Stock Market News for June 22, 2009

US stocks registered their first decline in five weeks as investors assessed the outcome of Obama Administration’s plans for an overhaul of financial regulations.  A fall in crude prices resulted in a sell off in energy stocks, hurting investor sentiments.  The S&P 500, which jumped to a high of 946.21 the previous week, lost almost 25 points during the week to close at 921.23 on Friday.  However, Nasdaq ended the day with a 1.1% gain after Microsoft (NASDAQ:MSFT - Analyst Report) was viewed positively by some brokers.  On a weekly basis, Nasdaq lost 1.7% and the Dow Jones Industrial Average, which slipped 0.2% on Friday, closed the week 2.95% lower.  With the quadruple witching of options expirations on Friday, volume on the NYSE jumped to 2.1 billion shares.

Investors this week are likely to take leads from data on housing, durable orders, and final GDP numbers for the first quarter.  Also, a change in FOMC directives is expected to have an impact on stock prices.  The World Bank’s projection that the world economy will shrink by 2.9% is likely to drive sentiments this morning.  The bank had earlier forecast a 1.7% contraction. 

Among S&P sector groupings, all but one recorded declines during the week.  Basic materials stocks led the decliners with a 7.1% fall, followed by oil and gas, off 6.9%, and industrials, down 5.2%.  Only healthcare sector finished the week higher, with a 2% advance.  E*Trade Financial Corp (NASDAQ:ETFC - Analyst Report) declined 36% to $1.26 after the online brokerage sold $478.5 million to shore up its capital base.  Oil prices went below $70, hurt by expectations of seasonal declines in US gasoline prices.  Exxon (NYSE:XOM - Analyst Report) declined 3.7% to $71.05 and Freeport-McMoRan Copper & Gold Inc (NYSE:FCX - Analyst Report) plunged 13% amid speculation that Chinese demand for copper is falling.

According to Thomson Reuters, second quarter earnings are likely to decline about 35% y/y, with declines likely to continue before a sharp 190% jump in the final quarter. The S&P forward-looking price-earnings multiple currently stands at about 15 times earnings, up from about 12 times in the first quarter, with the rise largely attributed to price gains rather than rising earnings numbers.

The two-day FOMC meeting, which starts on Tuesday, is unlikely to reveal a major policy shift and is likely to hold rates of 0-0.25% steady.  The week's planned $104 billion note auctions will also place pressure on yields, raising fears on inflation as well as a crushed recovery.

Email	Print	Share	RSS	Rate Pos	Rate Neg	Comment

Loading Stories...

Related Content

RELATED ARTICLES MARKET NEWS ARCHIVE

Zacks Blog: Electronic Arts’ Net Falls
(ERTS, SNE, MSFT, NTDOY, ATVI, GME, BBY)	02/09/10
Zacks Blog: Stock Market News for February 9, 2010
(BAC, JPM, HD, MS, HPQ, XOM, DIS, JPM, PCLN, CME, AZO, C, CVS)	02/09/10
Zacks Blog: Zacks Earnings Trends Highlights: Apple, Applied Materials, Intel, Microsoft and Texas Instruments
(AAPL, AMAT, INTC, MSFT, TXN)	02/09/10
Zacks Blog: Zacks Analyst Blog Highlights: SAP AG, International Business Machines Corp, Microsoft Corporation, Oracle Corporation and CVS Caremark
(SAP, IBM, MSFT, ORCL, CVS)	02/09/10
Zacks Blog: Earnings Preview: Teradata
(TDC, ORCL, NZ, IBM, MSFT, SY, SAP)	02/08/10

 Posting Comment...

There was a problem posting this this comment. Please try back later.
[CLICK TO CLOSE X]

Comments (Limit 1000 Characters - Used: 0)

Please provide your comments here... Display Name: Email Address:  

 Loading Comments...

Be the first to comment on this article!