Stock Market News for September 18, 2009

After surging to almost one-year highs Wednesday, stocks took a step back as worries that the recent rally has gone too far, too fast resurfaced.  Investors pulled out profits even as latest round of upbeat economic data tried to convince them that a recovery is indeed underway.  Shares of companies that have led the recent advance failed to find favor amid a lackluster trading session.  Although the retreat was modest, it signaled a growing belief that the rally is overextended.

The Dow Jones industrial average declined 7.79 points, or 0.08%, to end the day at 9,783.92. The broad Standard & Poor's 500 Index retreated 3.27 points, or 0.31%, at 1,065.49 and the tech-heavy Nasdaq Composite Index eased 6.40 points, or 0.30%, to end at 2,126.75.  On the New York Stock Exchange, declining shares beat those that advanced by eight to seven on volume of 1.52 billion shares.  At Wednesday's close, the DJIA stood almost 50% above its 12-year low of last March; the S&P500 at 58%, with the NASDAQ up 68% from its 6-year low.

Shares of FedEx (NYSE:FDX - Analyst Report) and Oracle (NASDAQ:ORCL - Snapshot Report) declined after the companies’ lower-than-expected results. FedEx’s CEO noted plans to up shipping rates by almost 6% in January, a bullish signal of expected volume growth.  FedEx fell 2.2% to $76.46 and Oracle declined 2.8% to $21.52.  A decline in natural gas prices sent shares of Chesapeake Energy (NYSE:CHK - Analyst Report) and Nabors Industries (NYSE:NBR - Analyst Report) lower.  Chesapeake fell 3.3% to $27.97.  Eastman Kodak (NYSE:EK - Snapshot Report) fell more than 11% after the company announced plans to raise more than $700 million in senior secured notes.

Among the ten S&P 500 industry groups, telecom companies were the biggest decliners, retreating 1.6%, following UBS' (NYSE:UBS - Snapshot Report) analyst comments suggesting pressure in wireless business.  Verizon Communications (NYSE:VZ - Analyst Report) retreated almost 3% to $29.51.  Moreover, yesterday Verizon's (NYSE:VZ - Analyst Report) CEO suggested its wireless operations would consider dividend payments only after debt reductions.  Companies that receive a significant portion of their revenues from overseas operations showed strength, with Caterpillar (NYSE:CAT - Analyst Report) up 2.4% and Coca-Cola (NYSE:KO - Analyst Report) rising 1.4%.  Basic materials shares declined 0.8%, oil and gas was down 0.7%, and financials retreated 0.5%  

American Airlines parent AMR Corp. (NYSE:AMR - Snapshot Report) was a major gainer Thursday as its shares surged 19.7% to $8.80 after the company said it secured $2.9 billion in new financing.  AMR also said it is working on its flying schedule and would shift flying to more profitable routes.

Today’s calendar contains little of market-moving interest, with the day's quadruple witching expected to results in volatility.  Lacking a firm catalyst for the next upward move, the demand for increased risk eased, with the greenback backing off its one-year high against the euro, oil prices down $0.68 to $71.79, and gold up $2.20 to $1015.70.