PortfolioCrafter - Market Commentary 8/29/07
August 29th, 2007 / 8:28 pm / by portfoliocrafter
Stocks rallied across the board in sharp contrast to the steep decline in the previous session, boosted by strong gains in technology and energy shares as well as particularly light trading volume. Investors took a big drop in the yen and encouraging comments from the chairman of the Federal Reserve as signs that the recent market turmoil is waning.
Today, the Dow Jones industrial average closed up 247.44 or 1.90% to 13,289.29, and the broader S&P 500 closed up 31.40 or 2.19% to 1,463.76. The Nasdaq Composite closed up 62.52 or 2.50% to 2,563.16.
Market breadth was positive and volume was light relative to recent weeks. On the New York Stock Exchange, winners beat losers by more than 7 to 1 on volume of 1.33 billion shares. On the Nasdaq, advancers beat decliners 22 to 6 as 1.67 billion shares changed hands.
The yen saw its biggest one-day % drop against the euro in three years, and against the dollar in two years, as investors sought to bail out of the low-yielding currency for riskier investments. The release of a letter by Federal Reserve Chairman Ben Bernanke stating that the Fed was monitoring trouble in the financial markets, and was prepared to step in and take action if necessary.
It is expected that there won’t be any stability until the next Fed policy meeting on Sept. 18, or until the markets hear something from the Fed that suggests a rate cut. Stocks got battered amid worries about the tightening credit market and the sub-prime mortgage market.
Stock of Google Inc. closed up after stating that the CFO George Reyes plans to leave the company. He will however, stay on to help search for his own replacement.
Shares of Apple closed up $7.26 to $134.08, on speculation that its Sept. 5 media event will include the launch of a new iPod.
Shares of Seagate Technology closed up $0.93 to $25.39, after the company boosted its fiscal first-quarter earnings and revenue forecast, citing stronger demand and better prices.
Stock of Altira closed up $0.73 to $69.80, after stating that it will spin off its Philip Morris international unit. Altria also said it was boosting its quarterly dividend by 8.7% to 75 cents per share. This however, is less than the 10% increase some analysts had been expecting.
Shares of PDL Biopharma closed down $4.80 or 20% to $18.80, after saying that it was withdrawing its 2007 financial guidance and divesting its marketed drugs. The biotech also said that an experimental drug in late-stage trials failed.
U.S. light crude oil for October delivery closed up $1.78 to settle at $73.51 a barrel on the New York Mercantile Exchange, spiking after the government’s weekly inventory report showed a bigger-than-expected drop in oil and gas supplies.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
