Thursday, May 10, 2007

Morning Market Comment

Stock futures are pointing south this morning. Retail sales are a negative factor. Same store sales for April look ugly as an early Easter left consumer's wallets empty in April:

  • Wal Mart Stores (WMT) down 3.5% w/Wal Mart down 4.5%. Sam's up 2.3%. Wal Mart says may will be better with a 1% to 2% gain.
  • Target down 6.1%
  • JC Penney down 4.7%
  • Federated (FD) down 2.2%
  • Abercrombie down 15%
  • Kirkland's down 18.8%
  • Kohl's (KSS) down 10.5%
  • Nordstrom (JWN) up 3.1%
  • Gottschalks down 5.1%
  • Saks (SKS) up 12%
  • Chicos (CHS) down 7.3%
  • Sharper Image (SHRP) down 11%.

But China is going on a shopping spree: Chinese agree to purchase $4.3B in US technology.

After no rate change by the Fed yesterday, ECB: ECB Holds Benchmark Rate at 3.75%, May Signal a June Increase. Bank of England: Bank of England makes quarter-point rate hike.

Latest economic data:
Trade Gap Widens in March
U.S. April import prices rise 1.3% on petroleum
U.S. weekly jobless claims fall 9,000 to 297,000. Not much reax in the bond market to the figures: 10-year Treasury up 1/32 at 98-22/32; yield 4.665%.

Earnings front fairly quiet:
Viacom 1Q Profit Falls 36 Percent
Pacific Ethanol posts Q1 profit - shares up 10%.
Success Eats Away At Whole Foods Market - shares down 11%.

On a world scale, The Baltic Dry Index continues to surge. In other words, world demand for "stuff" remains robust.

But don't get too giddy: Bank of America's Lewis Calls for Lending `Sanity'

Fascinating commentary about Warren Buffett on the Marketwatch site: "WRITING ON THE WALL World will be better when Buffett's gone".

A few analyst comments to note:

  • Citi's Salomon reiterated a Buy on BEA Systems (BEAS) saying a takeover by HPQ makes sense, the Citi says it has no information of an impending deal.
  • Mastercard (MA) upgraded from Sell to Hold citing recent strong Q1 results.
  • Based on valuation Radio Shack downgraded to outperform at First Boston

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