US Stocks: Wall Street Preview
US Stocks: Wall Street Preview
KRFT, CPB, BUD, STZ, HNZ, BRK-A, CTL, WFM
Friday, the February Empire Manufacturing Index will be released at 8:30 EST; December net long-term TIC flows will be reported at 9:00 EST; January industrial production and capacity utilization will cross the wires at 9:15 EST.
The last economic report of the day will come from the University of Michigan where the preliminary February Michigan Consumer Sentiment Survey will be released at 9:55 EST.
Notable earnings: Campbell Soup NYSE:CPB 38.72, +0.54, and Kraft Foods NASDAQ:KRFT 47.16, +0.39 will report their Quarterly results.
US Major Market Indexes Technical Analysis
Date Symbol Price Technical Analysis Support Resistance
14 Feb 2013 QQQ 68 Bullish (0.42) 67.45 68.18
14 Feb 2013 DIA 139.84 Bullish (0.49) 139.75 141.30
14 Feb 2013 SPY 152.36 Bullish (0.48) 152.15 153.29
The major averages ended little changed with the S&P 500 tacking on 0.1%. The benchmark index settled slightly higher after spending the majority of the day within a 2 pt range of Wednesday’s close.
DJIA -9.52 at 13973.39, NAS +1.78 at 3198.66, S&P 500 +1.05 at 1521.38
Thursday’s floor volume saw the highest total of the week, but with 670-M/shares changing hands on the NYSE, activity remained below average
Strong: Consumer Staples, Energy Weak: Telecoms, Materials, Utilities
US equities opened soft with the downbeat European trade contributing to early weakness. This resulted from disappointing fourth quarter GDP reports from France, Germany, Greece, Italy, and Portugal. All 5 countries saw their economies contract during the final 3 months of Y 2012. As a result, the Q-4 Eurozone GDP shrank 0.6% Q-Q
The weak economic data reported across the continent resulted in EUR weakness, which translated into strength for the USD. The dollar index added 0.4% and settled near 80.40.
Despite the strength of the Greenback, Crude Oil rose. The energy component rose 0.4% and settled just under 97.40 bbl. The strength of Crude Oil contributed to the energy sector ending as the day’s top performer.
Another pocket of strength could be found in consumer staples.
The sector outperformed for the duration of the session after HJ Heinz NYSE:HNZ 72.50, +12.02 agreed to be acquired by a group including Warren Buffet’s Berkshire Hathaway NYSE:BRK-B 99.21, +1.24 for $28-B, 72.50 per share. The agreed price represents a 20% premium to Heinz’s Wednesday close.
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Constellation Brands NYSE:STZ 43.75, +11.87) soared 37.2% after the company, along with Anheuser Busch Inbev NYSE:BUD 92.76, +4.50), announced a revised agreement for the divesture of the US business of Grupo Modelo. This after the original deal was met with a regulatory challenge by the Us DOJ.
Meanwhile Whole Foods NYSE:WFM 87.50, -9.40 fell 9.7% after its upbeat report was combined with narrowed comparable store sales growth estimate.
While energy and consumer staples outperformed, the telecom sector was the biggest laggard.
Century Link NYSE:CTL 32.27, -9.42 fell 22.6% after the company missed on the bottom line and lowered its quarterly dividend to0.54 from $0.725. Century Link received 6 downgrades following its Quarterly report.
Telecoms (-2.0%) underperformed notably while utilities (-0.9%) and materials (-0.4%) also registered losses. On the upside, energy (+0.5%) led the way as financials (+0.3%), health care (+0.2%), and consumer staples (+0.1%) outperformed as well.
Overseas economic data wil plentiful, that was not the case in the US.
The latest weekly initial jobless claims count totaled 341,000, which was lower than the 365,000 that had been expected by the consensus. The reading was a positive surprise but it remains unclear if today’s figure was an aberration or a break from the 350,000-400,000 range observed for much of last year.
Note: next week’s report may see some distortions related to Snowstorm Nemo.
The afternoon headlines indicated that Senate Democrats have reached a deal to avoid the package of automatic spending cuts known as the “sequester.” Earlier, House Speaker John Boehner (R, Ohio) said he will find a way to work on the sequester if the Senate acts.
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Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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