Stock Market Wrapup Feb. 28
Stocks staged a partial recovery from yesterday's massive sell-off, buoyed by bargain hunting and some soothing words about the economy from Federal Reserve Chairman Ben Bernanke. After opening strongly, stocks traded unevenly. They briefly dipped lower only to rebound sharply by mid-morning before settling into a comfortable trading range for the rest of the day. Bonds reversed course as well. The 10-year Treasury note pulled back, adding 4 basis points after dropping -12 bp yesterday. The benchmark bond closed yielding 4.55%. Crude oil prices inched higher.
Testifying before the House Banking Committee today, Bernanke said "there didn't seem to be any single trigger" to yesterday's sell-off and that he didn't see much point in revisiting individual news events from yesterday. More important for today's market action is that he re-affirmed the comments he made before the Congress earlier in the month. Bernanke said the Fed is still "looking for moderate growth in the economy going forward." He also said that while the central bank is concerned enough about the subprime mortgage market to provide "guidance to lenders about proper procedures for underwriting," he added that the Fed didn't see any signs that problems in the subprime arena were spreading into the broader mortgage market, or dampening sales activity.
Housing, however, remains a murky picture. Yesterday, the National Association of Realtors said sales of existing homes accelerated at their fastest pace in seven months, spurred on by falling prices. However, the Commerce Department reported today that sales of new homes continue to suffer, plummeting -16.6% in January from December, the sharpest one-month decline in 13 years. The economy also grew more slowly in Q4 of last year than previously forecasted, the Commerce Department said in a separate report. GDP grew a revised 2.2% last quarter, not the 3.5% initially forecast. The downward revision was expected.
Home improvement retailer Home Depot (NYSE: HD - News) added to the housing picture by saying it doesn't expect the residential construction market to start improving until the end of this year and early next year. As a result, the company predicted that its earnings will decline between -4% to -9% this year and that sales growth will be flat to up 2%. The company nonetheless plans to invest up to $2.2 billion this year in improvements to its business. The figures were contained in a news release distributed in conjunction with an investor meeting today.
Among the day's top-performing stocks was Sprint Nextel (NYSE: S - News). The stock added 5% after the company announced better-than-expected results. The wireless carrier delivered a 32% increase in its Q4 profit. While the company increased its overall subscriber count, many were less-profitable "pay-as-you-go" customers. Monthly subscribers, which are more profitable, continue to defect from Nextel, which has suffered from quality issues and outdated phones. Subscribers can read our full analysis of Sprint's results in today's issue.
Merck (NYSE: MRK - News) produced a solid advance today after the drugmaker said it anticipates better-than-expected Q1 earnings and raised its full-year EPS guidance. The stock gained 2% in today's trading. Martha Stewart Living Omnimedia (NYSE: MSO - News), meanwhile, delivered a five-fold increase in its Q4 profit. The company said new products and strength in all of its businesses helped produce earnings of $16.2 million, or 31 cents a share, compared to $2.95 million, or 6 cents a share, last year. Revenue rose 15% to $97 million.
Published by BullMarket.com
Testifying before the House Banking Committee today, Bernanke said "there didn't seem to be any single trigger" to yesterday's sell-off and that he didn't see much point in revisiting individual news events from yesterday. More important for today's market action is that he re-affirmed the comments he made before the Congress earlier in the month. Bernanke said the Fed is still "looking for moderate growth in the economy going forward." He also said that while the central bank is concerned enough about the subprime mortgage market to provide "guidance to lenders about proper procedures for underwriting," he added that the Fed didn't see any signs that problems in the subprime arena were spreading into the broader mortgage market, or dampening sales activity.
Housing, however, remains a murky picture. Yesterday, the National Association of Realtors said sales of existing homes accelerated at their fastest pace in seven months, spurred on by falling prices. However, the Commerce Department reported today that sales of new homes continue to suffer, plummeting -16.6% in January from December, the sharpest one-month decline in 13 years. The economy also grew more slowly in Q4 of last year than previously forecasted, the Commerce Department said in a separate report. GDP grew a revised 2.2% last quarter, not the 3.5% initially forecast. The downward revision was expected.
Home improvement retailer Home Depot (NYSE: HD - News) added to the housing picture by saying it doesn't expect the residential construction market to start improving until the end of this year and early next year. As a result, the company predicted that its earnings will decline between -4% to -9% this year and that sales growth will be flat to up 2%. The company nonetheless plans to invest up to $2.2 billion this year in improvements to its business. The figures were contained in a news release distributed in conjunction with an investor meeting today.
Among the day's top-performing stocks was Sprint Nextel (NYSE: S - News). The stock added 5% after the company announced better-than-expected results. The wireless carrier delivered a 32% increase in its Q4 profit. While the company increased its overall subscriber count, many were less-profitable "pay-as-you-go" customers. Monthly subscribers, which are more profitable, continue to defect from Nextel, which has suffered from quality issues and outdated phones. Subscribers can read our full analysis of Sprint's results in today's issue.
Merck (NYSE: MRK - News) produced a solid advance today after the drugmaker said it anticipates better-than-expected Q1 earnings and raised its full-year EPS guidance. The stock gained 2% in today's trading. Martha Stewart Living Omnimedia (NYSE: MSO - News), meanwhile, delivered a five-fold increase in its Q4 profit. The company said new products and strength in all of its businesses helped produce earnings of $16.2 million, or 31 cents a share, compared to $2.95 million, or 6 cents a share, last year. Revenue rose 15% to $97 million.
Published by BullMarket.com
posted by Stock Administrator @ 6:45 PM
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