Thursday's Closing Update

Includes: DIA, QQQ, SPY
by: Midnight Trader

4:12 PM, May 7, 2009 --

-NYSE down 90.5 (1.5%) to 5,800.02.

-DJIA down 102.4 (1.2%) to 8,409.85.

-S&P 500 down 12.1 (1.3%) to 907.39.

-Nasdaq down 42.9 (2.4%) to 1,716.24.


Hang Seng up 2.78%

Nikkei up 4.55%

FTSE up 0.5%


(-) M says April same-store sales down 9.1%, narrows Q1 loss view.

(-) TBSI swings to a loss.

(-) DSX issuing shares.

(-) LCC drags on airlines after planned stock sale

(-) CSCO down as semiconductor sector weakness weighs despite earnings beat.

(-) DTV issues Q1 miss.

(-) SYMC lower on downgrade, forecast.

(-) JCP says April same-store sales down 6.6%

(-) JWN says same-store sales down 10.8%.

(-) SIRI raises guidance.

(-) GM results better than expected, but bankruptcy concerns linger


(+) BAC continues rally amid relief over stress test results, gets upgrade.

(+) KSS raises Q1 view after April sales.

(+) WMT reports better-than-expected 5% April sales rise.

(+) GPS tops analysts on same-store sales.


U.S. stock averages end down 1% to 2% after an auction of 30-year Treasury bonds drew a tepid response, raising worries that fading demand for government debt could hike the cost of borrowing and set back an economy that had been showing signs of life.

Tech shares led the broader market lower. Chip stocks tugged the technology sector lower after a solid week. Cisco (NASDAQ:CSCO) couldn't sustain evening gains that followed its earnings beat. Software-maker Symantec (NASDAQ:SYMC) plunged sharply after swinging to a loss.

Stocks opened mixed out of the gate, but investors started pulling back mid-morning sending all three major indexes into the red. The tech-heavy Nasdaq index led on the way down as investors took profits after the week-long rally.

Pre-market optimism evaporated after Federal Reserve Chairman Benjamin Bernanke said the Federal Reserve will be a more forceful bank regulator in the future as a result of the current banking crisis. The crisis generated "extensive introspection" at the central bank, Bernanke said. The conclusion was that there is a need for "heightened vigilance and forcefulness" on the part of supervisors, he said.

The results of government stress tests on 19 largest banks will be released at 5 p.m. ET, but many of the conclusions have already trickled out and show that about half of the banks need more capital. Investor relief over the results helped lift stocks earlier and powered a gain in the S&P 500 earlier this week that pushed the broad index into positive territory for the year.

Several retailers reported better-than-expected monthly sales figures for April, suggesting that consumers are becoming more confident about spending. Wal-Mart (NYSE:WMT), which topped analysts' forecasts with its April sales figures, pared early gains but will end with a slender advance.

Tech bellwether Cisco's (CSCO) quarterly results topped the Street in a post-bell report yesterday, but semiconductors are weighing on tech stocks, and Cisco closed down 4%.

On the economic front, first-time claims for state unemployment benefits fell to the lowest level since late January, helping stock futures to extend early gains. The number of initial claims in the week ending May 2 fell 34,000 to 601,000. The less-volatile four-week average of these initial claims fell 14,750 to 623,500. But, the level of ongoing claims continues to reach record highs, with a gain of 56,000 to reach 6.35 million in the week ending April 25.

Other evidence shows the recession is far from over. DuPont (NYSE:DD) said this morning it will cut 2,000 jobs as the chemical company wrestles with falling sales. The company had already announced it was cutting 2,500 jobs, and said late last year it would pare 8,000 contractors from its rolls.

The European Central Bank cut interest rates a quarter point and said it would buy euro-denominated bonds as well as offer longer-term credit to banks as it moves to get more money flowing through the 16-nation euro zone economy. The Bank of England left rates untouched at 0.5 percent but said it would step up its efforts to increase the supply of money by $75.4 billion.

Crude oil was up as much as 4% earlier in the day but pared that gain to end just barely higher. Crude for June delivery ended up 37 cents, or 0.7%, at $56.71 a barrel on the New York Mercantile Exchange. Crude has risen more than 6% this week.