PortfolioCrafter - Market Commentary 7/27/06
July 27th, 2007 / 10:06 pm / by portfoliocrafter
Stocks accelerated their losses, capping the Dow Jones Industrial Average’s worst week in more than four years, as ongoing worries about deal-financing overshadowed largely positive economic data. Stocks tumbled for the second straight session amid continued worries about credit markets and a surge in oil prices.
Today, the Dow Jones industrial average closed down 208.10 or 1.54% to 13,265.47, the broader S&P 500 closed down 23.71 or 1.60% to 1,458.95, and the0 tech-fueled Nasdaq composite index closed down 37.10 or 1.43% to 2,562.24. For the week, the Dow lost 4.2%, the S&P sank 5%, and the Nasdaq declined 4.6%.
Market breadth was negative as losers beat winners by 2 to 1 on the New York Stock Exchange on volume of 2.2 billion shares. Decliners topped advancers on the Nasdaq by nearly 11 to 5 on volume of 2.7 billion shares.
Investors continue to worry about the corporate bond market, and it appears that fear is worse than reality. Credit market fears and more troubling news from the housing sector have sent stocks tumbling. The Treasury Secretary Paulson said in an interview that the U.S. economy is the strongest he has seen in several decades, helped by growth outside the U.S. Additionally, the Commerce Department reported that economy grew at 3.4% in the second quarter, and a key inflation reading came in tamer than expected.
Shares of Cadbury closed up $0.42 to $48.86, on delaying the sale of its North American beverage unit, which produces Dr. Pepper and Snapple, citing recent turmoil in the debt market. This auction may be delayed by a matter of weeks but they still expect the business to fetch $14.4-15.4 billion.
Shares of Chevron closed down $1.90 to $85.61, despite reporting improved earnings. Its net income in the second quarter increased to $5.38 billion, from $4.35 billion last year.
Stock of Amgen closed down $0.35 to $55.81, after reporting better than expected earnings. The company had an EPS of $1.12, beating analysts’ estimates of $1.07. Overall, Amgen saw a net profit of $1.02 billion, compared with $14 million a year ago. Its revenue increased 3% to $3.7 billion, up from $3.6 billion a year ago.
Shares of Gap closed up $0.92 or 5% to $17.83, after it named Glenn Murphy as its chairman and CEO. Murphy has more than 20 years of experience in retail, and is expected to start next week.
U.S. crude for September soared to finish up $2.07 to $77.02 on the New York Mercantile Exchange, moving within striking distance of its all-time record high of $78.40 hit last July.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
