Week Ends on Four Day Winning Streak

Equity market prices in New York lifted until 11:00am ET, then fell into lower territory until a reversal from about 12:30pm into the close. The indices closed higher, but this was clearly a risk-averse trading day as the sector leaders were Consumer Healthcare (XLV +3.3%) and Consumer Staples (XLP +1.5%). Energy (XLE -0.9%) was the biggest loser. Volume was light.

Headlines will read that the market ended the week on a four-day winning streak, but observant traders were taking profits and writing calls.

Friday’s US economic data was a minor factor. Import Prices dropped -0.2% (-0.8% expected) and the Consumer Sentiment Index was 56.6 (vs. 55.0 anticipated).

Berkshire Hathaway (BRK.A) had its AAA credit rating cut by Fitch. In a politically correct move, Fitch headed the news release with a statement that no financially oriented holding company should have the highest rating due to market volatility.

Goldman Sachs removed Wal-Mart (WMT) from its conviction buy list, saying the shares would now be range-bound. WMT has encountered a number of analyst downgrades in recent months.

At the close, the DJIA (+53.92 +0.75% to 7223.98), S&P 500 (+5.81 +0.77% to 756.55) and NASDAQ (+5.40 +0.38% to 1431.50) were a tad higher but basically range-bound. The Toronto Composite (+21.12 +0.26% to 8303.39) and Venture Board (+5.55 +0.66% to 848.97) were acting the same.

The winning sector (Healthcare) was led by Healthcare Products ($RXP) and Drugs ($DRG), both up +3.2%. The losing sector (Financial) was led south by REITs ($DJR -2.4%) and Banks ($BKX -1.4%).

Among the Cara 100 stocks that lifted the most, SanDisk (SNDK +11.1%) soared on rumors that Toshiba Samsung Storage Technology Corp may bid for the company. TSST owned 51% by Toshiba and 49% by Samsung is similar to the Hitachi-LG Data Storage and Sony NEC Optiarc joint ventures within the data storage industry.

Other big winners among the Cara 100 high-quality watchlist companies, were several that have encountered extreme volatility, such as Vimpel-Communications (VIP +10.8%), Brunswick Corp (BC +10.1%) and Dow Chemical (DOW +8.0%), with the gains coming apparently from short-covering. Vimpel, Russia’s second largest mobile operator is engulfed in a Russia-Norway legal stand-off.

Among the Cara 100 losers were Swiss agribusiness company Syngentia (SYT -8.9%), which was downgraded by Credit Suisse from Out-Perform to Neutral. There was also a loss of -5.4% on Thursday. Deutsche Bank (DB -4.7%) encountered profit-taking after having some huge rallies, like +14.6% on Thursday and +19.5% on Tuesday.

Teck Corp (TCK +0.5%, but down -1.8% after-hours) is looking at different ways to restructure more than $6 billion in loans due at the end of October, arising from the ill-timed purchase of coal assets. The company has offered to sell fixed-rate securities to long-term investors that would come with an option to participate in any future rise in the price of coal, which may lower its cost of capital and provide the financing it requires.

I have made numerous changes in the Cara 100 list this week, which will be updated in the Week In Review.

Bonds drifted (-0.20% to 127.52), with the 30-, 10-, and 5-year yields at 3.672, 2.885 and 1.872 percent respectively. The T-Bill yield dropped to 0.190.

The $USD was flat (+0.02 to 87.36), while the Euro lifted a tad (+0.11% to 129.30). The Yen dropped (-0.21% to 102.10), while the Pound (+0.44% to 139.97) and Cdn Loonie (+0.0.74% to 78.83) both gained.

Oil prices ($WTIC -$0.94/bbl to 47.03) dropped back to the Monday closing price as traders look ahead to this weekend’s OPEC meeting, where the cartel must decide whether to implement another production cut or to enforce compliance with the previously announced cuts.

Gold remained flat for most of the day after rallying a bit in the early hours, to close up +$6.10/oz at 930.10.

Precious metal spot prices closed the week for gold, palladium, platinum and silver at: 927.20; 197; 1051.5; and 13.19, slipping a bit from the morning price.

Closing futures for the Euro, $USD, West Texas Oil, and the DJIA were: 129.01, 87.935, 47.03 and 7232, respectively.

Earlier in the day Friday, Asia-Pacific equity markets soared: Japan (+5.15% to 7569.3), Australia (+3.27% to 3294.7), Hong Kong (+4.37% to 12525.8) and India (+4.95% to 8756.6). Shanghai China (-0.24% to 2128.8) was soft for a third straight day.

At the close Friday, the French CAC (+0.47% to 2705.6); the German DAX (-0.07% to 3953.6), and the UK FTSE 100 (+1.12% to 3753.7) were mostly higher, but softened a bit during the day as the US market was in a pull-back during the morning. After the European close, the US markets lifted.

Finally, AP’s David Bauder wrapped up the Jon Stewart interview with Jim Cramer in a piece that well articulated comedian Stewart’s earnest and intentionally unfunny reprimand of CNBC’s gross irresponsibility as financial journalists. He also showed how CNBC friends dismissed the scolding, making the laughable assertion that nobody saw the problems early on.

Comments

[Analyst's a...:]

As usual analyst's continue to be worthless and should seek employment in a productive field. Maybe they could throw darts for the WSJ and more accurate than their own efforts to analyze stocks. Wall-Mart will make laughing stocks of these analyst's down grades.

Goldman Sachs continues to exist on a reputation long lost and should go out of business having no value to the business world.

Mar 15 01:34 PM