The Wall Street Journal reported that the Dow Jones Industrial Average (DJI) crossed zero 49 times Monday in one of the most uneventful sessions in months. And the reason for the lack of action was that investors were waiting to see what the Treasury Department’s new bank rescue plan contains.
Banks and other financial stocks were generally higher, as some investors headed in that direction, but the mover of the day was General Electric (GE).
The big Dow stock rose 14% after its CEO said that the dividend was being “evaluated” — in other word, GE may cut its dividend. In a “world-turned-upside-down” even that seemed a bit strange but investors’ reasoning was that the hefty $1.24 (9.8%) dividend could be better put to use by the company and that GE could directly benefit from the firm’s exposure to the financial markets.
Barclays’ (BCS) shares jumped 11% following better-than-expected earnings and a statement that it would not have to ask the British government for more funds and also that it planned to pay a dividend in 2009. And Hartford Financial Services (HIG) gained more than 18% after big losses last week.
There were just a few important earnings but three stood out: Rohm and Haas (ROH) beat Q4 estimates, Whirlpool (WHR) missed its Q4 target, and following a huge Q4 loss reported on Friday, Moody’s (MCO) placed Weyerhaeuser (WY) on review for a possible downgrade.
At the close, the Dow Jones Industrial Average (DJI) was off 10 points, closing at 8,271, the S&P 500 (SPX) gained a point at 870, and the Nasdaq (NASD) was unchanged at 1,592.
The New York Stock Exchange traded 1.2 billion shares, with advancers slightly ahead while on the Nasdaq, decliners were ahead by 8-to-7 on volume of 702 million shares.
The March crude oil contract fell 53 cents to $39.64 a barrel, and the Amex Energy SPDR (XLE) rose 18 cents to $49.65.
The February gold contract fell $21.50, closing at $892.40, and the PHLX Gold/Silver Index (XAU) closed at $126.10, off $3.62.
What the Markets Are Saying
Three of the major indices have stalled at their 50-day moving averages (the Dow, the S&P 500 and the NYSE Composite), but the Nasdaq is leading the way — pushed along by successes in the technology sector and, more recently, the financial sector.
In a major market turn, it is common for technology stocks to lead, as in 2003. But the Nasdaq, too, is now at a critical resistance line — the mid-point (1,600) of its overall range that began in October.
All four of the indices appear to be waiting for the catalyst that will either move stocks higher or bring in sellers for another test of the January lows.
It is curious how the market seems to anticipate crucial happenings like the upcoming announcement today from the Treasury Department — creating more drama as investors focus on one item of thousands that could move stocks.
All eyes will be on Treasury Secretary Tim Geithner, so let’s hope that the president is correct when he said last night, “I want all of you to show up at [Geithner’s] press conference as well; he’s going to be terrific.”
He had better be, or we may be faced with more months of market indecision.
Today’s Trading Landscape
Earnings of note to be reported include: Ameristar Casinos (ASCS), Applied Materials (AMAT), Ark Restaurants (ARKR), Arrow Electronics (ARW), ATC Technology Corp (ATAC), BankAtlantic Bancorp (BBXT) and Bob Evans Farms (BOBE).
Cano Petroleum (CFW), Cascade Microtech (CSCD), Centene Corp (CNC), Cerner Corp (CERN), CF Industries (CF), Choice Hotels Int’l (CHH), Computer Sciences Corp (CSC), Coventry Health Care (CVH), Cynosure (CYNO), DHT Maritime (DHT) and Douglas Emmett (DEI).
Elan Corp plc (ELN), Expeditors Int’l (EXPD), Fidelity National Information (FIS), Gaylord Entertainment Co (GET), General Cable Corp (BGC), Genworth Financial (GNW), Getty Realty (GTY), Given Imaging Ltd (GIVN), Hanger Orthopedic Group (HGR), Healthcare Services Group (HCSG), HealthSpring (HS) and Hercules Offshore (HERO).
Intellon Corp (ITLN), IntercontinentalExchange (ICE), Learning Tree Int’l (LTRE), LECG Corp (XPRT), Macrovision (MSVN), Manhattan Associates (MANH), Maxygen (MAXY), Molson Coors Brewing Co (TAP) and MTS Medication Technologies (MTSI).
National Financial Partners (NFP), National Research Corp (NRCI), NetSuite (N), NeuStar (NSR), NVIDIA Corp (NVDA), Patriot Coal Corp (PCX), Pepsi Bottling Group (PEP), Perot Systems (PER), ProLogis (PLD), Qiagen N.V. (QGEN), Quest Software (QSFT), Qwest Communications (Q), Radware (RDWR), Rentech (RTK) and Rush Enterprises (RUSHA).
Sierra Wireless (SWIR), Sport Supply Group (RBI), Syniverse Technologies (SVR), Syntel (SYNT), Terra Industries (TRA), Terra Nitrogen (TNH), Tetra Technologies (TTI), The DirecTV Group (DTV) and TTM Technologies (TTMI).
UBS (UBS), Unisys (UIS), United Microelectronics Corp (UMC), VF Corp (VFC), Vishay Intertechnology (VSH), Vitran Corp (VTNC), VNUS Medical Technologies (NVUS), Williams Controls (WMCO), XL Capital Ltd (XL) and Yingli Green Energy Holding Co Ltd (YGE).
The following economic reports due: International Council of Shopping Centers (ICSC) Chain Store Sales Index for Feb.7, Redbook Retail Sales Index for Feb. 7, December Wholesale Trade (the consensus expects negative 0.8%), Feb. 6 API Oil Industry Report, and ABC/Washington Post Consumer Confidence for Feb. 7.
Qwest Communications (Q) reported Q4 results of 12 cents versus an expected 10 cents. The big announcement regarding the bank rescue plan will be made at 11 a.m. Eastern.
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