Jim Cramer Blog

A lack of bullish news pushed stocks lower Friday, leaving the major market indices in the red for the week. The Dow ($INDU) fell 56.80 points on the session to close at 12,580.83. The S&P 500 ($SPX) gave up 10.25 points to 1,438.06 and the NASDAQ ($COMPQ) lost 28.85 points to close at 2,459.82. Volume was solid with the NYSE trading 1.64 billion shares and the Naz turning over 2.22 billion. Market breadth was negative by a 10-to-23 and 10-to-20 ratio on the Big Board and Naz respectively.Despite a lack of economic data Friday, stocks were hurt by comments from several Fed leaders. Fed President’s William Poole and Richard Fisher both were a bit hawkish on inflation in speeches made today. Both stated that inflation remains a major concern and Mr. Fisher stated that he couldn’t yet rule out future rate hikes to halt inflation. For most the session, oil prices traded above the key $60 level. But by the end of the day, crude was up just 18-cents to close at $59.89. Despite a lot of volatility this past week, oil prices saw little net movement, but remain a concern given the cold weather and geopolitical tensions in the Middle East. The chip sector got off to a good start Friday when J.P. Morgan raised its rating on the sector to “Buy.” However, this news was pushed aside once Micron (MU) announced that prices for memory chips could fall 30 to 40 percent this quarter. MU shares closed the session with a loss of 2.64 percent with the Philly Semiconductor Index ($SOX) off 1.38 percent to 463.19. Intraday, the SOX hit a high at 476.11 on the J.P. Morgan comments that pointed to a bottom in the chip sector. One positive on the session came from the auto sector after General Motors (GM), Ford (F) and Daimler Chrysler (DCX) were all upgraded. Deutsche Bank moved GM and F to a “Buy” rating from “Hold” on the view negotiations over union health care benefits will work out. Citigroup raised its rating on DCX higher as well ahead of the company’s restructuring plan set to be announced next week. All three stocks moved higher, up 6.5 percent, 2.1 percent and 2.1 percent respectively. In earnings news, Mastercard (MA) managed to make a profit in the fourth-quarter and also raised its dividend. Even so, the stock fell nearly 10 percent on a warning from MA that margins could be pressured in 2007. Although earnings have been strong in the fourth-quarter for corporate America, there are concerns about whether this strength will continue into 2007.
Jody Osborne

Labels: DCX, F, GM, MA