Fed Raises Rates, But Here’s What Traders Wanted…
Stocks lost ground Thursday after
the Fed raised rates by 25 basis points, as
expected. It was the ninth straight rate increase in the past year. The Fed left
its policy statement largely unchanged, saying rates will be raised at a “measured pace.” Â
The Dow fell by triple digits as traders wanted an indication as to when the Fed
would stop raising rates.
At the end of the first half, the SPX is off 1.70%, the
Dow is off 4.86% and the Nasdaq is off 5.57%.
Initial jobless claims for the week of 6/25 fell 6000 to 310,000. Personal
income for May rose +0.2%;Â personal spending was unchanged, less than
expected.
The Chicago PMI was 53.6 for June vs 54.1 in May.
Bank of America
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BAC |
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PowerRating) will buy credit card giant MBNA
(
KRB |
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in a $35 billion ($27.50/share) cash and stock deal.
3Com
(
COMS |
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PowerRating) missed by 0.03 and issued in-line guidance. Sales
fell 9%.
Research in Motion
(
RIMM |
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PowerRating) beat by a penny and guided in-line. The
stock is trading lower pre-open.
Among newsletter writers, 55.1% are bullish, the highest level since
March. Bears are 19.1%, the lowest figure since December.
Trader talk: last summer was tough trading. What’s in store for this
summer?
AAA said it expects more drivers to hit the road this July 4 weekend
than did during Thanksgiving. This, despite higher gasoline prices.
Thomson Financial predicts the growth rate for the
S&P 500 for Q2 will be 7.1%. Most companies report mid-July.
Here is the YTD performance of selected foreign markets:
France:Â Â Â Â Â +11.2%
Germany   +8.2%
U.K.          +6.5%
Hang Seng -0.2%
Strong sectors were:Â Â Internet
(
$GIN.X |
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+0.49%Â Â Â Natural Gas Â
(
$XNG.X.X |
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+0.37%Â Â Â Â Â Â Â
    Â
Weak sectors were: Â Airlines Â
(
$XAL.X.X |
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PowerRating)
-3.29%Â Â Â Â Chemicals
(
$CEX.X |
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PowerRating) -1.61%Â Â Â
 Gold
(
XAUI.X |
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PowerRating) -1.62%Â Â Â Â Â
| Dow | -99.35 | 10,275.13 |
| Nasdaq | -11.93 | 2056.96 |
| S&P 500 | -8.56 | 1191.29 |
The dollar was -0.06 at
89.11
Crude Oil was -0.76 at
56.50
Gold was -2.30 at 434.90
1.69 billion on the Nasdaq.
Market breadth was negative.
| NYSE | Issues | |
| Advancing | 1641 | Up Vol 615 |
| Declining | 1611 | Down Vol 1095 |
| 1.01 | 1.78 | |
| Nasdaq |
||
| Advancing | 1394 | Up Vol 475 |
| Declining | 1649 | Down Vol 1004 |
| 1.18 | 2.11 |
Stocks in the News
Home Depot
(
HD |
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PowerRating) was upgraded to overweight at Lehman; target $47.
Lowe’s
(
LOW |
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PowerRating) was also upgraded.
BMC Software
(
BMCS |
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PowerRating) missed by a penny and guided higher.
Mark Cuban reported a 9.1% stake in Register.com
(
RCOM |
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PowerRating).
Cirrus Logic
(
CRUS |
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PowerRating) will join the new Russell Microcap Index.
Palmsource
(
PRSC |
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PowerRating) missed by 0.02 and guided lower.
Boeing
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BA |
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PowerRating) named 3M chief James McNerney as its new CEO.
Diebold
(
DBD |
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PowerRating) guided lower.
PalmOne
(
PLMO |
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PowerRating) reported 0.37 vs a 0.31 estimate; the company
guided higher.
Biomet
(
BMET |
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PowerRating) hit lowered expectations.
Brice Wightman