What Trading Desks Are Saying About Rates
Stocks
were higher Friday on good economic news, although the market sold
off in the last hour. The Labor Department
reported that employers added 248,000 jobs in May, with gains seen in all
sectors. 32,000 new jobs went to manufacturing, the fourth straight monthly
increase and the biggest monthly increase since August 1998. April numbers
were revised up to 346,000 and 353,000 in March. The 947,000 jobs created from
March to May make it the strongest three-month stretch in four years. Two thirds
of the industries in America added jobs. A CNBC poll found that 19 of 22 dealers
anticipated a 25 basis point rise this month. Fed Funds are pricing in a 28%
chance of a 50 bps rate rise in August; last week, the percentage was zero.
Kmart
(
KMRT |
Quote |
Chart |
News |
PowerRating) said
it will sell 24 stores to Home Depot
(
HD |
Quote |
Chart |
News |
PowerRating) for up to $365 million in a
move to improve cash flow.
Chrysler
(
DCX |
Quote |
Chart |
News |
PowerRating) is
recalling 438,000 PT Cruisers for a flaw that may cause a fire.
Oil dropped 10% from record
highs. Rising U.S. stockpiles and an OPEC pledge of more oil were the cause.
In response to rising fuel
costs, Continental Airlines
(
CAL |
Quote |
Chart |
News |
PowerRating) is raising fares. For flights under
1000 miles the increase is $10 each way, and $20 flights over 1000 miles.
Next week, look for news from
medical stocks from the American Soc. of Oncology Conference. Also look
for PPI on Friday, with a 0.6% consensus. Traders will be focused on any market
follow-through, sector leadership and if oil prices continue to drop.
Tomorrow, Smarty Jones
goes for the Triple Crown at the Belmont Stakes in New York. If he wins,
Smarty will have taken home $2.1 million from the races, plus a $5 million bonus
for winning all three races. The last Triple Crown winner was Affirmed in 1978.
| Dow | +46.91 | 10242.82 |
| S&P 500 | +5.87 | 1122.51 |
| Nasdaq | +18.36 | 1978.62 |
Strong today were Amex Gold
Bugs
(
HUI.X |
Quote |
Chart |
News |
PowerRating) +2.35%, Airlines
(
XAL.X |
Quote |
Chart |
News |
PowerRating) +1.93%, Brokers
(
XBD.X |
Quote |
Chart |
News |
PowerRating) +1.88% and Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating) +1.61%.
Weak today was Natural Gas
(
XNG.X |
Quote |
Chart |
News |
PowerRating) -0.03%.
Economic news releases today:
Nonfarm payrolls that rose by 248,000; unemployment rate that stood flat at
5.6%; hourly earnings that rose to 0.3%, and Average workweek that met consensus
at 33.8.
10-year Notes were -70
at 109 105
The dollar
was -0.39 at 88.55
Gold was +2.40 at 390.60
Crude Oil was -0.84 at
38.44
Volume was 1.11 billion
on the NYSE, and 1.4 billion on the Nasdaq.
Market breadth was positive.
| NYSE | Issues | |
| Advancing | 2144 | Up Vol 825 |
| Declining | 1113 | Down Vol 272 |
| Ratio | 1.92 | 3.03 |
| Nasdaq |
||
| Advancing | 2049 | Up Vol 1060 |
| Declining | 1049 | Down Vol 319 |
| Ratio | 1.95 | 3.32 |
Stocks in the news:
Computer Associates
(
CA |
Quote |
Chart |
News |
PowerRating) said
Sanjay Kumar will leave the company.
Kumar resigned as chairman in April, but remained as chief software architect.
The company is attempting to settle a long-running criminal accounting probe.
Maytag
(
MYG |
Quote |
Chart |
News |
PowerRating)
announced plans to cut 20% of its salaried workforce and merge its Hoover unit
in a major restructuring effort.
Mandalay Resort Group
(
MBG |
Quote |
Chart |
News |
PowerRating) rose
after reporting earnings of $87.3 million on revenue of $729.4 million with
multiple analysts raising their earnings estimates on the company.
Brice Wightman
bricew@tradingmarkets.com