Equities Update: Narrowly Mixed Finish Extends Dow's Win Streak to Seven Sessions

by: Midnight Trader

4:26 PM, Jul 14, 2010 --

  • NYSE down 4.42 (-0.1%) to 6,903.36
  • DJIA up 3.70 (+0.04%) to 10,367
  • S&P 500 down 0.17 (-0.02%) to 1,095
  • Nasdaq up 7.81 (+0.4%) to 2,250


  • Hang Seng up 0.64%
  • Nikkei up 2.71%
  • FTSE down 0.50%


(+) INTC continues evening gain seen in wake of strong earnings.

(+) LLL oks share buyback.

(+) MIPI says positive Zemiva results to be published.

(+) MOT upgraded.

(+) TGX says Theraseed Palladium-103 to be distributed by ONCURA.

(+) NTWK says N. American sales strong.

(+) JTX beats with earnings.

(+) ASML Q2 results up sharply from year-ago results, guides for 2010 sales growth.

(+) CTIC inks manufacturing pact with NerPharMa.


(-) YUM continues evening decline that followed disappointing outlook.

(-) LNC downgraded.

(-) LHCG gets SEC request to preserve documents related to Medicare reimbursement, affirms guidance.

(-) AIB report says bank may struggle to pass European stress test.

(-) GTIV says SEC initiates inquiry into participation in Medicare home health payment system.

(-) SNDK inks JV with Toshiba.


Stock averages close narrowly mixed, off the day's early highs but having improved slightly from the levels hit in the immediate wake of a Federal Reserve meeting minutes release that included a downgrade to the group's economic outlook. The tech-heavy Nasdaq gained in the wake of positive tech sector earnings, including from Intel (NASDAQ:INTC). The Dow Jones Industrial Average's narrowly higher finish was enough to extend the blue-chip average's win streak to seven days.

In minutes from their June policy meeting, released this afternoon, Fed officials cited turbulance from abroad, namely the European debt crisis, in downgrading their view of the economy. GDP will likely grow between 3% and 3.5% this year, the Fed said, a downward revision from a growth range in their April forecast of 3.2% to 3.7%.

The Fed's latest forecast sees the unemployment rate, now at 9.5%, possibly staying near that level or in the best case falling to 9.2%. In the April forecast, the Fed had a slightly lower bottom number of 9.1%.

The Fed predicted that a key inflation gauge that's tied to consumer spending would show prices rising 1% to 1.1% this year. That's down from an April forecast that consumer prices would increase by 1.2% to 1.5%.

Wall Street noted that even with the downgraded view, the Fed may be able to leave borrowing conditions accomodative but was not willing in June to take additional steps to boost financial markets.

Stocks did twist in two directions in morning action following data showing home loan applications had fallen to a 13-year low and retail sales had slipped in June. Upbeat earnings reports did ease the sting of economic reports.

A new Commerce Department report this morning showed June retail sales fell 0.5% and missed the Street's consensus view for a 0.2% decline, according to economists polled by Thomson Reuters. Excluding the 2.3% drop in motor vehicle sales, retail sales fell 0.1% to $299.2 billion, mostly in line with economists' expectations. Sales fell a revised 1.1% in May.

The Mortgage Bankers Association also said this morning that home loan apps dropped by 3.1% for the week ended July 9, the lowest level since December 1996, even after adjustments for the July 4th holiday. Refinancing applications fell 2.9% and accounted for 78.7% of all applications last week, the MBA said. The MBA's market index that reflects total loan demand also fell 2.9%.

Much of the decline in sales has been attributed to the April 30 expiration of homebuyer tax credits. Demand for loans to buy homes has fallen in nine out of the 10 weeks since the credit expired, according to the AP.

Stocks were higher out of the gate Wednesday, with Wall Street cheered by Intel's convincing beat and positive guidance the previous evening. That news added to the already positive reaction to Alcoa's (NYSE:AA) beat to start the latest round of earnings reports.

Intel reported Q2 revs of $10.8 bln, better than the analyst mean of $10.25 bln on Thomson Reuters. EPS was $0.51 per share, vs. expectations of $0.43 per share.

For Q3, the company expects revenue of $11.6 bln, plus or minus $400 mln. The Street is forecasting revenue of $10.9 bln.

Cisco (NASDAQ:CSCO) was up nearly 3% on an analyst upgrade, buffering gains for the Nasdaq.

Meanwhile, Microsoft Corp. (NASDAQ:MSFT) is reportedly paying developers to help it make mobile applications for the Windows Phone 7 system in an effort to help it catch products from rivals Apple inc. (NASDAQ:AAPL) and Google (NASDAQ:GOOG), Bloomberg reported.

BP Plc (NYSE:BP) is delaying its test of a new cap to seal the leaking Gulf of Mexico oil well after the Obama administration ordered more study of the plan, according to a Bloomberg report. Yesterday, BP had successfully replaced the cap on broken wellhead with a better custom-designed cap that, if fully functional, will stop the flow of oil from the well.

Benihana (NASDAQ:BNHN) jumped as speculation grows that it may be up for sale. The Japanese steakhouse group said that its board is considering a number of options, including a possible sale.

Yum! Brands (NYSE:YUM) declined after its full-year forecast failed to meet expectations even though second quarter results beat estimates. For the full year, the company sees earnings of $2.43 a share, which is above its previous estimate of $2.39, but lower than analysts' projection of $2.48.

American International Group (NYSE:AIG) said it is looking to repay a portion of its U.S. bailout by relinquishing stakes in the mortgage-connected bonds that initially pushed the firm to the edge of collapse, Bloomberg reported, citing three people familiar with the plan.