Q3 Earnings Synopsis
Stocks were higher for a third
straight day in what will be the best
week the bulls have had since March 2003.
The NYSE had three days back to back of 1.8
billion share volume. The S&P made 2 1/2 year highs and most stocks are up 2-3%
this week. The Nasdaq is up 15% from its August lows. Historic highs are being
made in many areas, including smallcaps, midcaps, retail and materials. Traders
are focused on an excellent jobs number, as well as revisions in the August and
September numbers, lower oil and a tax-friendly environment under President
Bush.
Oil bounced intraday, pushing the market off its
highs, as did a rumor of a nuclear accident in Russia.
Nonfarm payrolls for October rose +337,000,
double the estimate and the strongest gain in seven months. The biggest gains
were in construction (+71,000) and the service sector (+97,000). Unemployment
for October was 5.5% vs 5.4% in September Nonfarm payrolls for August were
revised to 198K v 128K. Average hourly earnings rose +0.3%. Monster.com
made a 1-year high.
Vornado took at 4.3% stake in Sears
(
S |
Quote |
Chart |
News |
PowerRating), which traded up 23%.
According to Michelle Yee of Brown Brothers
Harriman, average year/year earnings gain for S&P companies in Q3 was 16%.Â
This compares with 27.2% for Q2 and 28.1% for Q1. A year ago, Q3 earnings grew
at 17.6%.
The dollar hit a new low vs. the euro, as
currency traders worried that twin budget and trade deficits won’t be reduced
under Bush’s new term.
The British medical journal Lancet said that Merck’s
(
MRK |
Quote |
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News |
PowerRating)
Vioxx risks were known in early 2000. CEO Gilmartin is under pressure to step
down, The Wall Street Journal reports. Merck said it was “vigilant” in
monitoring the drug; the company has lost $30 billion in market value since
Vioxx was pulled.
| Dow | +64.60 | 10379.36 |
| S&P 500 | +3.61 | 1165.28 |
| Nasdaq | +13.93 | 2037.56 |
Strong sectors were: Gold
(
XAU.X |
Quote |
Chart |
News |
PowerRating)
+2.39%, Cyclicals
(
CYC.X |
Quote |
Chart |
News |
PowerRating) +1.88%, Biotech
(
BTK.X |
Quote |
Chart |
News |
PowerRating) +1.48%.
Weak sectors were:Â Internet
(
GIN.X |
Quote |
Chart |
News |
PowerRating) -0.56%, Utilities
(
UTY.X |
Quote |
Chart |
News |
PowerRating) -0.70%.
The dollar was -0.54 at
84.00
Gold was +3.20 at 433.10
Crude Oil was +0.73 at 49.55
1.83 billion on the Nasdaq.
Market breadth was positive.
| NYSE | Issues | |
| Advancing | 1691 | Up Vol 1018 |
| Declining | 1700 | Down Vol 520 |
| Ratio | 1.00 | 1.95 |
| Nasdaq |
||
| Advancing | 1797 | Up Vol 1246 |
| Declining | 1289 | Down Vol 479 |
| Ratio | 1.29 | 2.60 |
Stocks in the News
Vaxgen (VXGN)
announced an $877 million contract with the U.S government for 75 million doses
of its anthrax vaccine.Â
Cardinal Health (CAH)
missed by 0.04.
Beazer Homes (BZH)
beat, with profits up 40%.
Google (GOOG)
coverage was started at UBS with a $160 price target.
Ask Jeeves (ASKJ)
was the subject of a negative article in Barron’s Online.
Altria (MO)
will split into 2-3 companies, according to The Wall Street Journal.
Univision (UVC)
beat by a penny but guided lower.
Manpower (MAN)
and Monster.com (MNST)
were in focus on the good jobs number.
Nvidia (NVDA)
is in focus after several brokers had positive comments following the company’s
beating by 0.06 and quadrupling its quarterly profit.
DoubleClick (DCLK)
may be a takeover target, according to Business Week.
Brice Wightman