PortfolioCrafter - Market Commentary 3/26/07
March 26th, 2007 / 8:37 pm / by portfoliocrafter
Stocks reduced their losses to close mixed after investors took heart from the close of crude futures below $63 a barrel and some positive brokerage talk about technology bellwethers like eBay Inc. and Dell Inc. Earlier in the session, stocks dropped sharply after news that sales of new homes unexpectedly fell to a 7-year low in February, fueling concerns that the stumbling housing market might derail economic growth. However, gains in technology and commodities offset the impact of the weak read on new home sales.
Today, the Dow Jones industrial average closed down 11.94 or 0.10% to 12,469.07, the broader S&P 500 closed up 1.39 or 0.10% to 1,437.50, and the Nasdaq closed up 6.70 or 0.27% to 2,455.63.
Market breadth was negative. On the New York Stock Exchange, losers edged winners by a narrow margin of 16 to 15 on volume of 1.468 billion shares. On the Nasdaq, decliners topped advancers 16 to 13 on volume of 1.764 billion shares.
The housing market report, showed that new home sales in February eased to the slowest pace in more than six years. The government’s latest reading on the real estate market showed the glut of homes on the market reached a 16-year high. New homes sales were down about 4% from the 882,000 rate in January. The pace of sales tumbled 18.3% from February 2006. This shows that the housing market has not yet hit bottom.
Stock of Citigroup closed down $0.18 to $51.54, after reporting that it is looking to cut 15,000 jobs, as part of a broader restructuring plan that could cost the bank $1 billion. This cut would represent about a 5% reduction in Citigroup’s worldwide work force of 327,000. Some of the reduction could be achieved by not filling positions opened through normal attrition.
Shares of Intel closed up $0.02 to $19.29, on news that it will invest $2.5 billion to build a chip plant in China, with the production of chipsets to begin in 2010. Groundbreaking is scheduled for July in Dalian, which will be Intel’s first semiconductor plant in Asia. The 12-inch wafer plant will have a monthly capacity of 52,000 wafers and will use 90-nanometer technology to produce chip sets.
U.S. light crude oil for May delivery added 63 cents to $62.91 a barrel on the New York Mercantile Exchange after the U.N. tightened sanctions against Iran amid ongoing worries about the nation’s nuclear program, and its capture last week of British military personnel.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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