S&P 500 outpacing rival Dow as stocks rally

BOSTON (MarketWatch) — The S&P 500 Index and the Dow Jones Industrial Average are commonly used to measure the performance of U.S. stocks, but the disparity in the benchmarks’ returns this year during the powerful rally highlights their different approaches to tracking the market.

So far in 2009 through Wednesday’s close, the S&P 500 (SPX 1,092, +18.83, +1.75%) had posted a year-to-date gain of 17.1%, handily outpacing the Dow’s(INDU 10,016, +144.95, +1.47%) 10.8% rise.

“While the Dow Jones Industrial Average and the S&P 500 share the spotlight as the two most-watched measures of the U.S. equity markets, the behavior of these indexes does vary considerably based on market conditions,” said Nicholas Colas, chief market strategist at ConvergEx.

“During up-trending markets, the broader based S&P 500 has the edge. During down markets, however, the Dow outperforms,” Colas wrote in a report Thursday. “The recent weakness in the U.S. dollar should benefit the more multinational Dow, especially if the greenback’s weakness spurs a long-awaited market correction.”

The performance gap between the S&P 500 and the Dow is due to several key methodology differences, even though investors see both indexes used in media reports recapping the market’s daily moves.

First, the 30 stock components in the venerable Dow are weighted by share price. The S&P 500, on the other hand, uses a market-capitalization-weighting strategy.

The broader S&P 500 holds a greater number of stocks and so digs deeper into markets by holding more smaller-cap companies. Read earlier story profiling the indexes.

Blue-chip battle

Both indexes have a subjective element because the stocks are selected by people rather than by objective rules. The stocks in the Dow are chosen by the editors of The Wall Street Journal, while an index committee maintains the S&P 500.

The Dow Jones Industrial Average was first published in 1896. It was originally made up of a dozen stocks and designed to give investors a gauge of the overall market’s performance.

The modern S&P 500, meanwhile, has been around since the 1950s and today is preferred by investment professionals to track the market. Yet perhaps for nostalgic reasons, the mainstream press often quotes the Dow in market reports.

“The amount of money that tracks the S&P 500 far outweighs that which tracks the Dow Jones Industrial Average, but it is still the Dow that most Americans associate with the U.S. equity markets,” said Colas at ConvergEx. “Just look at any general-interest evening TV newscast; it is the Dow that gets the top billing.”

Nearly $1 trillion in indexed assets tracks the S&P 500, according to Standard & Poor’s. “Although the S&P 500 focuses on the large-cap segment of the market, with approximately 75% coverage of U.S. equities, it is also an ideal proxy for the total market,” says S&P, a unit of McGraw-Hill Cos.

There are index funds and exchange-traded funds tracking both benchmarks. The ETFs include SPDR S&P 500 ETF (SPY 109.33, +0.02, +0.02%), iShares S&P 500 Index Fund(IVV 109.67, -0.03, -0.03%) and Dow Diamonds (DIA 100.25, +0.02, +0.02%).

Explaining the performance gap

Through the end of September, the S&P 500 had a five-year annualized return of 1%. Its ten-year return was slightly in the red at negative 0.2%, according to S&P. The Dow has fared slightly better with a five-year annualized return of 1.9%, and a 10-year gain of 1.6%, according to Dow Jones, which like MarketWatch is owned by News Corp.

“The S&P 500 has performed better in up-trending markets over the past few years. During both this year’s recovery in stocks from their March lows and the longer rally in equities during the mid-1990s, the S&P 500 did better than the Dow,” Colas noted

However, the Dow tends to outperform during strong bear markets. “As equity markets fell in 2007 and 2008, the Dow declined less that the S&P 500,” the strategist said. Even though the indexes tend to perform similarly over longer periods, return differences like those seen this year can “persist for quite some time.”

The S&P 500′s relatively larger tilt to smaller stocks has been helping during the rally that has pushed the index up by 56.3% since the March 9 low, as of Wednesday’s close. The Dow has risen 48.5% since then, according to FactSet Research.

“Smaller-cap stocks (especially those with low stock prices) have been much of the horsepower in the current market rally,” Colas wrote.

Yet if the stock market experiences the correction that many expect, those small stocks “will likely see the brunt of the initial selling.” And if markets again grow skittish over the troubled banking system, the Dow would benefit from its lower exposure to financial stocks compared with the S&P 500. The Dow has a “nonexistent weighting in smaller banks and finance companies,” Colas said.

The Dow would also benefit more if the U.S. dollar keeps sliding, he added. “By virtue of the Dow’s concentration in large multinational companies, it should be better positioned to benefit from the current swoon in the greenback,” Colas observed. “These enterprises should be able to generate incremental profits by repatriating foreign earnings into their home currency, the U.S. dollar.”

John Spence is a reporter for MarketWatch in Boston.

US Mortgage rate inches lower

NEW YORK (MarketWatch) — The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 5.07% in the week ending Thursday, down from last week’s 5.08% and the year-ago 5.93%, according to Freddie Mac’s weekly survey. The 15-year fixed-rate loan averaged 4.50%, down from the week-ago 4.54% and the year-ago 5.54%. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.51%, compared with 4.59% a week ago and 5.87% a year ago. “Mortgage rates remained historically low over the past two weeks, keeping housing very affordable,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “As a result, mortgage applications leapt 17% over the week ending Sept. 4, led by a 23% jump in refinancing demand, according [to] the Mortgage Bankers Association.”

Apple New product

Apple Premieres iTunes 9

September 9, 2009

Apple today introduced iTunes 9, the latest version of the world’s most popular software application to purchase, manage and play media, packed with innovative features such as iTunes LP, Home Sharing and Genius Mixes, as well as a redesigned store and improved syncing. iTunes 9 makes it easier than ever to discover, purchase and enjoy your music, movies, TV shows, and apps for iPhone and iPod touch from Apple’s revolutionary App Store.Filed under: iPod+iTunes. Read more: apple.com/itunes

Apple Introduces New iPod touch Lineup

September 9, 2009

The new iPod touch, starting at just $199, gives you a great iPod, a great pocket computer, a great game player and access to Apple’s revolutionary App Store with over 75,000 applications. iPod touch features Apple’s revolutionary Multi-Touch user interface, a gorgeous 3.5-inch widescreen glass display, Wi-Fi, Bluetooth, and a built-in accelerometer and speaker in an amazingly thin metal design that slips easily into your pocket.Filed under: iPod+iTunes. Read more: apple.com/ipodtouch

Apple’s iPod shuffle Now Starts at Just $59

September 9, 2009

The iPod shuffle, the world’s smallest music player and the first music player to talk to you, is available now, starting at just $59, in five great colors. iPod shuffle’s intuitive controls are conveniently located on the headphone cord, letting you navigate and enjoy music without even looking. Filed under: iPod+iTunes. Read more: apple.com/ipodshuffle

Apple Introduces New iPod nano With Built-in Video Camera

September 9, 2009

The new iPod nano adds a video camera, mic and speaker to the world’s most popular music player, allowing you to shoot video wherever you are, view it on your iPod nano and use your computer to easily transfer your videos to YouTube. The new iPod nano—available today in an 8GB model for $149 and a 16GB model for $179—features an ultra-thin and sleek design with a larger 2.2-inch color display and gorgeous polished aluminum and glass enclosure in nine brilliant colors. Filed under: iPod+iTunes.Read more: apple.com/ipodnano

Global recession over, but will leave scars: IMF

MARKET PULSE

Aug 18, 2009, 12:18 p.m. EST

Global recession over, but will leave scars: IMF

STORYCOMMENTS SCREENER (32)

AlertEmailPrintShareBy Rex Nutting

WASHINGTON (MarketWatch) — The global recession is over and a recovery has begun, Olivier Blanchard, the top economist for the International Monetary Fund, said Tuesday. “The turnaround will not be simple,” Blancard wrote in an article released by the IMF. “The crisis has left deep scars, which will affect both supply and demand for many years to come.” Growth is coming for most countries, he said, but it won’t be strong enough to reduce unemployment for a while. Potential output may have been permanently reduced. Growth is still highly dependent on government stimulus from fiscal and monetary policies. Sustaining growth “will require delicate rebalancing acts, both within and across countries,” he said.

Credit crunch likely to persist, bankers say

Aug 17, 2009, 2:21 p.m. EST

Credit crunch likely to persist, bankers say

Lenders still clamping down on business, real estate, consumer loans

Explore related topics

Banks

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By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) — Banks were still clamping down on lending to businesses and consumers over the past three months, and they said they planned to keep their credit standards tight for at least a year, the Federal Reserve reported Monday.

In its quarterly survey of banks’ senior loan officers, the Fed said lending standards got even tighter for almost every type of loan, from prime residential mortgages to commercial and industrial loans. The survey covered May, June and July.

Banks have been tightening their standards for various types of loans for more than two years. For residential mortgages, banks have tightened their standards for 11 straight quarters by increasing requirements for down payments, interest-rate spreads, or credit scores.

Vanguard’s bold move into bonds

Vanguard is pushing into exchange-traded bond funds. Now bond-fund buyers can expect more choices, says Dan Wiener, editor of the Independent Adviser for Vanguard Investors newsletter.

In the most recent survey, no banks reported easing their terms for residential real estate loans, commercial real estate loans, or consumer credit cards. Less than 4% of banks said they had eased terms on commercial and industrial loans and for home-equity loans.

Tighter lending standards reduce the amount of credit available. The banks also said demand for most types of loans had declined. One exception: Demand for prime-quality residential loans rose slightly, on net.

The Fed asked the banks when they thought their policies would get back in line with their long-term trend. For commercial and industrial loans to businesses, just 13% said conditions would return to normal by the middle of 2010, with another 36% saying it would be in late 2010.

For commercial real estate, just 2% said normal credit policies would return within a year, and 40% said policies would remain tighter than usual for the foreseeable future.

For prime mortgages, 9% said they expected policies to return to normal within a year, and 42% said policies would remain tighter than usual for the foreseeable future.

For nonprime borrowers, a majority of banks said policies would remain tighter than normal for the foreseeable future, and fewer than 10% said standards would normalize within the year.

Details

For commercial and industrial loans, 35% of banks tightened standards for their biggest customers and 36% tightened for smaller customers. Most banks said the uncertain economy was the major reason for tightening credit. No banks eased standards. About 60% of the banks reported falling demand for such loans.

For commercial real estate loans, 47% of banks tightened lending standards and none loosened them. About 70% reported weaker demand.

For prime mortgages, 22% tightened standards and none eased. About 40% reported higher demand. For nontraditional loans, 46% tightened standards and none eased. About 13% reported higher demand. For subprime loans, fewer than three banks responded, so the Fed did not report any results.

For home-equity loans, 36% tightened standards and 4% loosened them. About 28% reported weaker demand.

For credit cards, 36% tightened standards and none eased. About 31% said demand was weaker.

Shanghai skids 5.8%, leads Asian markets down again

Aug 17, 2009, 5:49 a.m. EST

Shanghai skids 5.8%, leads Asian markets down again

Commodity prices’ decline, July FDI slump hands China biggest drop of 2009

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Asia PacificChinaAngang Steel Co LtdAluminum Corp China Ltd

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By V. Phani Kumar, Colin Ng & Wei-Zhe Tan

HONG KONG (MarketWatch) — Shanghai stocks dropped 5.8% Monday, suffering their biggest percentage drop so far this year, as lower commodity prices, persistent worries over tightening in bank loans and weak economic data dampened investor sentiment.

Hong Kong shares were also weighted down by the performance as well as a steep fall in U.S. stock futures and commodity prices. In Tokyo, exporters were dragged down by the yen’s strength as risk-averse investors bought the low-yielding currency in search of a perceived safe haven.

“The U.S. fall on Friday helped to reduce the risk appetite for speculators holding Asian assets, said Ben Collett, head of cash equities at TFS Derivatives. He added, “What we’re seeing is guys getting a little risk averse and cutting their losses.”

China’s Shanghai Composite index posted its biggest percentage drop since November and ended at 2,870.63, its first close below 3,000 since the end of June. In Shenzhen, the main stock index dropped 6.6% to 955.87, while Hong Kong’s Hang Seng Index skidded 3.6% to end at 20,137.65, led lower by a slump in China-related stocks.

SHCOMP
Metals stocks were hit hardest, with Angang Steel(ANGGY 94.15, -0.60, -0.63%) and Yunnan Copper dropping by the day’s 10% limit in Shenzhen, while Aluminum Corp. of China(ACH 27.94, -2.20, -7.30%) and Jiangxi Copper (JIXA.Y 81.91, -11.01, -11.85%)dropped by as much in Shanghai. Sentiment was also hurt after Yunnan Copper reported a loss for the first half of the year.

“The large gains in [China markets in] the first half recreated a bubble in the market, so when the government showed signs of tightening bank credit there’s a selloff,” said Zhang Yong, an analyst at Great Wall Securities.

The drop coincided with data showing foreign direct investment into China slumped 35.7% to $5.36 billion in July from the year-earlier period. Foreign direct investment flows for the first seven months of the year were down 20.3% compared with a year earlier, noted Moody’s Economy.com economist Sherman Chan.

“As the central government is determined to achieve the annual growth target of 8%, policymakers may have to step up efforts to boost momentum in coming months,” she wrote in a report.

Regional markets

Japan’s Nikkei Stock Average of 225 companies ended down 3.1%, Australia’s S&P/ASX 200 ended 1.6% lower, South Korea’s Kospi ended down 2.8% and India’s Sensex was 2.4% lower recently. Taiwan’s Taiex ended 2.0% lower, while New Zealand’s NZX 50 lost 2.1%.

Dow Jones Industrial Average (INDU 9,158, -158.10, -1.70%) futures were recently down 138 points in screen trade, adding to the late selling pressure in the region.

In Tokyo, data showing Japan’s second-quarter gross domestic product registered its first quarterly growth in five quarters, did little for the Tokyo markets. GDP grew 0.9% from the quarter before, compared with a 1.0% rise tipped in a Dow Jones Newswires poll of economists.

Royal Bank of Scotland economist Junko Nishioka, however, noted that capital expenditure by Japanese companies dropped for a fifth straight month.

“As corporate free cash flow decreases, we expect capex to continue to contract throughout the year,” said Ms. Nishioka. “Given exports started to slow down in June, especially to China, and household consumption is quite fragile due to the deterioration in the labor market, we believe GDP will slow in Q3 and beyond. In addition, the effect of the economic stimulus packages is likely to gradually diminish.

Obama stresses urgency of health-care reform

Jul 22, 2009, 9:37 p.m. EST

Obama stresses urgency of health-care reform

President uses prime-time news conference to pitch overhaul

By Robert Schroeder, MarketWatch

WASHINGTON (MarketWatch) — President Barack Obama reached

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Health-reform efforts move forward as public engages

Health-reform efforts move forward as public engages

The quest to bring down the cost of a major health-care overhaul dominated this week’s reform efforts in Washington after an early cost estimate of $1.6 trillion last week sent lawmakers on a new urgent mission to scale down the price tag. President Obama also tried to soothe some Americans’ growing nervousness over proposed changes to health care as legislation shapes up that will put his campaign promises to the test.

Will Americans who like their health plans be able to keep them as Obama said? Will families be able to see their annual premiums decline by $2,500 in a few years as promised?

On Monday, President Obama announced that drug companies had agreed to discount the cost of brand-name drugs to the tune of $80 billion for Medicare beneficiaries so fewer of them would fall into the coverage gap known as the doughnut hole. Senior-advocacy group AARP hailed the move, which was contingent on comprehensive health reform. The announcement suggested the Pharmaceutical Research and Manufacturers Association was trying to preempt potentially onerous regulation that may have come about if the group hadn’t voluntarily offered to reduce costs.

Obama also signed a landmark tobacco bill that gives the federal government sweeping new authority to regulate the manufacturing, marketing and advertising of cigarettes and tobacco products. Smoking causes 400,000 Americans to die every year.

In a Tuesday press conference, Obama defended his health plan and pushed back after two insurance industry groups sent a letter to the Senate Health, Education, Labor and Pensions committee urging it to drop the public plan option many Democrats want, which would compete with private insurers in an effort to make them more efficient.

“A government plan option – in any form – is unnecessary to achieve comprehensive reform and would have devastating consequences on the health insurance coverage that employers and individuals currently have, the federal budget deficit and existing provider systems,” said the letter from America’s Health Insurance Plans and the Blue Cross Blue Shield Association.

“If private insurers say that the marketplace provides the best quality health care; if they tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical,” Obama said during the press conference.

On Wednesday, private insurers came under fire after a report from the Senate Commerce Committee found that companies underpaid doctors and hospitals in millions of insurance claims that were for out-of-network care. Insurers also left consumers in the dark on how they calculate “reasonable and customary” charges for such care, the report said. Lack of information has been a major obstacle to encouraging consumers to “shop around” for better prices for health services, a key feature in many conservative lawmakers’ health-care preferences.

In a separate development Wednesday that underscored the financial challenges of the Medicare program, the Departments of Justice and Health and Human Services announced they had indicted 53 doctors, health-care executives and beneficiaries for allegedly submitting more than $50 million in false Medicare claims in Detroit.

On Wednesday night, ABC News broadcast a town hall meeting where President Obama took questions related to his health-reform goals. Topics ranged from concern over whether the government would intervene in costly, sensitive end-of-life treatments to whether a public plan option and health insurance exchange would lead more employers to drop coverage. The public plan option proved surprisingly popular in a poll released last weekend, with 72% of 900 adults saying they supported a government-administered insurance plan that would compete with private insurers for customers, according to a CBS News/New York Times survey. Twenty percent opposed the idea.

Obama also signaled he may be open to taxing the value of employer-sponsored health benefits above a certain threshold, something he opposed during the campaign. The tax exclusion that now exists to make job-based benefits tax-free to workers is a potentially lucrative source of funding that could be used to expand coverage to the 46 million uninsured.

On Thursday, Senate Finance Committee Chairman Max Baucus expressed optimism about the progress of health-reform efforts, saying U.S. senators had found a way to cut the cost of a comprehensive bill to below $1 trillion over 10 years. Read the story. Shares of health-care companies closed higher Thursday on the news.

On Saturday, the Internet-organizing savvy Obama used to such advantage in his campaign is set to go to work on his health-care agenda as volunteers across the country take part in the first National Health Care Day of Service, designed to expose them to a cross section of the medical delivery system.

Extract from marketwatch.com

Daily Market Analysis AMC—–25/06/09

16:30 ET

Mixed Close Follows Deluge of Data

Dow -23.05 at 8299.86, Nasdaq +27.42 at 1792.34, S&P +5.84 at 900.94

[BRIEFING.COM] After starting the day strong, the stock market sold off sharply midday. The major averages climbed higher toward the end of the session, but the Dow still ended modestly lower and the S&P 500 only managed a slight gain.

The Nasdaq was a leader for most of the day following Oracle’s (ORCL 21.26, +1.39) better-than-expected fourth quarter results and upside first quarter earnings per share guidance after the close last night. Other large-cap tech stocks also fared well, including Apple (AAPL 136.22 +2.21), Intel (INTC 16.10 +0.29), and Cisco(CSCO 18.61 +0.04).

After a couple of slow days in terms of noteworthy, material news items, there were a few market-moving events today, including the release of the FOMC policy statement. The major averages were putting in solid gains prior to the release, but the market moved decidedly lower afterwards. While the statement said that the pace of economic contraction is slowing, it also stated that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period of time. The Fed left the fed funds rate unchanged at 0.00% to 0.25%, as expected.

While growth remains the Fed’s policy concern, the wording of the June directive can be characterized as balanced since it provides the Fed the leeway to move as it sees fit based on incoming economic data and changes in the financial markets.

The FOMC also stated that its Treasury purchase program size remains unchanged. That pressured Treasuries and took the benchmark 10-year Note from positive ground to negative ground and pushed its yield up more than 10 basis points to 3.69%.

There was also some key economic data out today. Durable goods orders for May showed a surprise 1.8% increase and durable goods less transportation increased a better-than-expected 1.1%. New orders for durable goods increased 1.8% in May and were up 1.1%, excluding transportation. That was good news from the standpoint that each number easily topped the consensus estimates, which called for a 0.9% decline in total orders and a 0.5% decline, excluding transportation. Shipments, though, were still weak as they declined -2.1% to $169.9 billion.

Shortly thereafter, May new home sales data were released, which showed an annualized rate of 342,000 units, below the 360,000 unit consensus. Given the revisions to the prior month, new home sales were down 0.6% month-over-month versus an expected increase of 2.3%. Stocks initially sold off following the new homes data, but quickly rebounded and resumed their strength.

In terms of leading sectors, materials stocks (+0.8%) were strong today despite considerable weakness fromMonsanto (MON 76.08 -3.22), which reported third quarter results that topped consensus expectations. However, the company typically carries high expectations, and it only reaffirmed its guidance, which may have been viewed as a disappointment to participants.

Energy stocks finished flat as oil and gas refiners (-3.5%) undercut the sector. Drillers (+1.1%) were strong, though.

Looking ahead to tomorrow morning, there are more economic releases that will garner some attention. At 8:30 AM ET, initial claims are scheduled to be released with current expectations at 600,000, and the final first quarter GDP number will be released, expected to remain at -5.7%.

..Nasdaq 100 +1.6%. ..S&P Midcap 400 +1.3%. ..Russell 2000 +1.1%

09:00 ET

Market is Closed

[BRIEFING.COM] S&P futures vs fair value: -5.00. Nasdaq futures vs fair value: -8.00. In overseas trading, European stocks are grappling with selling pressure. That has taken Germany’s DAX down 2.3%. Declining issues outnumber advancers by 4-to-1 in the German bourse. In France, the CAC is down 2.2% amid broad-based weakness. However, BNP Paribas is lending some support. Its recent string of gains has limited its week-to-date loss to just 0.4%, while the CAC has lost more than 3% this week. In Britain, HSBC(HBC) is a primary laggard and is helping to drag the FTSE to a 1.4% loss. Stocks were able to make solid gains in Asia, the MSCI Asia-Pacific Index advanced 1.0%, led by mining and technology stocks. Japan’s Nikkei climbed 2.2%. Exporters like automakers Honda Motor (HMC) and Toyota Motor (TM) got a boost from a weaker yen. Meanwhile, Aozora Bank and Shinsei Bank benefited from news that they pair is in merger talks. In Hong Kong, the Hang Seng closed 2.1% higher. Reports of strong new lending in mainland China continued to drive up mainland property and banking stocks.

08:35 ET

Market is Closed

[BRIEFING.COM] S&P futures vs fair value: -3.70. Nasdaq futures vs fair value: -8.30. The final reading for first quarter GDP came in with a 5.5% annualized decline, which is a slight improvement from the 5.7% annualized decline that was previously reported and also below the 5.7% decline that was widely expected. Personal consumption for the first quarter was revised modestly lower to reflect a 1.4% increase. Initial jobless claims for the week ending June 20 totaled 627,000, which is above the 600,000 claims that were expected. Initial claims in the prior week were revised upward to reflect 612,000 claims. This is the second straight week that initial claims have increased. On a related note, continuing claims crept up to 6.74 million from 6.71 million the previous week. The latest claims total was expected to come in at 6.71 million. Still, continuing claims remain modestly off of their record high, which was reached earlier this month when claims totaled 6.84 million. Stock futures have pulled back a bit in the wake of the data’s release.

08:00 ET

Market is Closed

[BRIEFING.COM] S&P futures vs fair value: +1.80. Nasdaq futures vs fair value: +0.50. The final reading for first quarter GDP is scheduled for release at 8:30 AM ET. The 5.7% annualized decline for the quarter is expected to remain unchanged. Weekly jobless claims data are also due at the bottom of the hour. Later this morning, Fed Chairman Bernanke is scheduled to testify before the a congressional committee regarding the government’s rescue of Bank of America (BAC) and the company’s acquisition of Merrill Lynch (10:00 AM ET). In earnings news, Nike (NKE) announced last night fourth quarter adjusted earnings of $0.99 per share, which is $0.03 better than the consensus of $0.96 per share. However, worldwide futures orders for athletic footwear and apparel, scheduled for delivery from June through November, totaled $7.8 billion, which is 12% lower than orders reported for the same period last year. Shares of NKE are down more than 4% to $50.85 per share in premarket trading. Broader market stock futures are currently flat.

Nike Orders Disappoint

Last Update: 24-Jun-09 17:13 ET

Price level versus 4 pm ET: After starting the day strong, the stock market sold off sharply midday. The major averages climbed higher toward the end of the session, but the Dow still ended modestly lower and the S&P 500 only managed a slight gain.

All ten sectors posted a gain, led by tech (+1.4%) and financials (+1.1%).  The energy (flat) and consumer staples (+0.2%) underperformed on a relative basis.

Futures are nearly unchanged after hours. S&P 500 futures, at 897.80 and Nasdaq 100 futures, at 1446.25, are within a point of fair value.

Reason for Move
Nike (NKE)	50.70 -2.32 (-4.4%)	NKE reports fourth quarter (May) earnings of $0.99 per share, excluding non-recurring items, $0.03 better than the First Call consensus of $0.96. Revenue fell 7.4% year-over-year to $4.71 billion versus the $4.72 billion consensus. The company reported worldwide futures orders for Nike brand athletic footwear and apparel, scheduled for delivery from June 2009 through November 2009, totaling $7.8 billion, 12% lower than orders reported for the same period last year. Excluding currency changes, reported orders would have declined 5%. By region, futures orders for the U.S. were down 4%; EMEA (which includes Europe, the Middle East and Africa) declined 24%; Asia Pacific decreased 5 percent; and the Americas dropped 7%. Excluding currency changes, futures orders would have declined 11% in EMEA, decreased 3% in Asia Pacific and increased 15% in the Americas region.

In economic data, initial unemployment claims for the week ended June 20 and the final first quarter GDP reading are both due at 8:30ET

Four  companies are confirmed to report before the open – ConAgra (CAG), Jackson Hewitt (JTX), Lennar(LEN) and McCormick (MKC).

“cover-up” in BofA deal—24/06/09

Reuters.com story discusses Representative Issa’s comments regarding “cover-up” in BofA deal

Reuters.com reports the top Republican on the House Oversight and Government Reform Committee said on Wednesday that the Federal Reserve sought to hide its extensive involvement in Bank of America Corp’s (BAC) acquisition of Merrill Lynch as Merrill’s financial condition worsened.

“The committee has already learned that Ben Bernanke and the Federal Reserve made inappropriate threats to fire Bank of America management unless they went ahead with the ‘shotgun wedding’ that was the Merrill Lynch acquisition…

The Federal Reserve also engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies,” Representative Darrell Issa said in a statement released to Reuters. The committee has obtained a number of emails and documents from the Fed about its behind-the-scenes role in the merger, which was quickly brokered late in 2008,

according to sources familiar with documents. The Fed, which was wrapping up a two-day meeting on Wednesday, had no immediate comment.

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