$40 Oil: What It Means To You
Stocks were mixed Wednesday in choppy trading.
A big increase in the non-manufacturing index to 68.4–the highest since
November 2000–failed to spark mass buying. Traders are hesitant to make
commitments ahead of Friday’s employment report. Oil
prices climbed higher — to almost $40/bbl. — trading near 13-year highs on security
concerns in Saudi Arabia and Iraq. $40 oil is a psychological barrier and has
the potential to weigh down stocks. Oil spiked following an attack over the
weekend on a Saudia Arabian refinery/port. Additionally, demand is growing
faster than refiners can produce. The combination of these two factors may mean
higher gasoline prices for some time.
Bank of America cut its rating on the
offshore drilling sector to underweight, the Oil Service HOLDR
(
OIH |
Quote |
Chart |
News |
PowerRating) is down
3.35%. According to the AAA, average US retail gasoline prices jumped to a
record $1.844 a gallon.
Gary Kaltbaum has more on this topic today.
A federal judge denied Martha
Stewart’s motion for a new trial and she is expected to be sentenced in June.
With sales, profits and stock price rising,
Procter and Gamble
(
PG |
Quote |
Chart |
News |
PowerRating) is rewarding its 90,000 employees with
two free days off.
Bank of America upgraded Dell Computer
(
DELL |
Quote |
Chart |
News |
PowerRating) to a “buy” from “neutral” and raised its price target from $35 to $40. DELL is trading up 1%.
Charter One Financial
(
CF |
Quote |
Chart |
News |
PowerRating)
announced that Britain’s Royal Bank of Scotland’s Citizens Financial Group
agreed to acquire it for $10.5 billion in cash. The deal will add $43 billion in
assets and 61 retail banking branches to the group’s existing 1,400 branches
across 13 states. Metro-Goldwyn-Mayer
(
MGM |
Quote |
Chart |
News |
PowerRating) delayed its annual meeting, citing a $5 billion takeover bid by
Sony
(
SNE |
Quote |
Chart |
News |
PowerRating).
After the close, Cepheid
(
CPHD |
Quote |
Chart |
News |
PowerRating) reported Q1 in-line and beat on revenues; Asyst
(
ASYT |
Quote |
Chart |
News |
PowerRating)
beat by 0.07 and guided Q1 higher; Andrx
(
ADRX |
Quote |
Chart |
News |
PowerRating) beat by 0.10;
Roxio
(
ROXI |
Quote |
Chart |
News |
PowerRating) beat by 0.22 and guided Q1 higher; THQ Inc.
(
THQI |
Quote |
Chart |
News |
PowerRating)
beat by 0.02; Nationwide
(
NFS |
Quote |
Chart |
News |
PowerRating) bat by 0.08, ex-items.
| Dow | -6.25 |
10310.95 |
| S&P 500 |
+2.03 | 1121.58 |
| Nasdaq | +6.78 | 1957.26 |
The day’s leading sectors were
Hardware
(
HWI.X |
Quote |
Chart |
News |
PowerRating) +2.03%; Healthcare
(
HMO.X |
Quote |
Chart |
News |
PowerRating) +1.59%;
Telecoms
(
XTC.X |
Quote |
Chart |
News |
PowerRating) +1.19%; and Healthcare Provider
(
RXH.X |
Quote |
Chart |
News |
PowerRating)
+1.08%
Weak today were Oil Services
(
OSX.X |
Quote |
Chart |
News |
PowerRating) -3.57%, and Energy
(
DXE.X |
Quote |
Chart |
News |
PowerRating) -0.89%
Economic news releases today
include a much stronger-than-expected non-manufacturing index of 68.4.
The dollar
was -0.46 at 89.35
Gold was -0.75 at 393.19
Crude Oil was +0.64 at
39.57
Volume was 1.47 billion
on the NYSE, and 1.58 billion on the Nasdaq.
Market breadth was positive.
| NYSE | Issues | |
| Advancing |
1638 | Up Vol 811 |
| Declining | 1647 | Down Vol 635 |
| Ratio | 1.18 | 1.64 |
| Nasdaq |
||
| Advancing |
1696 | Up Vol 852 |
| Declining |
1429 | Down Vol 681 |
| Ratio | 1.37 | 2.13 |
Stocks in the news:
Coca-Cola
(
KO |
Quote |
Chart |
News |
PowerRating)
brought back its former executive E. Neville Isdell to succeed Doug Daft as its
new CEO.
Cypress Semiconductor
(
CY |
Quote |
Chart |
News |
PowerRating) expects second-quarter earnings of 23 cents on a slightly
higher gross margin and stood by its revenue target of $262 million.
Taser International
(
TASR |
Quote |
Chart |
News |
PowerRating) rose after announcing two new orders from law enforcement agencies
in Texas and Ohio worth $500,000.
Ligand Pharmaceuticals
(
LGND |
Quote |
Chart |
News |
PowerRating) posted a net loss of $13.1 million, or 18 cents a share, missing
analysts’ consensus by 12 cents. Revenue rose to $36.6 million and the company
stood by its previous revenue target of $250 million, with EPS of at least 12
cents.
Brice Wightman
bricew@tradingmarkets.com