PortfolioCrafter - Market Commentary 11/29/05
November 29th, 2005 / 10:17 pm / by portfoliocrafter
The investors continued to backpedal after a five-week rally that pushed the major gauges to levels not seen since 2001. Stocks ended slightly lower after a raft of upbeat economic data offered only a temporary boost to the market. Many investors prefer to look ahead to the November employment report that is due at the end of the week.
Today, the Dow Jones industrial average closed down 2.56 to 10,888.16, the broader Standard & Poor’s 500 ended up 0.02 to 1,257.48, while the Nasdaq composite index closed down 6.70 or 0.3% to 2,232.71. A number of large technology and biotech shares slipped, weighing on the Nasdaq.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by more than 19 to 13 on volume of 1.60 billion shares. On the Nasdaq, advancers edged decliners by 15 to 14 as 1.78 billion shares changed hands.
Wednesday brings a slew of economic news, including the read on gross domestic product growth. The GDP is expected to have grown at a 4.1% annual rate versus an initial read of 3.8%. GDP grew at a 3.3 percent rate in the second quarter. New home sales jumped 13% to a record 1.42 million annual rate, well above forecasts. A key index of consumer confidence rose to 98.9 in November, the Conference Board reported Tuesday, topping forecasts for a rise to 90, with consumers reacting to lower energy prices.
A number of chipmakers were weaker, including Nvidia that closed down $2.40 to $35.48, Google closed down $19.94 to $403.54, Yahoo closed down $0.92 to $40.19, and eBay slipped down too. Advanced Micro Devices closed down $0.91 to $25.58, on a report showing that its flash-memory unit will post a quarterly loss. Wal-Mart closed down $0.99 or 2% to $49.01, amongst a number of retailers that declined. The retailer stated that its November same-store sales results are 4.3% higher than a year ago. These results, do not include Sunday’s sales. Shares of Calpine slumped 57% to 54 cents after the company announced the departure of its founder Peter Cartwright from the chairman, president and CEO positions.
Merck closed up $0.46 or 1.6% to $30.02, bouncing back after yesterday’s sell off. PepsiCo Inc. said 2005 earnings should range between $2.38 and $2.39 a share, with core earnings between $2.64 and $2.65 a share. This made the stock rise 15 cents to $59.77.
Downgrading of BellSouth Corp. and Qwest Communications International Inc led to pressure on these stocks. BellSouth Corp closed down 22 cents at $27.62, while Qwest shares fell as much as 3.7% to $5 before trimming losses to end down just 2 cents at $5.17.
U.S. light crude oil for January delivery fell 86 cents to settle at $56.50 a barrel on the New York Mercantile Exchange after slumping more than 2 percent Monday.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
