PortfolioCrafter - Market Commentary 2/16/07
February 16th, 2007 / 6:12 pm / by portfoliocrafter
Stocks closed higher, with the Dow Jones Industrial Average setting another record high, bolstered by Caterpillar Inc.’s share buyback and another spate of merger news. Investors eyed mixed economic news, a rebound in oil prices and the conclusion of Fed chief Ben Bernanke’s two days of congressional testimony.
Today, the Dow Jones industrial average closed up 23.15 or 0.18% to 12,765.01, the broader S&P 500 closed up 1.51 or 0.105 to 1,456.81, the tech-fueled Nasdaq closed up 8.72 or 0.35% to 2,497.1.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 19 to 13 on volume of 1.377 billion shares. On the Nasdaq, advancers barely edged decliners 15 to 14 on volume of 1.972 billion shares.
Beyond Bernanke’s testimony, investors are continuing to look to economic news to get a sense of whether the economy is indeed meeting the Fed’s forecast. There has been an ebb and flow of stronger and weaker economic reports.
A report showed a drop in industrial production in January and a bigger-than-expected decline in capacity utilization. Additionally, there has been a surprising rise in new unemployment claims. The number surged a bigger-than-expected 44,000 last week to hit 357,000 for the week ended Feb. 10. On the upside, the February NY Empire State index, rose to 24.4 in the month, rebounding from a weak previous month and easily topping forecasts.
Stock of Caterpillar closed up $1.54 or 2% to $67.70, after the heavy equipment maker said it was buying back $7.5 billion of its own stock.
Shares of Baker Hughes closed down $6.61 or 9% to $65.33, after reporting higher quarterly earnings that missed forecasts.
Stock of RealNetwork closed down $1.68 or 14% to $8.99, after the digital media company warned that first-quarter sales will miss analysts’ estimates. The forecast overshadowed the company’s otherwise positive fourth-quarter earnings report.
Shares of Baidu.com closed down $8.55 or 10% to $106.45, after the Chinese Internet company warned l that first-quarter sales won’t meet analysts’ forecasts. The company also reported higher fourth-quarter earnings, but investors focused on the forecast.
U.S. light crude oil for March delivery fell 1 cent to $57.99 a barrel on the New York Mercantile Exchange, after losing around 2 percent in the morning.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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