PortfolioCrafter - Market Commentary 5/25/06
May 25th, 2007 / 8:00 pm / by portfoliocrafter
Stocks ended a quiet pre-holiday session higher even as the market posted weekly losses, as investors saw weaker-than-expected existing home sales as boosting chances that the Federal Reserve will cut interest rates. The market also welcomed deal news from the Nasdaq Stock Market and Coca-Cola Co. Trading volumes were thin ahead of the three-day Memorial Day weekend.
Today, the Dow Jones industrial average closed up 66.15 or 0.49% to 13,507.28, the S&P 500 index closed up 8.22 or 0.55% to 1,515.73, and the tech-fueled Nasdaq composite closed up 19.27 or 0.76% to 2,557.19. For the week, the Dow closed down 0.4%, the S&P lost 0.5%, and the Nasdaq was almost unchanged.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by 22 to 9 on volume of 1.2 million shares. On the Nasdaq, advancers topped decliners 19 to 10 as 1.5 billion shares exchanged hands.
On the economic front, a reading on April existing home sales came in weaker than expected. But investors didn’t seem too concerned, especially following the strong reading on new home sales released yesterday. Investors appear to be looking for signs that the economy is slowing enough to take the edge off inflation. But too much of a slowdown could send the economy into a recession. Housing reports have been showing variability lately, but overall the real estate sector remains in a downward trend.
Shares of Coco-Cola closed up $0.65 to $51.89, on news that it has agreed to buy vitamin water maker Glaceau for $4.1 billion.
Stock of Nasdaq closed down $1.14 to $32.84, on news that it is buying Nordic exchange group OMX AB in a $3.7 billion cash-and-stock deal that will give the U.S. exchange a better toehold in Europe. Nasdaq had been under pressure to find a partner following its failed bid for the London Stock Exchange and after rival the New York Stock Exchange completed a deal to buy Euronext, creating NYSE Euronext.
Shares of Archstone-Smith Trust closed up $4.10 to $55.23, after UBS said it could be a takeover candidate. While investors cheered the news, but trading volume was light ahead of the long weekend.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
