Solid quarter for stocks ends on a low note, as latest readings on the state of the economic recovery fail to dazzle.
Consumer discretionary leads sector decliners, followed by tech, industrials and materials. Energy and financials are the only two sectors posting gains.
US dollar was weak all session, but that didn’t serve as much inspiration for stocks. Now crude oil…that’s a different story, as weaker greenback helps oil finish at a 17-month high. Perhaps equity investors noticed that bubbling crude, and its implications for the still-convalescing consumer. Oil’s probe toward $84 a barrel would help explain the weakness in consumer discretionary stocks. Actually, it almost seems too rational for this market.
DJIA slips 50.79 to 10856.63, and Nasdaq Comp sheds 12.73 to 2397.96. S&P 500 ends 3.84 lower at 1169.43.
Weekly jobless claims, February construction spending and March ISM manufacturing index all due tomorrow. March auto sales are also due, and it’s the final session of the week for stocks, with the market closed in observance of Good Friday.
- Paul Volcker’s still confident his rule will pass. And, as Simon Johnson points out, Volcker’s message remains loud and clear: “We need a much stronger approach to big banks – an approach that will strip government-backed banks of their ability to take crazy risks and, most likely, an approach that significantly constrains (and hopefully even reduces) their size.”
- Is the equity market approaching a period where good news on the economic front is bad for stocks? “The real Goldilocks for this market is the one that is just perfectly weak,” Pragmatic Capitalist says. “Strong enough to keep the government pouring the kool-aid, but not strong enough to force them to remove the bowl.”
- SEC investigating about two dozen financial companies to determine if they engaged in accounting shenanigans prompts former labor secretary Robert Reich to wonder “where on earth has the SEC been?”
- “Lack of focus is still a major problem at AOL, and if the company doesn’t sharpen its focus quickly, it will continue to be a jack of all trades and a master of note,” Henry Blodget says.
- Recent research from NY Fed shows upstate NY’s housing markets were insulated from the boom/bust cycle; Buffalo, Rochester and Syracuse have actually enjoyed price increases throughout the recession. “The reason why is fairly simple: ‘The region’s relatively low incidence on nonprime mortgages,’” Barry Ritholtz writes.
- Employers squeezing more productivity out of workers doesn’t explain the economy’s lagging labor market, Dean Baker says. “The rapid productivity growth seen in the last four quarters is a typical pattern at the end of a recession.”
- Distortions in Friday’s monthly jobs report–temporary census hiring and weather-related boost to employment–could create false sense of security about the labor market. “This allows legislators to claim that past interventions are having a greater impact than they actually are, and escape the difficult politics of trying to implement additional stimulus measures,” Mark Thoma says.
- Looks like Apple (AAPL) stands to gain from at least one university using the iPad to attract students. Seton Hill University in
Pennsylvania says every incoming freshman will be given a tablet in the 2011-12 academic year, NYT’s Media Decoder blog reports.
- There were 14 IPOs that came to market this month. Since last March, 112 IPOs have come to market. “IPOs are starting to make a comeback, albeit a slow one,” Bespoke says. “The average monthly number of IPOs since last month is just over eight. To get to a healthy level, the average should get into the 20s.”
Posted by Steven Russolilloon March 31, 2010 Media, Technology /
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Maybe Palm should start making these bad boys? Maybe not.
As word circulates that both AT&T (T) and Verizon Wireless could be getting new iPhones sooner than later, we can’t help but wonder if Palm is close to hitting rock bottom.
As we detailed a few weeks ago when Palm released disappointing results and a putrid outlook, the company’s famed bet on Pre, Pixi and its WebOS operating system hasn’t lived up to expectations. Since peaking in September, the stock has cliff-dived, losing 75% of its value during the last six months.
With the already-crowded smart phone market potentially set to get new iPhones, Digital Daily blogger John Paczkowski wonders if this is turning into Palm’s worst nightmare.
“Going head-to-head with the iPhone 3GS on AT&T will be difficult enough for Palm,” he says. “Competing with the smartphone’s souped-up successor on AT&T and perhaps Verizon could be disastrous.”
Palm CEO Jon Rubinstein previously said if Pre could’ve launched on Verizon prior to Motorola’s (MOT) Droid, it would’ve received more attention than it’s currently getting.
“Will he make similar claims if Palm suffers further woes from a next-generation iPhone on AT&T — or a brand new one on Verizon?” Paczkowski ponders.
It’s been a rough few months for Palm, and without a happy ending in sight it seems like the smartphone pioneer’s destiny is heading down one path: a buyout, Saad Fazil writes at VentureBeat. And Research In Motion (RIMM) may be the buyer that makes the most sense.
Fazil says Palm would help RIM compete in the dog-eat-dog smartphone market, especially as it’s currently losing market share to Apple (AAPL) and Google (GOOG).
“In the long run, when WebOS and BlackBerry devices converge, RIM will come across as a formidable competitor to iPhone, Windows Phone and Android,” Fazil says.
Newswires’ Kathleen Madigan and Madeleine Lim examine the ADP jobs report, Greece’s latest plan to tap global investment markets and the end of the Fed’s mortgage-backed securities purchase program. It’s Tomorrow’s News Today:
Do you see a robust rebound? No, do you? Not me, what about you? Ah, hard to tell.
Incoming economic data still not showing any convincing strength in the rebound, though shafts of light may be poking through.
Two regional ISM reports — New York and Chicago both show economic expansion continued at decent clip in March, but both measures slowed notably vs their February readings. Chicago Business Barometer dropped back to 58.8 from 62.6 in February, and was just above December’s 58.7. Meanwhile, ISM-NY’s Current Business Conditions index fell to 60.6 from Feb’s 78.1. “Readings above 70 usually are not sustained for long,” the report said. Indeed.
ISM-NY’s index was also lowest since December’s 59.7 reading, and below both October and November. The report’s employment gauge ticked up to 55.1 from 53.3 in Feb, but the quantity of purchases measure, along with prices paid and supplier delivery time all eased vs February.
That was our initial reaction to ADP’s March jobs report, which had to send shivers down the spines of all those recovery pushers. But delving a little deeper into the details suggests the data may not be as bad as originally interpreted.
ADP’s private-sector report showed the economy lost 23,000 jobs this month, much worse than the 50,000 gain economists were expecting. February’s decline was also revised downward to 24,000 from 20,000.
That’s a stark contrast to the robust turnaround economists are expecting in Friday’s monthly jobs report. Consensus calling for 200,000 jobs added in March after 36,000 jobs were lost last month. And some folks wouldn’t be surprised if the economy added 300,000 or 400,000 jobs this month.
Keep in mind, though, that Friday’s number will include government workers, while the ADP report doesn’t. And the Labor Department’s data will get an additional boost from the bad weather that plagued February’s report.
Even ADP tries to hedge its own estimate, blatantly saying its numbers don’t include any weather rebound from February or the federal hiring for the Census.
“For both these reasons, it is reasonable to expect that Friday’s employment figure from the BLS will be stronger than today’s estimate,” ADP says.
Final session of the first quarter may have a little more character than the narrow market vacillations we’ve seen lately. Swath of data may foster some choppy trading as books get closed on the quarter.
Stocks mostly down in Asia overnight, flat to slightly higher in Europe. After picking up some steam late yesterday, the USD index has retreated again to levels we saw at this time yesterday morning.
ADP’s estimate on March employment due at 8:15am; ISM-NY March business conditions index set for 8:30am; ISM-Chicago due at 9:45am ET; and February factory orders at 10:00am.
USD index at 81.23. S&P futures down 1.30; 10-yr slightly higher, yield at 3.86%.
Stocks finish slightly higher in an indecisive session, with NYSE advancers edging decliners by about 80 issues. Bulls got a brief leg up on a marginally better-than-expected consumer confidence report, but there wasn’t much conviction behind the move.
Stocks also supported in the morning by a weaker US dollar; that turned around in the afternoon and seemed to keep a lid on stock gains.
DJIA rises thanks to 3M and Verizon, which together provide about 28 upside points for the average. Most sectors finish with small advances, though financials, telecom and utilities end in the red. DJIA gains 11.56 to 10907.42, and Nasdaq Comp rises 6.33 to 2410.69. S&P 500 adds 0.05 to 1173.27.
DJIA records its 19th winning session out of the last 23; haven’t seen a streak like that since May 2007. By the way, back then, unemployment was 4.5%, and there were only 6.8 million unemployed folks. At last count, there were 14.9 million without jobs. Slightly different economic (and social) situation. The average is now up 66% from its March ’09 low, and down about 23% from the October 2007 high.
ADP’s estimate on March jobs due tomorrow, along with business/manufacturing readings from NewYork and Chicago, and Feb factory orders. That data better dance the cha-cha, folks, because stocks are clearly pricing in perfection.
- SEC investigating a few dozen financial firms regarding repo 105s is a welcome move, but it brings into question whether the agency has enough reach to be effective, Yves Smith says.
- Amazon (AMZN) currently controls nearly all of the e-book market. That will change with the iPad, Nook and others taking share, but maybe they can all thrive together, MediaMemo blogger Peter Kafka ponders.
- Current financial reform proposals are “toothless facades of what real regulation should look like,” Barry Ritholtz writes. He offers 10 questions finance reformers need to answer before passing legislation.
- New iPhones potentially on both AT&T (T) and Verizon Wireless may possible be Palm’s worst nightmare, Digital Daily blogger John Paczkowski says.
- This March has been a great month for stocks. And more gains may be on the way. April’s historically one of the best months of the year for the market, with the Dow averaging a 1.9% gain in April over last 50 years, according to Bespoke.
- “Regulation has to be smarter than something as simple as narrow banking,” Paul Krugman says. “Government backing — the 21st-century version of deposit insurance — plus regulation so that the backed institutions don’t abuse the privilege is still the way to go.”
- Non-profits can’t possibly save print journalism, Newsosaur blogger Alan Mutter argues.
- Ireland’s government announced plans to inject billions of euros into the nation’s beleaguered banking system and outlined bigger-than-expected discounts on loans to be transferred by financial institutions to the nation’s “bad bank.”
- Wondering what the next big battle between Wall Street and Washington will be? Capital ratios and liquidity, Andrew Ross Sorkin says.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
The bridge that collapsed on Interstate 5 bridge over the Skagit River in Washington was listed as “functionally obsolete” and “fracture critical,” which means the whole sha-bang could come tumbling down if one major part fails. Click here to read the details from USAToday. This sort of thing shouldn’t be happening in a modern, developed nation. Barry LePatn […]
