PortfolioCrafter - Market Commentary 9/28/07
September 28th, 2007 / 7:18 pm / by portfoliocrafter
Stocks closed mildly lower, but with the major indexes netting monthly, quarterly and year-to-date gains, after a slew of economic data fell largely in line with expectations and investors looking for clues as to whether the Federal Reserve would cut interest rates again next month. Some upbeat economic news and cautious comments from a Fed official dampened bets that the central bank will keep cutting interest rates next month.
The Dow Jones industrial average closed down 17.31 or 0.12% to 13,895.63, the broader S&P 500 closed down 4.63 or 0.30% to 1,526.75, and the tech-fueled Nasdaq composite closed down 8.09 or 0.30% to 2,701.50. For the month, the Dow gained 3.9%, the S&P rose 3.6%, and the Nasdaq climbed 4%. For the quarter, the Dow rose 3.5%, the S&P climbed 1.5%, and the Nasdaq gained 3.8%. For the year, the Dow is up 11.3%, the S&P is ahead 7.6%, and the Nasdaq has advanced 11.8%. Market breadth was negative. On the New York Stock Exchange, losers beat winners by 9to 7 on volume of 1.3 billion shares. On the Nasdaq, decliners topped advancers by 3 to 2 as 1.90 billion shares changed hands.
The better than expected reading on consumer spending in August, surprised many investors given the tightened credit climate at the time and no signs of recovery in the housing market. Investors had been betting that more negative economic news would push the Federal Reserve to keep cutting interest rates, as it did last week, to keep the economy from slipping into a recession. This has had the investors disappointed. Shares of 3Com Corp. closed up $1.26 or 34.24% to $4.94, after it agreed to sell itself for $2.2 billion to Bain Capital Partners LLC and Huawei Technologies Co., the largest networking company in China. The all-cash offer values 3Com at more than $5.30 a share, and represents a premium of 44% over Thursday’s closing price of $3.68.
Stock of Alcatel Lucent closed up $0.42 or 4.31% to $10.17, after its CEO Patricia Russo has been given a month to devise an emergency restructuring plan for the board after the company issued its third profit warning under her leadership earlier this month.
U.S. light crude for November lost $1.28 to $81.60 a barrel on the New York Mercantile Exchange.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
