All Eyes On Fed…Here’s What To Expect
Stocks are
lower on light volume with the market waiting the Fed,
which is
expected to announce an interest rate
hike of at least 25 basis points at 2:15 PM ET. Most analysts are expecting a
0.25% rate hike with Dick Bernet, the chief economist at Morgan Stanley,
expecting rates to reach 2% by the end of 2004 and 3% by mid-2005.
Traders will watch to see if the Fed suggests the balance of risk tilted toward
upside and will look for language citing inflation pressures. As of yesterday,
Fed fund futures were pricing in a 30-40% chance of a 50 bp rise in August.
The Chicago PMI dropped unexpectedly to an
eight-month low, down to 56.4 with slowing vehicle sales.
Research In Motion
(
RIMM |
Quote |
Chart |
News |
PowerRating)
jumped after reporting a profit of $55 million with sales that more than doubled
to $269.6 million. The company expects Q1 revenue to reach $250 million with EPS
of 21 cents. Piper Jaffray also raised 2005 pro-forma profit forecasts to $1.78
a share with revenue at $1.3 billion. CIBC raised their price target on the
stock to $80.
General Mills
(
GIS |
Quote |
Chart |
News |
PowerRating)
reported quarterly earnings that rose by 24% to $278 million on net sales of
$2.79 billion with strengths in cereal and yogurt products. For 2005, it expects
to earn $2.72 a share and raised quarterly dividend to 31 cents a share.
| Dow | -24.56 | 10387.94 |
| S&P 500 | -1.34 | 1134.86 |
| Nasdaq | -0.70 | 2034.16 |
Strong today are Amex Gold
Bugs
(
HUI.X |
Quote |
Chart |
News |
PowerRating) +1.38%, Gold and Silver
(
XAU.X |
Quote |
Chart |
News |
PowerRating) +1.33%,
Oil Services
(
OSX.X |
Quote |
Chart |
News |
PowerRating) +1.30%, Energy
(
DXE.X |
Quote |
Chart |
News |
PowerRating) +0.70%.
Weak today are Disk Drives
(
DDX.X |
Quote |
Chart |
News |
PowerRating) -1.95%, Retail
(
RLX.X |
Quote |
Chart |
News |
PowerRating), -0.73%.
Economic news release today:
Chicago PMI that was much lower at 56.4 for the month of June.
10-year Notes are +185
at 109 060
The dollar
is -0.42 at 89.28
Gold is +2.70 at 395.50
Crude Oil is +0.79 at
36.47
Volume is 555 million on
the NYSE, and 655 million on the Nasdaq.
Market breadth is negative.
| NYSE | Issues | |
| Advancing | 1670 | Up Vol 230 |
| Declining | 1390 | Down Vol 241 |
| Ratio | 1.20 | 1.05 |
| Nasdaq |
||
| Advancing | 1421 | Up Vol 284 |
| Declining | 1482 | Down Vol 333 |
| Ratio | 1.04 | 1.17 |
Top Dow stocks are:
SBC Communications
(
SBC |
Quote |
Chart |
News |
PowerRating)
+0.63%, WalMart
(
WMT |
Quote |
Chart |
News |
PowerRating), +0.54% Â Verizon
(
VZ |
Quote |
Chart |
News |
PowerRating), +0.54%, JP
Morgan Chase
(
JPM |
Quote |
Chart |
News |
PowerRating) +0.50%
Stocks in the news:
Kmart
(
KMRT |
Quote |
Chart |
News |
PowerRating) agreed
to sell up to 54 stores to Sears for $621 million. The deal will leave
Kmart with 1,420 stores and $20 billion in annual revenue.
Taser International
(
TASR |
Quote |
Chart |
News |
PowerRating) rose
8% after winning a $1.8 million contract from the US military. It is the largest
contract in the company’s history.
Lexar Media
(
LEXR |
Quote |
Chart |
News |
PowerRating) fell after
warning it may report a loss of $18 million on revenue of $155 million on
aggressive price cutting in the industry. The company will report Q2 numbers on
July 15th.
Autozone
(
AZO |
Quote |
Chart |
News |
PowerRating) dropped after
announcing same-store sales down 1% with overall retail sales for the quarter
down 3%.
Brice Wightman
bricew@tradingmarkets.com