Wall St Preview
AAPL, CRUS, QCOM, RIMM,, T, S, VZ, UBS, DELL, HPQ, STX, AMZN, HWD, BLLAF, JPM, BAC, XLF, WFC
Monday’s session opened lower on pre-market weakness in Apple NASDAQ:AAPL 501.75, -18.55 weighed on the tech-heavy NAS.
The S&P 500 marked its session low in the 1465 early in the session. The benchmark index, reversed and spent the remainder of the session climbing back near its flat line before finishing with a slight loss.
DJIA 13507.32+18.89 (0.14%) NAS 3117.50-8.13 (-0.26%) S&P 5001470.68-1.37 (-0.09%)
Volume and Breadth: trade was light, about 5.6-B/shrs traded on the NYSE, the NAS and the NYSE MKT, compared with the Y 2012 average daily closing volume of about 6.45-B/shrs. Decliners were about even with advancers on the NYSE, and decliners outpaced advancers on the NAS by about 12 to 11.
Strong: Materials, Consumer Staples
Weak: Financials, Technology, Telecom
Apple lost 3.6% after being down 4.5% in pre-market trade. The under-performance followed reports from the Nikkei and the WS-J indicating the largest tech company has cut its orders for iPhone 5 parts due to lowered demand. The early selling pushed the shares below $500 for the 1st time in 11 months.
Apple suppliers were also pressured by the news as Qualcomm NASDAQ:QCOM 64.24, -0.66, and Cirrus Logic NASDAQ:CRUS 28.62, -2.96 lost 1.0% and 9.4% respectively.
Note: several analysts have come out in defense of Apple saying the story is not a recent development.
Research In Motion NASDAQ:RIMM 14.95, +1.39 was in the spotlight. Friday, the stock surged over 15.0% after photos of the new Blackberry 10 handset became available on the Internet. Monday, Research In Motion settled higher by 10.3%, which puts it 27.0% above Friday’s opening price.
Telecom stocks lagged the broader market after morning reports hinted at slowing Apple iPhone demand.
The 3 major carriers offeingr the device on their networks traded lower in response to the developments. AT&T NYSE:T 34.02, -0.25, Sprint Nextel NYSE:S 5.69, -0.23, and Verizon Communications NYSE:VZ 42.59, -0.71 posted losses of 0.7%, 3.9%, and 1.6% respectively.
Note: UBS NYSE:UBSdowngraded Sprint and Verizon to ‘Neutral.’ In addition, JPMorgan Chase also downgraded Sprint to ‘Neutral’ from ‘Overweight.’
Dell NASDAQ: DELL 12.29, +1.41 was on the move today after it was reported the PC maker is in talks with private equity regarding a potential buyout. Dell rose 13.0% on the news, and several related names moved higher as well. Hewlett-Packard NYSE:HPQ 16.95, +0.79, and Seagate NYSE:STX 33.97, +0.68 saw gains of 4.9% and 2.0% respectively.
Discretionary stocks showed relative weakness in early trade, but the sector settled with slim gains. Amazon.com NASDAQ:AMZN 272.73, +4.79 advanced as the online retailer hit a new all-time high ar 274.26.
Harry Winston Diamond NYSE:HWD 15.08, +0.62 rose by 4.3% after the company agreed to sell its luxury brand Diamond jewelry and timepiece division to the Swatch Group for $750-M. Swatch will assume up to $250-M of pro-forma net debt.
VF Corporation NYSE:VFC 153.88, +4.88 rose 3.3% after the company confirmed it has submitted a bid to acquire Billabong International PINK:BLLAF for AUD 1.10/share.
Financials underperformed and the SPDR Financial Select Sector ETF NYSEArca:XLF 17.:06, -0.05 slipped 0.3%.
The financial sector saw notable gains in recent weeks, but last Friday’s earnings report from Wells Fargo NYSE:WFC 34.77, -0.33 failed to please investors. Though the bank exceeded analyst expectations on the top and the bottom line, a decrease in net interest margins and mortgage originations weighed.
Monday, the space traded lower with most majors scheduled to reveal Q-4 results this week.
Looking at individual components, Bank of America NYSE:BAC 11.47, -0.16. and JPMorgan Chase NYSE:JPM 45.88, -0.26 lost 1.4% and 0.6% respectively.
US Major Market Indexes Technical Analysis
|14 Jan 2013
|14 Jan 2013
|14 Jan 2013
Commodities: The growing optimism on the outlook for the world’s biggest economies helped commodity prices recover from last week’s decline. Oil also benefited from a resurfacing of fears about a disruption of supply from the Middle East.
A cut in Saudi Arabian production last month, pipeline sabotage in Yemen and a weather-related drop in Iraqi shipments have reduced output.
Fighting in Syria and Iranian naval exercises in the strategically important Strait of Hormuz at the mouth of the Gulf have reminded investors of the risk of wider disruption to Middle East supply.
Brent crude gained 1.1% to 111.88 bbl, jumping in afternoon trading as investors weighed a statement from Saudi Arabia disputing claims OPEC’s largest producer has altered its output policy. US WTI light Crude was up 0.7% at 94.25 bbl.
Copper edged down 0.5% to $8,000.15 a ton, Gold and Silver rose too.
Looking at Tuesdays economic data, December retail sales, retail sales ex-auto, PPI, core PPI, and the January Empire Manufacturing Index will all be reported at 8:30a EST. November business inventories will be released at 10:00a EST.
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.