Morning Rally, Afternoon Selloff

  • January 3, 2007
  • Darren Wong

After a morning rally to new all-time intraday highs, the markets sold off on
inflation concerns by Federal Reserve members. 

Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating) and Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating) led the Dow with gains of 3% and
2.5% respectively.  Walmart reported higher than expected December
same-store sales.  Home Depot announced that chief executive Robert
Nardelli has resigned and will be replaced by Vice Chairman Frank Blake. 

General Motors
(
GM |
Quote |
Chart |
News |
PowerRating) and Exxon Mobil
(
XOM |
Quote |
Chart |
News |
PowerRating) led the blue chip decliners
losing 4.1% and 3.3%.  General Motors shares fell on a Banc of America
downgrade from Neutral to Sell.

Crude for February delivery moved
precipitously lower losing 4.5% to close at $58.32 a barrel, which is the lowest
level 20 months.  Mild winter conditions through most of the country have
held back crude prices.

It has been another volatile session for February gold futures as it closed
lower by 1.3% to $629.80 per ounce, despite running as high as $647.40 in
morning trading.  The rise of the dollar hurt gold prices in today’s
trading.

Tomorrow’s economic reports to watch for include:
Initial Claims (8:30 AM EST), Factory Orders (10:00 AM EST), and ISM Services
(10:00 AM EST).

Stocks on the Move

Merck
(
MRK |
Quote |
Chart |
News |
PowerRating) Receives Upgrade From Bear Sterns from Peer Perform to
Outperform.  MRK shares rose by 1%.

Baidu.com
(
BIDU |
Quote |
Chart |
News |
PowerRating) Raised from Sector Underperform to Sector
Perform by CIBC World Markets. BIDU shares closed up by nearly 9%.

Nabors
(
NBR |
Quote |
Chart |
News |
PowerRating) Sees Q4 EPS Below Street View On Weaker-than-expected
Lower 48 And Canadian Operations (full
story).  NBR shares drop nearly 6%.

Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating) Reveals Positive Results From Implantable
Cardioverter Defibrillator Study (full
story).  BSX shares fall by 1.5%.

Lennar
(
LEN |
Quote |
Chart |
News |
PowerRating) Sees Loss For Q4 On Impairment Charges; MW Housing
Partners To Buy 62% Stake In LandSource JV (full
story).  LEN shares fall by 3.5%.

Nucor
(
NUE |
Quote |
Chart |
News |
PowerRating) To Acquire Harris Steel In US$1.07 Bln Cash Deal (full
story).  NUE shares rise by 0.3%.

For more stories as they happen, go to our
Breaking News section.

Market Snapshot

Dow


+11.37
12,474.52

NASDAQ
+7.87
2,423.16

S&P 500


-1.53
1,416.77

NYSE


NASDAQ

Volume
3,333,961,000
2,415,864,000

Advances
1669
1537

Declines
1687
1586

Up Volume
1463
1252

Down Volume
1623
1037

New Highs
321
149


New Lows
36
46


Strongest/Weakest Sectors



Strongest Sectors

Weakest Sectors

Amex Airline Index (XAL)
Amex Gold Bugs Index (HUI)

Nasdaq Transportation Index (TRANX)
Deutsche Bank Energy Index (DXE)

Amex Securities Broker/Dealer Index (XBD)
CBOE Oil Index (OIX)


Economic News

ISM Index 51.4 vs 50.0 consensus

Construction Spending -0.2% vs -0.6% consensus

Darren Wong
darrenw@tradingmarkets.com



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