Daily Market Analysis AMC—22/07/09

Nasdaq Extends Streak of Gains

Dow -34.68 at 8881.26, Nasdaq +10.18 at 1926.38,S&P -0.51 at 954.07

[BRIEFING.COM] The S&P 500 and the Dow both finished modestly lower in mixed trading, but continued strength among large-cap tech helped the Nasdaq successfully log its 11th straight advance.

Apple (AAPL 156.74, +5.23) helped win additional favor for tech issues by posting better-than-expected earnings of $1.35 per share, which is $0.18 better than analysts had come to expect. The company did issue a rather conservative outlook, but Apple has made a habit of that practice and then over delivering.

Better-than-expected earnings headlines from major financial players during recent weeks have many investors looking for earnings of a higher quality and an optimistic outlook. In turn, better-than-expected earnings fromWells Fargo (WFC 24.45, -0.90) were partly overshadowed by news that the company’s revenues fell short of the consensus and net charge-offs increased markedly to almost $4.4 billion.

Commentary from several earnings and conference calls helped garner support for the financial sector and turn a near 2% loss into a respectable gain. However, the rebound proved unsustainable and financials finished with a 0.2% loss.

Health care also finished lower. It shed 0.6% even though Eli Lilly (LLY 33.79, -0.66) and Pfizer (PFE 15.87, +0.17) both posted upside earnings surprises.

More than 150 companies are expected to announce their latest quarterly results between this evening and Thursday’s opening bell.

Energy stocks lagged for the entire session and finished with a 1.0% loss, more than any other sector. Without any major oil companies announcing their latest results, participants generally took their cues from energy contracts. Crude oil futures prices finished 0.4% lower at $65.36 per barrel. Still, that is well above the near 2% loss that oil traded with in early pit trade. A smaller-than-expected draw in weekly inventories seemed to stymie a push into positive territory, though.

Fed Chairman Bernanke testified today before the Senate Banking Committee, but stocks were unaffected by the speech since his comments reflected those previously presented. There weren’t any major economic releases out, but stocks did have a modestly, though briefly sustained, positive reaction to news that home prices made a surprise increase in May. Home prices had slid in each of the two preceding months.

..Nasdaq 100 +0.8%. ..S&P Midcap 400 +0.4%. ..Russell 2000 +0.7%.

eBay Beats Expectations

Price level versus 4 pm ET: The S&P 500 and the Dow both finished modestly lower amid mixed trading, but continued strength among large-cap tech helped the Nasdaq successfully log its eleventh straight advance… Apple (AAPL 156.74, +5.23) helped win additional favor for tech issues by posting better-than-expected earnings of $1.35 per share, which is $0.18 better than analysts had come to expect.

Five of the ten sectors advanced, led by a 1.0% gain in consumer discretionary.  The worst performing sector was energy, down 1.0%.

Futures are flat-to-lower after hours. S&P 500 futures, at 950.50 nearly in-line with fair value and Nasdaq 100 futures, at 1558.00 are below fair value by six points.

Company	Stock Move	Reason for Move
eBay (EBAY)	20.49 +1.04 (+5.4%)	EBAY reports second quarter (Jun) earnings of $0.37 per share, $0.01 better than the First Call consensus of $0.36. Revenue fell 4.5% year-over-year to $2.1 billion versus the $1.99 billion consensus. Company issues mixed guidance for third quarter, sees earnings per share of $0.34-0.36 versus $0.35 consensus; sees third quarter revenue of $2.05-2.15 billion versus $2 billion consensus. The company’s cash and cash equivalents totaled $2.57 billion at June 30, 2009, compared to $3.19 billion at December 31, 2008. The acquisition of Gmarket for $1.21 billion was completed on June 15, 2009. Skype contributed $170.0 million in revenue for the quarter, representing 25% year-over-year growth. Skype added 37.3 million registered users during the quarter and ended the period with more than 480.5 million registered users, Net total payment volume (TPV) for the quarter was $16.71 billion, an increase of 12%. Gross Merchandise Volume rose 2% sequentially to $11.1 billion and Total Users rose to 88.4 million from 88.3 million.
Qualcomm(QCOM)	46.30 -2.15 (-4.4%)	QCOM reports third quarter (Jun) earnings of $0.54 per share, excluding non-recurring items, $0.02 better than the First Call consensus of $0.52. Revenue fell 0.6% year-over-year to $2.74 billion versus the $2.73 billion consensus. Company issues in-line guidance for fourth quarter, sees fourth quarter revenue of $2.55-2.75 billion versus $2.71 billion consensus. Company said, “Despite the global economic uncertainty, we anticipate another strong quarter for our chipset shipments in the fourth fiscal quarter. We believe the CDMA inventory channel has largely stabilized, yet remains near historically low levels consistent with our prior forecast.”
VMWare(VMW)	33.75 +2.50 (+8.0%)	VMW reports second quarter (Jun) earnings of $0.20 per share, $0.01 better than the First Call consensus of $0.19. Revenue were unchanged from the year-ago period at $456 million, versus $452.1 million consensus. Company issues in-line guidance for third quarter, sees third quarter revenue of $465-480 million versus $471.10 million consensus. Company issues in-line guidance for fiscal year 2008, sees fiscal year 2008 revenue up 1-3% year-over-year (roughly $1.90-1.94 billion) versus $1.91 billion consensus.
Sandisk(SNDK)	18.99 +0.19 (+1.0%)	SNDK reports second quarter (Jun) earnings of $0.36 per share, excluding non-recurring items, $0.52 better than the First Call consensus of ($0.16); revenues fell 10.4% year-over-year to $731 million versus the $709.7 million consensus. “We are very pleased with our return to profitability in the second quarter, driven by increased pricing, higher royalty revenue, and strong execution. Our decisive and timely restructuring actions are delivering the intended results… In the second quarter we renewed our patent cross license agreement with Samsung Electronics, providing market certainty. We remain cautiously optimistic about the second half of 2009.”

Earnings will continue to make headlines tomorrow before the open, with 3M (MMM), AT&T (T) Bristol-Myers(BMY), Ford (F), UPS (UPS), Wyeth (WYE), among others, all due to report.

In economic data tomorrow, weekly new unemployment claims is due at 8:30ET, followed by June existing home sales at 10:00ET.

Daily Market Analysis AMC—-8/07/09

Mixed Finish Follows Rebuffed Selling Effort

Dow +14.81 at 8178.41, Nasdaq +1.00 at 1747.17, S&P-1.47 at 879.56

[BRIEFING.COM] News that G8 leaders believe the world economy still faces significant risks didn’t stop stocks from starting the session in higher ground. However,

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Daily Market Analysis AMC—-07/07/09

Broad Selling Effort Sinks Stocks

Dow -161.27 at 8163.60, Nasdaq -41.23 at 1746.17,S&P -17.69 at 881.03

[BRIEFING.COM] After holding above key technical levels midway through the session, the S&P 500 rolled over and violated its 200-day moving average amid broad-based selling pressure. In turn, stocks finished near session lows and the S&P 500 closed below its 200-day moving average for the third time in the past 26 sessions.

The afternoon sell-off was generally an extension of the market’s recent weakness, which became more recognizable following last week’s disappointing jobs report. Buyers are also showing reluctance ahead of earnings season, which unofficially begins when Alcoa (AA 9.41, +0.15) announces its latest results after Wednesday’s closing bell. Alcoa won favor ahead of the report amid reports today that the company is optimistic about demand. The comments came despite persistent macro headwinds.

Concern that economic conditions remain tenuous led President Obama to indicate that a second fiscal stimulus isn’t off the table. However, Dow Jones reported that Senate Majority Leader Reid doesn’t believe there is any case at this stage for another economic stimulus package.

Meanwhile, the government is expected to unveil its Public-Private Investment Plan (PPIP) tomorrow. According to news sources, BlackRock (BLK 162.17, -4.06), which is the largest money manager by assets under management, will be one of the PPIP managers.

Losses were steep and broad-based as all 10 major sectors in the S&P 500 finished lower. Industrials suffered the largest blow by dropping 3.3%.

Energy was a laggard for the entire session and finished 2.5% lower as falling oil prices undercut the sector. Crude oil futures closed 1.8% lower at $62.90 per barrel, which marks the fifth straight decline and the lowest closing price for pit trading in more than one month. Still, crude oil prices are up 40% year-to-date.

Weakness among other commodities caused the CRB Commodity Index to shed 1.5%. The CRB is down nearly 4% so far this week. According to The Wall Street Journal, the U.S. Commodity Futures Trading Commission will hold hearings this summer to consider imposing position limits for commodities of finite supply. That would include oil and natural gas.

Despite succumbing to selling pressure, health care was able to limit its losses. The sector closed roughly 0.3% lower after spending nearly all of the session trading with a gain. The relative strength followed reports that hospitals have agreed to contribute funds toward covering the uninsured in the future. The agreement removes an element of uncertainty from the sector amid ongoing efforts to reform health care.

Large-cap tech issues weighed on the Nasdaq for the second straight session and caused the tech-rich index to underperform its counterparts. Semiconductors failed to provide support and shed 2.9% instead. Their decline came despite analyst upgrades for shares of Marvell Tech (MRVL 11.50, +0.10) and Intel (INTC 16.25, -0.29).

..Nasdaq 100 -2.5%. ..S&P Midcap 400 -2.2%. ..Russell 2000 -2.0%

Price level versus 4 pm ET: After holding above key technical levels midway through the session, the S&P 500 rolled over and violated its 200-day moving average amid broad-based selling pressure. In turn, stocks finished near session lows and the S&P 500 closed below its 200-day moving average for the third time in the past 26 sessions.

All ten sectors fell.  The worst performing areas were industrials (-3.3%), tech (-2.5%), energy (-2.5%) and materials (-2.5%). The defensive-oriented healthcare sector (-0.3%) outperformed on a relative basis.

Futures are flat-to-slightly higher after hours. S&P 500 futures, at 878.00 are within fair value by a point and Nasdaq 100 futures, at 1406.50 are above fair value by about two points

Five companies are confirmed to report earnings tomorrow, with Alcoa (AA) marking the start of earnings report season after the close.

In economic news, the May Consumer Credit report is due at 15:00ET.  In addition, the G8 kicks off its three day summit and the weekly crude inventory report is due at 10:30ET.

Daily Market Analysis AMC—- 03/07/09

16:20 ET

Stocks Sunk Ahead of Holiday Weekend

Dow -218.94 at 8285.12, Nasdaq -49.20 at 1796.52, S&P -26.18 at 897.15

[BRIEFING.COM] A disappointing jobs report prompted sellers to knock stocks sharply lower in the first few minutes of trading. Stocks then locked into an extremely narrow trading range until the S&P 500 slipped below the psychologically significant 900 level in the final half-hour of trading.

Following an uninspiring finish to the previous session, stocks had already been showing weakness ahead of the government’s latest jobs report, which was released shortly before the opening bell. However, sellers became emboldened when the June Nonfarm Payrolls report indicated that 467,000 jobs were lost last month. That marked pickup from the 322,000 jobs that were lost in May, and topped the 365,000 losses that were widely expected.

Meanwhile, the national unemployment rate now stands at 9.5%, which isn’t quite as bad as the 9.6% that was expected, but it still marks a 25-year high. According to Reuters, the White House expects unemployment rate to climb to 10% in next two to three months. Average weekly hours came in at a slightly worse-than-expected 33.0. Since hours often lead payrolls and employers are cutting back hours suggests that hiring remains a long ways off, which will damper consumer spending and hopes of a consumer-led economic recovery.

May factory orders made a surprisingly strong 1.2% increase, which bested the 0.9% increase that had been forecast. The stock market attempted to pare some of its losses following the orders announcement, but the disappointing jobs report dominated headlines and overshadowed the encouraging orders data.

Since U.S. market’s are closed Friday in observance of Independence Day, this session’s decline gave stocks their third straight weekly loss. During that time, stocks have shed more than 5%. This session’s weakness was widespread as declining issues outnumbered advancers by more than 20-to-1 in the S&P 500.

Losses were steepest among energy and financial stocks. They both finished 3.7% lower. Energy was hampered by a 3.7% drop in crude oil prices, which closed at $66.73 per barrel. Crude has fallen for three consecutive sessions. Meanwhile, financials were severely undercut by losses among insurers.

Elan (ELN 7.66, +0.66) was one of the few stocks to post a gain this session. The company garnered support following the announcement that Johnson & Johnson (JNJ 55.97, -1.10) will acquire certain drug assets from Elan and will invest $1 billion in Elan through an affiliate.

In other corporate news, Exelon (EXC 49.03, -2.53) has increased its exchange offer to acquire NRG Energy(NRG 24.59, -1.46) by 12%. The increase was widely expected and neither stock was able to attract buyers amid the session’s broad-based selling effort.

Trading volume was extremely light ahead of the long, holiday weekend. Hardly 700 million shares traded hands on the NYSE in what was the most thinly traded session this year. That’s even after trading had been extended by 15 minutes in order to address system irregularities.

..Nasdaq 100 -2.4%. ..S&P Midcap 400 -3.2%. ..Russell 2000 -3.8%

Weekly Wrap

Last Update: 03-Jul-09 09:08 ET

There was a dearth of corporate news, so market participants turned their attention to economic data during the holiday shortened and thinly traded week.   Two of the most widely watched reports — consumer confidence and the employment situation — failed to live up to expectations, resulting in the stock market losing 2.4% for the week.

All ten sectors  posted a loss, with financials (-4.0%) and materials (-3.2%) coming under the most selling pressure.  Defensive sectors outperformed on a relative basis, with consumer staples shedding 0.1%.  The shortened summer week resulted in light trading volume, with roughly 1 billion shares averaged on the NYSE compared to the 200 day moving average of 1.5 bln.

The national employment situation remains weak.  Nonfarm payrolls fell by 467,000, which was worse than the expected decline of 325,000, and broke the recent trend of smaller payroll declines.  Some market participants anticipated a larger-than-expected decline after the worse-than-expected private payroll report from ADP on Wednesday.  Still, stocks sank 2% following the release of the official government data on Thursday.

Further large payroll declines are expected until weekly new jobless claims drop below 400,000.  On a related note, new jobless claims for the week ended June 27 came in at a very high 614,000.

The unemployment rate rose 0.1% to 9.5%, which was slightly better than the expected  rate of 9.6%.  However, the increase was due to fluctuations in the labor force, and the unemployment rate is likely to increase further over the next several months.

The continued difficulty in obtaining a job was reflected in the latest consumer confidence report.  The Conference Board Consumer Confidence report for June came in at 49.3%, dropping from 54.8% in May and missing the consensus estimate of 55.3%.  The Present Situation Index declined to 24.8% from 29.7% and the Expectations Index dropped to 65.5% from 71.5%.

Consumers remain bearish regarding employment, with those anticipating more jobs in the months ahead falling to 17.4% from 19.3%.

In other economic news, May construction spending missed expectations (-0.9% m/m versus -0.6% consensus), while  June ISM manufacturing (44.8 versus 44.9 consensus) and June Auto Sales (9.7 mln versus 9.8 mln consensus) were nearly in-line with estimates.

In corporate news, General Mills (GIS) rose 5.8% after the company posted better-than-expected earnings, gave an upbeat forecast and raised its dividend.

The second quarter ended Tuesday and recorded the biggest quarterly gain since 1998 for the S&P 500.  Specifically, the S&P 500 gained 15%, the Dow advanced 11% and the Nasdaq climbed 20% in the quarter.  In second quarter commodities action, oil prices surged 41%, gold advanced 0.5%, and the CRB Index rose 14%.  Meanwhile, the dollar index fell 6.2%.

Looking ahead, earnings reports are light next week, but Dow component Alcoa (AA) marks the start of earnings reporting season Wednesday.

Index	Started Week	Ended Week	Change	% Change	YTD %
DJIA	8438.39	8280.74	-157.65	-1.9	-5.6
Nasdaq	1838.22	1796.52	-41.70	-2.3	13.9
S&P 500	918.90	896.52	-22.38	-2.4	-0.7
Russell 2000	513.22	497.36	-15.86	-3.1	-0.4

Daily Market Analysis AMC—01/07/2009

16:25 ET

Early Gains Fade Amid Mixed Data

Dow +57.06 at 8504.06, Nasdaq +10.68 at 1845.72, S&P +4.01 at 923.33

[BRIEFING.COM] Stocks quickly climbed markedly higher in the early going, but gradually pared their gains throughout afternoon trading. Though gains remained broad-based, the steady, downward drift made for a rather unimpressive conclusion to the month’s first session.

The S&P 500 climbed 1.4% to its best level since mid-June following a barrage of economic reports, which didn’t really offer much inspiration to market participants.

The ADP Employment Change report isn’t always a precise indicator of what is in store with the official nonfarm payrolls report, but the ADP report does do a good job of handicapping the government’s figure. So, with the latest ADP report showing a higher-than-expected the 473,000 job losses for June, many believe job losses in tomorrow’s report could exceed the 363,000 that is currently being forecast.

Many economists are worried that continued weakness in labor markets and recent increases in Treasury yields could stymie a recovery in housing. According to the latest data, pending home sales for May increased just 0.1% month-over-month. They were expected to be flat after spiking 7.1% the month before.

Meanwhile, construction spending during May fell 0.9% month-over-month and missed expectations.

The June ISM Manufacturing Index came in at an in-line 44.8, which means manufacturing activity continues to contract since the Index is below 50. The monthly reading was last above 50 in February 2008. However, the pace of contraction continues to slow as the ISM has now increased six consecutive times.

Despite the generally mixed bag of economic reports, stocks were able to log broad-based gains. Consumer staples (+1.7%) were the strongest performers, thanks to General Mills (GIS 58.18, +2.16). Better-than-expected earnings and an upbeat forecast earned shares of GIS their best single-session advance by percent in nearly one month. The consumer staples sector made its best percentage gain in roughly two weeks.

Financial stocks were some of the session’s worst performers. The sector shed 0.5% and finished at session lows as diversified banks (-0.8%) and regional banks (-1.0%) came under pressure.

Energy stocks struggled to remain in positive territory as sellers pressured the sector amid falling oil prices. The energy sector was up more than 2% at its session high, but finished with a modest 0.2% gain. Crude oil prices were also up more than 2% at their session high, but finished 0.8% lower at $69.35 per barrel. The reversal in oil prices came in the face of a larger-than-expected draw in weekly inventories.

Despite weakness in energy-related commodities, precious metals were able to advance amid a weaker U.S. dollar. Amid reports that China would like to debate proposals for a new global reserve currency at next week’s G8 meeting, the Dollar Index dropped 0.6%. That helped gold prices climb 1.5% to $941.30 per ounce. The broader CRB Commodity Index climbed 0.5%.

Participation was lacking again this session as less than 1 billion shares traded hands on the NYSE. That’s the least amount of trading volume in nearly three weeks. Volume is also expected to be light tomorrow since it is the week’s final trading session ahead of the long weekend. U.S. markets will be closed on Friday in observance of Independence Day.

..Nasdaq 100 +0.3%. ..S&P Midcap 400 +1.1%. ..Russell 2000 +1.8%.

ILMN Lowers Guidance

Last Update: 01-Jul-09 17:07 ET

Price level versus 4 pm ET: Stocks quickly climbed markedly higher in the early going, but gradually pared their gains throughout afternoon trading.

Though gains remained broad-based, the steady, downward drift made for a rather unimpressive conclusion to the month’s first session

Eight of the ten sectors advanced, led by consumer staples (+1.7%) and utilities (+1.3%). Financials (-0.5%) underperformed.

Futures are flat after hours. S&P 500 futures, at 919.50 are within fair value by a point and Nasdaq 100 futures, at 1478.75 are down by two points.

Economic data will be the primary focus tomorrow. The June employment and weekly jobless claims reports are due at 8:30ET.  Factory Orders for May will be released at 10:00ET.

Three small-cap companies are confirmed to report earnings before the open tomorrow.

With exception of the economic data, tomorrow may be a slow day as many market participants leave early as they take an extended weekend due to the closure of the market Friday in observance of the Fourth of July.

Daily Market Analysis AMC—-25/06/09

16:25 ET

Buyers Bid Stocks, Treasuries, Commodities Higher

Dow +172.54 at 8472.40, Nasdaq +37.20 at 1829.54, S&P +19.32 at 920.26

[BRIEFING.COM] Stocks managed to reverse modest losses in the first few minutes of trading to spend the rest of the day trading with impressive gains. There was some fleeting selling pressure heading into the close, but the effort was resisted and stocks finished near session highs.

Thanks to strength among retailers, consumer discretionary stocks(+2.9%) led most of the buying in the broader market. Retailers tacked on 3.8% after Bed Bath & Beyond (BBBY 31.08, +2.69) reported better-than-expected first quarter earnings.

Home builder Lennar (LEN 9.19, +1.37) provided leadership to consumer discretionary stocks despite reporting a worse-than-expected quarterly loss.

Meanwhile, Nike (NKE 51.28, -1.74) was a laggard in the group, though it beat quarterly earnings expectations. However, the company indicated that global futures orders dropped 12% from the prior year.

All 10 major sectors in the S&P 500 were able to log gains of 1.0% or more. Financials had lagged for most of the session and even traded with a modest loss early on, but spiked into the close to finish with a 1.7% gain.

Bond markets also saw plenty of buying this session after a $27 billion auction of 7-year Notes saw better-than-expected results. The auction drew a yield of 3.33% and a bid-to-cover ratio of 2.82. Buying at the long-end of the yield curve pushed the benchmark 10-year Note up more than one full point, sending its yield more than 10 basis points lower to just above 3.5%. The 30-year Bond was bid almost two points higher, which dropped its yield 11 basis points to roughly 4.3%.

This session’s broad-based buying also extended into commodities, which helped the CRB Commodity Index climb 1.4%. Energy-based commodities saw particularly strong gains as crude oil prices advanced 2.2% to $70.15 per barrel in pit trading. Natural gas prices settled at $3.84 per contract, up 2.2% after weekly inventory data showed a smaller-than-expected build.

In economic data, initial jobless claims for the week ending June 13 totaled 627,000, which is more than expected and up from the previous week. Continuing claims crept up to 6.74 million. Though that is still off of its record high, it exceeded forecasts.

The final reading for first quarter GDP showed a 5.5% annualized decline, which is a slight improvement from the 5.7% annualized decline that was previously reported. The revision came from a smaller decline in inventories than previously reported, but personal consumption expenditures were revised downward to show a 1.4% increase.

..Nasdaq 100 +2.0%. ..S&P Midcap 400 +2.5%. ..Russell 2000 +2.9%.

Price level versus 4 pm ET: Stocks managed to reverse modest losses in the first few minutes of trading to spend the rest of the day trading with impressive gains.

There was some fleeting selling pressure heading into the close, but the effort was resisted and stocks finished near session highs.

All ten sectors posted a gain, led by consumer discretionary (+2.9%) as retailers rallied 3.8%. The telecom (+1.0%) and financial (+1.7%) sectors underperformed on a relative basis.

Futures are flat-to-slightly lower after hours. S&P 500 futures, at 916.80 are in-line with fair value and Nasdaq 100 futures, at 1473.00 are down by two points

In economic data, the May personal income/spending report is due at 8:30ET, followed by the revised Michigan Sentiment survey for June at 9:55ET.

Three  companies are confirmed to report before the open – Azz (AZZ), Gerber Scientific (BRB) and KB Home(KBH).

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.

Warren Buffett to CNBC: U.S. Economy In “Shambles” .. No Signs of Recovery Yet

Warren Buffett to CNBC: U.S. Economy In “Shambles” .. No Signs of Recovery Yet

In a live interview on CNBC today, Warren Buffett said there has been little progress over the past few months in the “economic war” being fought by the country.  “We haven’t got the economy moving yet.”

While the economy is a “shambles” and likely to stay that way for some time, he remains optimistic there will eventually be a recovery over a period of years.

BECKY:  The last time we sat down to talk to you was on May 4, and at that point you told us that you think we’re in an economic war right now.  How much progress do you think we’ve made in that war?

BUFFETT:  Well, it’s been pretty flat.  I get figures on 70-odd businesses, a lot of them daily.  Everything that I see about the economy is that we’ve had no bounce.  The financial system was really where the crisis was last September and October, and that’s been surmounted and that’s enormously important.   But in terms of the economy coming back, it takes a while.  There were a lot of excesses to be wrung out and that process is still underway and it looks to me like it will be underway for quite a while.  In the (Berkshire Hathaway) annual report I said the economy would be in a shambles this year and probably well beyond.  I’m afraid that’s true.

Buffett also noted that he had a cataract operation on his left eye about a month ago.  He joked that he thought it might help him see “green shoots” for the economy, but so far he hasn’t seen any hopeful signs.

Taking a firm position in an ongoing debate in the financial markets, Buffett says he’s not concerned about deflation, but thinks inflation will be a problem in coming years.

Despite his negative view on the economy, Buffett still believes the stock market is attractive “over the next 10 years” when compared to alternatives like Treasury bonds.

• Slideshow: Top 10 Places the Wealthy Call ‘Home’
• Slideshow: America’s 15 Most Recession-Resistant Cities

Buffett endorsed Ben Bernanke’s reappointment as Federal Reserve Chairman, saying “you couldn’t do better.”  He also praised Treasury Secretary Tim Geithner.

Asked about how Apple handled Steve Jobs’ liver transplant, Buffett said it is a “material fact” when the CEO of a company is facing major surgery.  He thinks criticism of Apple over the matter is appropriate.

Buffett repeated his criticism of “cap and trade” as a method to control pollution, saying it would be a huge, regressive tax.

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