Closing Update for Monday, August 24: Markets Essentially Flat

4:09 PM, Aug 24, 2009 --

• NYSE down 5 (0.1%) to 6,671.06.
• DJIA up 2.7 (0.03%) to 9,509.
• S&P 500 down 0.6 (0.1%) to 1,026.
• Nasdaq down 2.9 (0.1%) to 2,018.

GLOBAL SENTIMENT

• Hang Seng up 1.67%
• Nikkei up 3.35%
• FTSE up 1.04%

DOWNSIDE MOVERS

(-) HBC put on Merrill's Least-Preferred European bank stock list.

(-) ACAS gets S&P debt downgrades.

(-) TOL downgraded at Citi.

(-) GFG regulators shut down Guaranty Bank.

(-) SHLD down after Barron's cover story.

UPSIDE MOVERS

(+) AXP, COF, DFS get upgrades.

(+) CHIC going private for $17.50 per share, 27% premium.

(+) AMD gets analyst upgrade.

(+) DELL gets analyst upgrade.

(+) PG selling pharma business for $3.1 Bln.

(+) CYTR says Arimoclomol shows significant results in animal study.

(+) CPST gets new order.

(+) CVS gets favorable Barron's coverage.

(+) NOK gets downgrade but also rolling out first netbook.

MARKET DIRECTION

Stock averages end narrowly mixed after turning lower as Monday afternoon trading progressed, then chopping in two directions in the final minutes of the session. The DJIA extends its winning streak to five sessions with its narrow advance but both the Nasdaq and S&P 500 end just lower; all averages end in the lower end of the day's range.

Stocks hit fresh 2009 intraday highs during mid-morning trading and remained firm into the early afternoon amid a handful of key analyst upgrades and mergers and acquisitions news.

American Express (AXP), Capital One (COF) and Discover Financial (DFS) gave an early boost to the financial space after Barclays raised its rating on each issue to "overweight" from "equal weight."

But the financial sector also led on the way down Monday afternoon, as investors opted to pocket some profits in the sector and in the broader market, which had linked together four days of advances. Financials fell as banking equities analyst Richard Bove predicted in a weekend note that 150 to 200 more U.S. banks could fail in the current banking crisis on top of the 81 banks that have already failed this year, putting greater stress on the Federal Deposit Insurance Corp.'s deposit insurance fund, the AP said.

Stocks added to gains Friday and early Monday following mostly soothing remarks from Fed chief Ben Bernanke and signals over the weekend from other officials that global interest rates will remain low. But investors may be unwilling to stretch the rally ahead of two consumer sentiment reports due this week.

Tech bellwethers Advanced Micro Devices (AMD) and Dell (DELL) were each higher on upgrades, but failed to sustain broader tech-sector gains.

Mergers and acquisitions news did help support early gains.

Charlotte Russe (CHIC) says it has agreed to be bought by private Advent International for $17.50 per share in cash, or for a total value of approximately $380 million.

The Procter & Gamble Company (PG) and Warner Chilcott (WCRX) announce an agreement for the sale of P&G's global pharmaceuticals business to Warner Chilcott for an up-front cash payment of $3.1 billion.

Neurogen (NRGN) jumped on news it will be bought by Ligand (LGND).

October crude closed up $0.48, or 0.6%, to $74.37 a barrel on the New York Mercantile Exchange. The contract hit an intraday high of $74.81, the highest level for a front-month contract since late October.

September natural-gas futures rose 11.9 cents, or 4.2%, to $2.923 per million BTU. Natural gas closed at a fresh seven-year low Friday, pressured by strong supplies.

Comments

[Bill L.:]

seekingalpha.com/artic...

I think the biggest event today, was the dollar was up when the market opened strongly, the VIX also was up when stocks were up this morning. I think their may be a stealth rally starting in the dollar than will threaten the rally of most assets class.

Aug 24 04:27 PM

[apppro:]

at 1:00pm a major short sell program ran thru the entire market. i can show u chart after chart in many different sectors that showed an immediate and drastic sell off.
don't kid yourself into believing that black box program trading has gone away. SkyNet lives and if we don't fix this options-flash-short traders/traitors this will all very badly just like it did in March.

AND IT WILL HAVE NOTHING TO DO WITH REALITY OR FUNDAMENTALS BUT RATHER JUST A BROKEN MARKET OF GAMBLERS AND NOT INVESTORS.

Aug 24 05:47 PM

[puravidavid...:]

made new highs and couldn't hold them. Not bullishly confident though put/call sentiment is now 89% optimistic. Go figure? Smell fear, anyone?

Aug 24 11:59 PM

[Belome:]

You know when your dog stops dead in his tracks lurches back and forth with deep gasps for air just before he hurls? We are appear to be in the gasping for air phase.... another throwing up analogy.. I cant shake it.

Aug 25 03:18 AM