This global cue is enough to provide trigger for fall in our market tomorrow. Also as it is trading in overbought zone , it will give sharp decline.
U.S. Stocks Fall on Concern Fed Will Fail to Boost Confidence
March 18 (Bloomberg) -- U.S. stocks fell and the Standard & Poor's 500 Index declined from its highest level in almost a month on concern the Federal Reserve's announcement later today will fail to boost confidence in the economy.
Exxon Mobil Corp. slipped 2 percent as oil retreated from a three-month high after inventories grew more than projected. General Mills Inc., the maker of Cheerios and Hamburger Helper, slid 9.4 percent on earnings that trailed analysts' estimates. Sun Microsystems Inc. soared 80 percent, spurring gains in technology shares, as the computer-server maker entered talks to be acquired by International Business Machines Corp.
The S&P 500 declined 0.5 percent to 774.2 at 12:53 p.m. in New York. Energy shares lost 2.2 percent for the steepest drop among 10 groups. The Dow Jones Industrial Average decreased 82.04 points, or 1.1 percent, to 7,313.66. The Nasdaq Composite Index added 0.2 percent to 1,464.32. About four stocks fell for every three that rose on the New York Stock Exchange.
"Everybody is waiting on the Fed but we've been waiting since January for more information and we may or may not get it today," said Diane Garnick, who helps oversee $500 billion as an investment strategist at Invesco Ltd. in New York. "The bear market rally is over because the economic data continues to get worse. There is no reason for companies to expand their ability to manufacture more goods."
All Eyes on Fed
Fed policy makers will debate how to provide further stimulus to the shrinking economy, from purchasing more mortgage bonds to buying Treasury securities. They'll also keep the benchmark interest rate as low as zero percent, according to all 71 forecasters in a Bloomberg News survey. The Open Market Committee is scheduled to issue its statement around 2:15 p.m.
Stocks advanced yesterday, erasing more than half the loss in the S&P 500 since President Barack Obama took office Jan. 20, as a report showed an unexpected rebound in homebuilding. The benchmark index for U.S. equities has rallied 15 percent from a 12-year low on March 9 after Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. said they were profitable in the first two months of the year.
Exxon Mobil lost $1.44 to $67.65, while Chevron Corp. retreated 79 cents to $64.52. Crude fell as much as 4.6 percent to $46.92 a barrel after an Energy Department report showed gains in U.S. inventories that were bigger than analysts had estimated.
General Mills tumbled 9.4 percent to $48.64 after reporting third-quarter profit fell on costs for ingredients and the negative effects of a stronger dollar. Earnings declined to 79 cents a share excluding gains from an insurance settlement and commodity hedging. Analysts anticipated 87 cents, according to the average of estimates compiled by Bloomberg.
IBM for Sun
IBM slipped 2.6 percent to $90.51, while Sun Micro jumped 80 percent $8.96. IBM is in talks to buy Sun, according to a person familiar with the situation. The purchase would help Armonk, New York-based IBM expand in the market for computer servers, which run Web sites and networks, according to the person, who declined to be identified because the talks are confidential.
Boeing Co. dropped 3.3 percent to $33.32 after International Lease Finance Corp., the largest airplane lessor by fleet value, said manufactures will have to slash production or risk financing jet sales themselves. International Lease Finance, a subsidiary of American International Group Inc., said planemakers will have to reduce output by 35 percent from mid- 2010.
Citigroup Rallies
Citigroup Inc. rallied 17 percent to $2.93 after S&P affirmed its AAA rating on Citi Swapco Inc., which serves as an intermediary for derivatives trades. The shares also gained after the New York Post reported that "observers say" Chief Executive Officer Vikram Pandit may find it harder to keep his job because nominees to the company's board, including former US Bancorp CEO Jerry A. Grundhofer, have experience running banks.
Financial shares gained for a second day. The group rallied yesterday, with Citigroup and JPMorgan rising at least 7.7 percent and the KBW Bank Index extending its gain since March 6 to 46 percent.
MetLife Inc. climbed 9.2 percent to $23.14 after Bank of America raised its recommendation on the biggest U.S. life insurer to "buy," saying in a report "we do not see the need for a large common stock offering."
Lincoln National Corp. fell 4.9 percent to $7.75. The insurer that reported its first loss in six years was cut to "underperform" from "neutral" at Bank of America.
Medicis, MGM
Medicis Pharmaceutical Corp. slumped 14 percent to $9.20. Regulators approved the sale of Teva Pharmaceutical Industries Ltd.'s (TEVA US) generic version of Medicis's acne drug Solodyn.
MGM Mirage fell for a third day, sliding 6.8 percent to $2.83. The casino operator controlled by billionaire Kirk Kerkorian won a two-month reprieve from banks to come up with a debt restructure plan as auditors questioned the company's ability to stay in business.
The MSCI Asia Pacific Index rose for a fourth day, the longest winning streak since the start of the year, as the Bank of Japan said it will buy more bonds from banks to spur lending. Europe's Dow Jones Stoxx 600 Index lost 0.9 percent.
The cost of living in the U.S. rose more than forecast in February, led by gains in fuel, clothing and automobile prices.
The consumer price index rose 0.4 percent after a 0.3 percent increase in January, Labor Department figures showed. Excluding food and fuel, the so-called core rate climbed 0.2 percent for a second month.
To contact the reporter on this story: Cristina Alesci in New York at calesci2@bloomberg.net
U.S. Stocks Fall on Concern Fed Will Fail to Boost Confidence
March 18 (Bloomberg) -- U.S. stocks fell and the Standard & Poor's 500 Index declined from its highest level in almost a month on concern the Federal Reserve's announcement later today will fail to boost confidence in the economy.
Exxon Mobil Corp. slipped 2 percent as oil retreated from a three-month high after inventories grew more than projected. General Mills Inc., the maker of Cheerios and Hamburger Helper, slid 9.4 percent on earnings that trailed analysts' estimates. Sun Microsystems Inc. soared 80 percent, spurring gains in technology shares, as the computer-server maker entered talks to be acquired by International Business Machines Corp.
The S&P 500 declined 0.5 percent to 774.2 at 12:53 p.m. in New York. Energy shares lost 2.2 percent for the steepest drop among 10 groups. The Dow Jones Industrial Average decreased 82.04 points, or 1.1 percent, to 7,313.66. The Nasdaq Composite Index added 0.2 percent to 1,464.32. About four stocks fell for every three that rose on the New York Stock Exchange.
"Everybody is waiting on the Fed but we've been waiting since January for more information and we may or may not get it today," said Diane Garnick, who helps oversee $500 billion as an investment strategist at Invesco Ltd. in New York. "The bear market rally is over because the economic data continues to get worse. There is no reason for companies to expand their ability to manufacture more goods."
All Eyes on Fed
Fed policy makers will debate how to provide further stimulus to the shrinking economy, from purchasing more mortgage bonds to buying Treasury securities. They'll also keep the benchmark interest rate as low as zero percent, according to all 71 forecasters in a Bloomberg News survey. The Open Market Committee is scheduled to issue its statement around 2:15 p.m.
Stocks advanced yesterday, erasing more than half the loss in the S&P 500 since President Barack Obama took office Jan. 20, as a report showed an unexpected rebound in homebuilding. The benchmark index for U.S. equities has rallied 15 percent from a 12-year low on March 9 after Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. said they were profitable in the first two months of the year.
Exxon Mobil lost $1.44 to $67.65, while Chevron Corp. retreated 79 cents to $64.52. Crude fell as much as 4.6 percent to $46.92 a barrel after an Energy Department report showed gains in U.S. inventories that were bigger than analysts had estimated.
General Mills tumbled 9.4 percent to $48.64 after reporting third-quarter profit fell on costs for ingredients and the negative effects of a stronger dollar. Earnings declined to 79 cents a share excluding gains from an insurance settlement and commodity hedging. Analysts anticipated 87 cents, according to the average of estimates compiled by Bloomberg.
IBM for Sun
IBM slipped 2.6 percent to $90.51, while Sun Micro jumped 80 percent $8.96. IBM is in talks to buy Sun, according to a person familiar with the situation. The purchase would help Armonk, New York-based IBM expand in the market for computer servers, which run Web sites and networks, according to the person, who declined to be identified because the talks are confidential.
Boeing Co. dropped 3.3 percent to $33.32 after International Lease Finance Corp., the largest airplane lessor by fleet value, said manufactures will have to slash production or risk financing jet sales themselves. International Lease Finance, a subsidiary of American International Group Inc., said planemakers will have to reduce output by 35 percent from mid- 2010.
Citigroup Rallies
Citigroup Inc. rallied 17 percent to $2.93 after S&P affirmed its AAA rating on Citi Swapco Inc., which serves as an intermediary for derivatives trades. The shares also gained after the New York Post reported that "observers say" Chief Executive Officer Vikram Pandit may find it harder to keep his job because nominees to the company's board, including former US Bancorp CEO Jerry A. Grundhofer, have experience running banks.
Financial shares gained for a second day. The group rallied yesterday, with Citigroup and JPMorgan rising at least 7.7 percent and the KBW Bank Index extending its gain since March 6 to 46 percent.
MetLife Inc. climbed 9.2 percent to $23.14 after Bank of America raised its recommendation on the biggest U.S. life insurer to "buy," saying in a report "we do not see the need for a large common stock offering."
Lincoln National Corp. fell 4.9 percent to $7.75. The insurer that reported its first loss in six years was cut to "underperform" from "neutral" at Bank of America.
Medicis, MGM
Medicis Pharmaceutical Corp. slumped 14 percent to $9.20. Regulators approved the sale of Teva Pharmaceutical Industries Ltd.'s (TEVA US) generic version of Medicis's acne drug Solodyn.
MGM Mirage fell for a third day, sliding 6.8 percent to $2.83. The casino operator controlled by billionaire Kirk Kerkorian won a two-month reprieve from banks to come up with a debt restructure plan as auditors questioned the company's ability to stay in business.
The MSCI Asia Pacific Index rose for a fourth day, the longest winning streak since the start of the year, as the Bank of Japan said it will buy more bonds from banks to spur lending. Europe's Dow Jones Stoxx 600 Index lost 0.9 percent.
The cost of living in the U.S. rose more than forecast in February, led by gains in fuel, clothing and automobile prices.
The consumer price index rose 0.4 percent after a 0.3 percent increase in January, Labor Department figures showed. Excluding food and fuel, the so-called core rate climbed 0.2 percent for a second month.
To contact the reporter on this story: Cristina Alesci in New York at calesci2@bloomberg.net
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