Here’s Why Insurance Stocks Are Trading Lower Today
Stocks are
lower this midday. The major indices are
starting off the week slightly in the red after a worse-than-expected industrial
production report and Goldman Sachs’s cautious IT survey. Industrial production
increased for the third time in the past four months as output in August rose by
0.1% compared to expectations of a 0.3% gain. Goldman Sachs latest IT spending
survey revealed that spending will likely show little or no growth for the year.
Next year, IT spending is projected to grow by 3.9%. Goldman also said that the
timing of a recovery in IT spending in being “pushed out”.
Insurance issues are among the
top decliners today as meteorologists are predicting that Hurricane Isabel will
hit the East Coast by Thursday. Hurricane Isabel will be the region’s biggest
since Hugo in 1989. Home improvement retailers Lowes
(
LOW |
Quote |
Chart |
News |
PowerRating) and Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating)
are higher by 2.6% and 3% respectively. Bonds are off slightly recovering from
this morning’s economic reports. Tomorrow we will have the Fed’s decision on
interest rates. The Fed is expected to leave rates unchanged at 1%.
The Dow Jones Industrial
Average
(
$INDU.X |
Quote |
Chart |
News |
PowerRating) is -0.22% at 9449.02. The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
is -0.36 at 1014.83. The Nasdaq
(
$COMPQ |
Quote |
Chart |
News |
PowerRating) is -0.19% at 1851.62.
The day’s leading sectors are
Retail
(
$RLX.X |
Quote |
Chart |
News |
PowerRating), +1.47%, Home Builders
(
$HGX.X |
Quote |
Chart |
News |
PowerRating),
+0.84%, Airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating), +0.83%, Gold & Silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating),
+0.60% and Internet Commerce
(
$ECM.X |
Quote |
Chart |
News |
PowerRating), +0.17%.
Weak today are Insurance
(
$IUX.X |
Quote |
Chart |
News |
PowerRating), -1.38%, Networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating), -1.24%,
Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), -1.16%, Hardware
(
$GHA.X |
Quote |
Chart |
News |
PowerRating),
-0.92%, and Health Providers
(
$RXH.X |
Quote |
Chart |
News |
PowerRating), -0.82%.
In economic news, the
Business Inventories in July fell by an expected 0.1%. Capacity
Utilization in August also came in at an expected 74.6%. Industrial
Production in August rose by 0.1%, economists were expecting a rise of 0.3%.
Lastly the New York Empire State Index in September came in at 18.35 or
comfortably above expectations of 15.
The 10-year U.S. Note
is -005 at 111 300.
The dollar is -0.09 at
96.37.
Gold is -0.60 at 376.30.
Crude Oil -0.70 at
28.20.
Volume is 535,000,000 on
the NYSE, and 801,000,000 on the Nasdaq.
Market breadth is mixed,
with NYSE declining issues over advancing issues by 1.02, and down over up
volume by 1.69. Nasdaq advancing issues over declining issues at 1.07, and down
volume over up volume at 1.03.
Top Dow stocks are:
Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating), +3.16% at 32.59, Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating),
+1.44% at 69, IBM
(
IBM |
Quote |
Chart |
News |
PowerRating), +0.73% at 89.35, Altria Group
(
MO |
Quote |
Chart |
News |
PowerRating),
+0.56% at 40.78, and Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating), +0.54% at 27.88.
Stocks in the news:
Semiconductor equipment maker
Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) is fractionally higher after Merrill Lynch
upgraded the stock from “neutral” to “buy”. Merrill based the upgrade on the
company’s broad product line as well as improving industry fundamentals.
Shares of drug maker Boston
Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating) are not yet opened. At 2:00 pm ET, the company is
stated to report the results of its clinical trials of its drug-coated stent,
Taxus. Stents are medical devices used by cardiologist to prop open clogged
arteries. Boston also raised third-quarter sales and earnings guidance. The
company now sees revenues between $855 to $865 million and earnings including
items between 28 cents to 30 cents. Previously, the company had forecasted sales
between $810 to $840 million and earning between 24 to 28 cents.
Cubist Pharmaceuticals
(
CBST |
Quote |
Chart |
News |
PowerRating)
are fractionally higher after the company won FDA approval for its Cubicin
anti-infection treatment. Both First Albany and WR Hambrecht reiterated their
“Buy” ratings.
Flash memory manufacturer
Sandisk
(
SNDK |
Quote |
Chart |
News |
PowerRating) is lower by more than 3% despite raising its full-year
sales estimates. Due to strong demand for its flash memory storage products, the
full year sales of $950 million plus or minus a few percentage points. Current
consensus estimates are calling for $943.32 million.
Big Blue IBM
(
IBM |
Quote |
Chart |
News |
PowerRating)
is higher by 1% after UBS upgraded the computer hardware giant from “neutral” to
“buy”. UBS based the upgrade on improving business conditions and said that the
company’s semiconductor unit it “poised to improve”. UBS also believes that
IBM’s services unit will soon sign another “mega-deal” and that its server unit
will increase its market share.
Research in Motion
(
RIMM |
Quote |
Chart |
News |
PowerRating)
is lower by 4.7% after a Barron’s article raised concerns about the
company’s outlook. Barron’s highlighted the company’s legal battles with
Good Technology and NTP. RIMM’s valuation was also a concern.
If you have any comments or
questions, please feel free to email me.
vincentm@tradingmarkets.com