7 Stocks Fell For Every 5 That Rose. "The Recovery Is Over. Don't Expect Much."

Discussion in 'Trading' started by ByLoSellHi, Apr 24, 2007.

  1. Let's see if tomorrow's numbers broadside the ship.

    Most U.S. Stocks Fall as Confidence,

    Home Sales Trail Forecasts

    By Nick Baker


    April 24 (Bloomberg) --
    Most U.S. stocks declined after consumer confidence and home sales trailed forecasts, reviving concern the economy is slowing. An expanded share repurchase by International Business Machines Corp. lifted the Dow Jones Industrial Average to its eighth gain in nine days.

    AT&T Inc. led telephone companies to the steepest retreat in the Standard & Poor's 500 Index after subscribers rose less than analysts expected. Retailers declined after Target Corp., the nation's second-largest discount chain, cut its April sales growth projection.

    Seven stocks fell for every five that gained on the New York Stock Exchange after Americans' confidence slumped to the lowest in eight months, sapped by concerns about increasing fuel costs and a wave of mortgage defaults. Sales of previously owned homes in the U.S. dropped in March to the lowest in almost four years, delaying an improvement in housing.

    ``The recovery is over. Now it's just a question of how far and how fast the economy will slow down,'' said Richard Weiss, who manages about $50 billion as chief investment officer at City National Bank in Beverly Hills, California. ``We don't expect much out of equities this year.''

    The S&P 500 slipped 0.52 to 1480.41. The Dow average added 34.54, or 0.3 percent, to 12,953.94. The Nasdaq Composite Index advanced 0.87 to 2524.54.

    Benchmark indexes fell yesterday after crude oil rose and concern mounted that home loan defaults will accelerate, overshadowing the biggest day for takeovers since 2000.

    Some 1.64 billion shares changed hands on the Big Board today, 3 percent more than the three-month daily average.

    AT&T Drops

    AT&T lost 67 cents to $39.10. While the biggest U.S. mobile phone service provider said profit almost doubled last quarter, its addition of 1.2 million subscribers fell short of some estimates. UBS AG analyst John Hodulik expected 1.5 million.

    A measure of telephone stocks in the S&P 500 declined 0.7 percent for the worst performance among 10 industries.

    Target slumped $1.10 to $60.33 after saying cold weather kept shoppers away this month. Sales at stores open at least a year for March and April combined will rise as much as 4 percent, less than its projection of a 4 percent to 6 percent gain, the company said.

    Industrywide, sales at stores open at least a year declined 0.3 percent in the seven days through April 21 from the previous week, according to the International Council of Shopping Centers and UBS Securities LLC. Sales for all of April may be unchanged from 2006, the ICSC and UBS said.

    Wal-Mart Stores Inc., which this month said April sales may be unchanged or decline, slipped 24 cents to $48.69. Gap Inc., the nation's biggest clothing retailer, fell 17 cents to $18.74. Retailers in the S&P 500 dropped 0.6 percent as a group.

    Economy Watch

    Reports today showing slower housing resales and deteriorating consumer confidence may signal the economy, which is projected to have grown last quarter at the weakest pace in more than a year, won't accelerate in coming months.

    Existing home sales slid 8.4 percent in March to an annual rate of 6.12 million, the National Association of Realtors said. A separate private report showed home-price declines in 20 major cities accelerated in February. The Conference Board's consumer confidence index fell to 104 from 108.2.

    Treasuries gained, pushing the benchmark 10-year note's yield to a three-week low and the dollar dropped to within a half-cent of a record low against the euro. Crude oil retreated in New York.

    IBM, Texas Instruments

    Gains in IBM and Texas Instruments Inc. pushed computer- related shares in the S&P 500 up 0.8 percent, the top performance among 10 industries.

    IBM, the world's largest computer-services company, gained $3.28 to $98.49. Its 3.5 percent advance was the steepest in the Dow average and the most since October 2004. IBM boosted its share-buyback program by $15 billion and raised its quarterly dividend by 33 percent to 40 cents.

    Texas Instruments jumped $2.51, or 7.7 percent, to $34.92 for its best advance since March 2006. The world's largest maker of mobile-phone chips forecast earnings that exceeded analysts' estimates after saying it recovered from an inventory glut and daily sales ``increased significantly'' in March from February across a wide range of products.

    Second-quarter profit, excluding some costs, will be as much as 45 cents a share. Analysts expected 38 cents, the average of estimates compiled by Bloomberg.

    ``Business in general, here and around the world, is strong enough to provide more demand for technology,'' said Richard Sichel, who helps oversees $1.5 billion as chief investment officer of Philadelphia Trust Co. in Philadelphia. ``Tech could become more of a standout.''

    Whirlpool, DuPont

    Among other companies that reported earnings, Whirlpool Corp. said first-quarter profit from continuing operations was $1.55 a share. Analysts expected $1.13, on average. Shares of the world's largest appliance maker surged $12.50 to $102.85. Its 14 percent gain was the biggest since September 1997.

    DuPont Co. added 67 cents to $49.86. The No. 3 U.S. chemical maker said first-quarter profit climbed 16 percent after soaring demand for ethanol in the U.S. spurred sales of corn seed.

    Express Scripts Inc. jumped $8.08 to a record $96.98 after profit topped analysts' estimates and the company raised its forecast. The third-largest U.S. manager of drug benefits got a boost from sales of generic versions of drugs such as Pfizer Inc.'s antidepressant Zoloft and Merck & Co.'s cholesterol pill Zocor.


    Paccar Inc. climbed $7.77, or 9.9 percent, to $86.56 for the biggest surge since March 2000. The No. 3 truckmaker said first- quarter profit climbed 7 percent on growth in Europe, beating analysts' estimates.

    Better-than-expected earnings spurred analysts last week to boost first-quarter profit growth estimates at S&P 500 companies to 6.2 percent from 3.1 percent, Bloomberg data show.

    ``This economic expansion is very much intact,'' said Keith Wirtz, who manages $23 billion as chief investment officer of Fifth Third Asset Management in Cincinnati. ``We'll get better- than-average stock market returns this year.''

    Wirtz expects the S&P 500 to surpass 1600, climbing above the March 2000 record high of 1527.46 this year.

    Not all technology shares rose. Lexmark International Inc. lost $5.57, or 9 percent, to $56.44 for the steepest drop in the S&P 500. The No. 2 U.S. printer maker reported profit and sales that missed analysts' estimates after larger rival Hewlett- Packard Co. cut prices to win customers.

    Shares of Hewlett-Packard added 24 cents to $41.65.

    Juniper Networks Drops

    Juniper Networks Inc. dropped 24 cents to $20.87. The world's second-biggest maker of equipment for directing Internet traffic said first-quarter profit fell 12 percent as the company boosted research spending to compete with Cisco Systems Inc. Piper Jaffray & Co. cut Juniper to ``market perform'' from ``outperform.''

    The Russell 2000 Index, a benchmark for companies with a median market value of $681.2 million, lost 0.1 percent to 826.36. The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, retreated 0.1 percent to 14,972.49. Based on its decline, the value of stocks decreased by $14.2 billion.
  2. No I am a loser....

  3. But that was when you were perfecting your losing methods trading the ym.

    I assumed that once you perfected the art of losing, you would revert your technique, and make Tommy Wu type money.
  4. nkhoi

    nkhoi Moderator

    a loser perfects his losing game only when he is out of the game for good. :D
  5. I tell you...I will lose until the day i die...

  6. Mvic


    The $ could get very important fast. Until now stocks have been doing well in an environment of a falling $ as one might expect them to. But at some point the falling $ is going to hurt the economies of the people we are selling stuff too. Notice how the EEM stalled out the last few days and the falling $ is a major headwind in EM both in terms of equities but also in terms of exports and cost of imports. In short the falling $ represents a liquidity squeeze on the rest of the world but EMs especially.

    Also read that if the Chinese let the yuan appreciate against the $ it will create an immediate increase in the demand for oil as all of a sudden oil will be cheaper for the Chinese. This will mean higher oil prices and higher costs in the US. In fact if you consider the effect that China's artificially low yuan has on our own inflation figures any revaluing of yuan (and we all know it is a matter of when not if) will have a significant impact on US inflation.

    The late players to the carry trade (and there are many ) are taking on a huge risk with the $ at current levels. When you have people on Et employing a version of the carry trade you know that the weakest players are in.

    I know the bulls are having their party right now and good for them. I am skeptical because I see so many things lining up from the mispricing of risk, to the record levels of leverage by the weakest hands, to the pressure on margins world wide by the $ decline, to the quant models that are not based on all the possibilities just the recent rosy past, to the above, that I agree with Hussman when he makes the point that maybe markets move another 5% higher this year but what do you risk for that 5%. Since I am seeing a perfect storm of factors that could make any significant market decline turn in to a liquidity squeeze of epic proportions( that the Fed will large be unable to control) coming together, I think the risk being long for all but the most nimble and careful traders is not worth it for 5 or even 10%. The fact that everyone and their mother seems to be long and loving it with little if any protection or even concern just adds to my conviction that this period will end no differently than all the previous periods like it in history because while black boxes can run things in the short term there will come a time where market action will not conform to the models they have been programmed with and then human psychology will take over once again.
  7. Mvic


    So will we all, but hopefully you will also win a little (or alot) more than you lose. :)
  8. I have downgraded....

    #10     Apr 24, 2007