Lower Gas Prices Soon?
Stocks
were lower in light trading as many investors waited for tomorrow’s jobs data.
Weekly initial claims fell by 6,000 to 339,000, with the 4-week
average rising to 341,000. The unemployment rate will be announced tomorrow at
8:30 AM EDT, with economists expecting a 5.6% number.
Oil prices opened strong but fell below $40 mid-day. OPEC said they would raise
output by two million barrels a day — at the low end of expectations —
effective July 1st and another 500,000 barrels a day starting August 1st. Some
industry observers feel there is $7-$8 of premium built into oil prices
currently. The current OPEC quota is 23.5 million barrels per day, with the new quota
set for 25.5 mb/d. Current production is 25.7 mb/d, which is higher than the new
quota. This means there are no additional barrels on the market. Many members
are already pumping above the quota — cheating, in essence. OPEC is expected to
meet again on July 21.
The Energy Information
Administration said it expects prices at the pump to fall below $2.00/gallon
soon. This news comes as a relief to the nation’s 200 million drivers, many of
whom will take to the roads this summer on vacation. But, they say, prices
probably won’t go back to where they were at the beginning of the year.
Retailer giant Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating) said its same store sales rose 5.9% in May, with strong sales in
electronics and food departments. Analysts had expected an increase of 4 to
5.5%. Sales for May rose 12.8% to $21.43 billion.
Monster.com said most
industries reported moderate job growth availability in May. The Monster
Employment Index for May was 128. April, 125; March, 109; February, 107;
January, 102.
Symbol Technologies
(
SBL |
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News |
PowerRating)
was halted and re-opened at 1:00 PM. The company will pay over $138 million to
settle accounting fraud charges. Seven former top executives will be arraigned
separately. SBL closed at 15.43, up 0.72.
CIA Director George Tenet
resigned, citing personal reasons. The CIA has weathered recent criticism for
intelligence lapses. Tenet’s last day will be July 11. Deputy director John
McLaughlin will take over as acting director.
In its mid-quarter business
update after the close, Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) raised Q2 revenue estimates,
and said gross margins are expected to be between 60% – 61%. The company said it
see sales between $8 and $8.2 billion, also above consensus. INTC closed at
27.41, but traded up 0.50 at press time. Mandalay Bay
(
MBG |
Quote |
Chart |
News |
PowerRating) beat by
0.18 and beat on revenues.
Carl Icahn has reduced
his stake in Imclone
(
IMCL |
Quote |
Chart |
News |
PowerRating), from 6.8% to 5.6% and has purchased
puts.
Tomorrow, look for job gains of
225,000-240,000 at the 8:30 AM ET report; that’s the range economists and
traders surveyed are looking for. "Will we get a third month of triple digit
growth in jobs" is the question traders are asking. No market reaction is
expected if the number is lower than expected.
Next week, Greenspan
will testify before the Senate Banking Committee who will consider his
nomination for a fifth term.
| Dow | -67.06 | 10195.91 |
| S&P 500 | -8.36 | 1116.63 |
| Nasdaq | -28.72 | 1960.26 |
Weak today were Airlines
(
XAL.X |
Quote |
Chart |
News |
PowerRating) -3.86%, Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating) -2.49%, Hardware
(
HWI.X |
Quote |
Chart |
News |
PowerRating)
-2.41%.
No sectors were in the green.
Economic news releases today:
Productivity for Q1 that rose to 3.8%, Initial claims fell by 6,000 to 339,000.
Factory Orders for April fell by 1.7% and ISM services index that also was lower
at 65.2.
10-year Notes were +050
at 108 010
The dollar
was +0.07 at 88.88
Gold was -2.50 at 387.70
Crude Oil was -0.76 at
39.20
Volume was 1.23 billion
on the NYSE, and 1.5 billion on the Nasdaq.
Market breadth was negative.
| NYSE | Issues | |
| Advancing | 892 | Up Vol 237 |
| Declining | 2397 | Down Vol 978 |
| Ratio | 2.68 | 4.12 |
| Nasdaq |
||
| Advancing | 877 | Up Vol 338 |
| Declining | 2224 | Down Vol 1133 |
| Ratio | 2.53 | 3.35 |
Stocks in the news:
Hard disk maker Seagate Technology
(
STX |
Quote |
Chart |
News |
PowerRating)
got a lift after announcing plans to shed 2,900 workers and saying it will take
a fourth-quarter charge of $50 million. STX also was upgraded by Craig-Hallum to
Buy.
FuelCell
(
FCEL |
Quote |
Chart |
News |
PowerRating) fell after
missing earnings expectation by 5 cents, with a net loss of $18.9 million.
Revenue fell to $7 million from $8.9 million a year ago.
Comverse Technology
(
CMVT |
Quote |
Chart |
News |
PowerRating) reported
earnings that rose 23% to $47 million on sales of $221.4 million.
Johnson & Johnson
(
JNJ |
Quote |
Chart |
News |
PowerRating)
won FDA approval recommendation on its Charite Artificial Disc for degenerative
disc disease. It was the first artificial disc that was reviewed by the FDA.
Brice Wightman
bricew@tradingmarkets.com