PortfolioCrafter - Market Commentary 2/20/07
February 21st, 2007 / 6:45 am / by portfoliocrafter
Stocks rose and sent the Dow Jones Industrial Average to a record closing level, as reassuring comments from Federal Reserve Governor Susan Bies, along with upbeat results from Wal-Mart Stores Inc. and merger news, helped offset disappointing earnings from Home Depot Inc.
Today, the Dow Jones industrial average closed up 19.07 or 0.15% to 12,786.64, the broader S&P 500 closed up 4.14 or 0.28% to 1,459.68, and the tech-fueled Nasdaq closed up 16.73 or 0.67% to 2,513.04.
Market breadth was positive. On the New York Stock Exchange, losers beat winners by 5 to 3 on volume of 1.32 billion shares. On the Nasdaq, advancers topped decliners three to two on volume of 2.25 billion shares.
The comments from the Fed’s Bies that since the beginning of the year, the market has tended to welcome any economic news showing inflation pressures are receding, which might allow the Federal Reserve to cut interest rates, reassured the markets. While the day started off on a negative note as investors back tracked after last week’s run, the tone improved by midday, with the Nasdaq composite taking the lead.
Stock of Wal-Mart closed up $1.68 to $50.16, after reporting higher quarterly earnings that topped forecasts on sales that missed estimates. Its net income rose to $3.94 billion, up almost 10% from $3.59 billion in the period a year earlier.
Stock of Home Depot closed down $0.15 to $41.29, after reporting lower quarterly earnings that missed estimates. It posted a 28% drop in fourth quarter profit as the weak U.S. housing market depressed sales at its retail stores. Earnings in the fourth quarter fell to $925 million, from $1.3 billion, a year earlier.
Stock of Sirius jumped nearly 7% and XM Satellite shares gained 13% on news of their deal. Although there was some doubt about whether regulators would approve the deal. Shares of Sirus closed up $0.22 to $3.92, and those of XM Satellite closed up $1.44 to $15.42. Each will own half of the combined company, which would offer listeners a much wider variety of programming, including sports, news and high-profile entertainers such as shock jock Howard Stern.
Shares of JetBlue closed down $0.66 or 5% to $12.90, its CEO announced an overhaul that could cost the company $30 million dollars.
The tag includes about $10 million for refunding tickets for canceled flights, $16 million for issuing travel vouchers and $4 million for incremental costs such as hiring overtime crews.
U.S. light crude oil for March delivery tumbled $1.49 to $57.90 a barrel on the New York Mercantile Exchange.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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