 1 percent higher.  Investor risk appetite made a strong return as commodities joined stocks in trading higher across the board.  Crude oil prices gained for the third time this week, adding nearly 2 percent to $79 a barrel, while gold futures posted a second consecutive gain and closed the week near the $1120 level.  As for currencies, the U.S. Dollar was generally weak, falling against most of its major counterparts, including the euro.  The U.S. Dollar Index fell for a third consecutive day, but held above the 80 level for a seventh consecutive session.

DJIA 30                     10,325.26                      +4.23                       +0.04%
The Dow Jones Industrial Average closed slightly above even on a low-volume trading day.  Volume on U.S. exchanges today was slightly under 8 billion shares, 11 percent less than the 2010 average due to a snow storm in New York City and the surrounding area.  JPMorgan Chase led the index with a 3.2 percent gain after analysts at Barclays recommended buying the bank’s shares.  The bullish commentary led to a near full percent gain among financial shares.  Other stocks that outperformed the index included General Electric and drug maker Merck, which each added 0.8 percent on the day.  The worst performer on the index was Kraft Foods, which fell over 1.3 percent on the day.

S&P 500                     1,104.49                         +1.55                         +0.14%
The broad-based S&P 500 posted a small gain in the final day of trading this week on strength in financials and basic materials shares.  Financials rose nearly 0.7 percent on bullish commentary from Barclays analysts as well as commentary from Fed Chairman Ben Bernanke in the past two days that suggested rates would remain low for the foreseeable future.  The basic materials sector added 0.3 percent today, as commodities generally traded higher during the session.  Mining company Freeport McMoRan gained over 1 percent, while Barrick Gold Corp. added 0.2 percent on higher precious metals prices.  On the downside, AIG fell 10 percent for the biggest loss  on the index after posting a fourth-quarter net loss of $8.8 billion.

NASDAQ                     2,238.26                         +4.04                         +0.18%
The tech-heavy Nasdaq was the best performer among major U.S. indices as technology stocks posted a slight gain.  Among the heaviest-weighted fifteen tech stocks on the index, smart phone competitors Research in Motion and Apple posted the largest gains.  Shares of each company rose at least 1.2 percent as shares of Palm, another smart phone competitor, sank on news that company sales may be very weak this year.  Qualcomm was the worst performer among the large Nasdaq tech stocks, dropping 1.3 percent on the session.

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com