US: Dow, S&P dip; Nasdaq ekes out gain on Dell, Intel

US stocks mostly slipped on Friday after a weak consumer sentiment report offset positive news from bellwethers Dell Inc and Intel Corp.

Support from the two companies, however, let the Nasdaq eke out a tiny gain.

All three major indexes still posted their second weekly advance, although the gains were relatively modest.

With US stocks up about 50 per cent from multi-year lows in March, investors are concerned that the rally may have run its course, and that with many market players taking last-minute vacations, there aren’t enough buyers to push stocks up further.

Consumer sentiment in August slid to a four-month low on worries about high unemployment and personal finances, a Reuters/University of Michigan survey showed, also curbing the market’s appetite for risk.

‘Expectations are higher and any kind of data that doesn’t exceed forecasts with rosy numbers can’t move the market,’ said Alan Lancz, president of Alan B Lancz & Associates in Toledo, Ohio.

‘I think the absence of buyers is triggering traders to sell into the weekend. Next week is basically the last week of the summer, and with more buyers away, there would be fewer catalysts of bull momentum.’

Intel led the Nasdaq’s major gainers and helped the index nudge back into positive territory in late afternoon trading.

Intel’s stock climbed 4 per cent to US$20.25 after the chip maker raised its third-quarter revenue outlook on stronger-than-expected demand for its microprocessors and chipsets.

Dell rose 1.8 per cent to US$15.93 and Marvell Technology gained 5 per cent to US$15.36, after both companies reported second-quarter earnings late on Thursday that beat expectations.

The Dow Jones industrial average declined 36.43 points, or 0.38 per cent, to end at 9,544.20. The Standard & Poor’s 500 Index lost only 2.05 points, or 0.20 per cent, to 1,028.93.

But the Nasdaq Composite Index inched up 1.04 points, or 0.05 per cent, to close at 2,028.77.

For the week, the Dow advanced 0.4 percent, while the S&P 500 gained 0.3 percent and the Nasdaq rose 0.4 percent.

The losses were broad-based, with health-care stocks helping to lead the declines. Merck & Co Inc was down 1.7 per cent at US$32.32. The S&P health care index was off 0.9 per cent.

Among the blue-chip Dow industrials, McDonald’s Corp ranked among the top losers, falling 1 per cent to US$56.07.

A bright spot was provided by Tiffany & Co, which surged 11.3 per cent to US$37.57 in New York Stock Exchange (NYSE) trading after it reported strong second-quarter results and lifted its outlook.

Citigroup rose 3.6 per cent to US$5.23 and the S&P financial index, one of the few sectors among Friday’s advancers, edged up 0.2 per cent.

Troubled financials continued to dominate trading. Shares of the two largest US home funding companies, Fannie Mae and Freddie Mac, gained sharply, extending a trend seen earlier this week. Freddie Mac was up 7.1 per cent at US$2.40 and Fannie Mae gained 6.3 per cent to US$2.04.

The bailed-out insurer American International Group Inc rose 5 per cent to US$50.23, up 53 per cent for the week.

Earlier in the day, the S&P 500 climbed to 1,039.47, its highest intraday level since Oct 14, 2008, before turning negative after the consumer sentiment data.

In other data released on Friday, a report from the Commerce Department showed consumer spending edged up 0.2 per cent in July, largely driven by the government’s ‘cash-for-clunkers’ program, while personal incomes were flat in June.

Volume was light on the NYSE, with 1.19 billion shares changing hands, below last year’s estimated daily average of 1.49 billion.

On the Nasdaq, about 2.36 billion shares traded, slightly above last year’s daily average of 2.28 billion.

Advancing stocks slightly outnumbered declining ones on the NYSE by 1,507 to 1,490.

On the Nasdaq, though, the opposite trend held sway: About 17 stocks fell for every nine that rose. — REUTERS

China finalised regulations for smaller companies seeking listings on the newly formed Nasdaq-style trading board for start-up stocks, the Shenzhen Stock Exchange said.

Listing firms must be capitalised at a minimum 30 million yuan (US$4.39 million), and initial share offerings should account for a minimum of 25 per cent of total shares, the exchange said.

The new rules would be effective from July 1, said the statement, but it was not clear if companies could begin applying for listing from that date.

Recent media reports have said the new board could be launched in October, with about 60 firms - mostly growth-oriented and technology-based - expected to sell new shares in the first batch of listings.

The new enterprise board would allow initial share offerings of companies capitalised at more than 400 million yuan to account for only 10 per cent of total outstanding shares, it said.

The long-awaited enterprise board will be located in Shenzhen, the home of China’s second stock exchange. China has also announced it would resume IPOs on its main board as early as this month, after an eight-month suspension due to market sluggishness.

The statement said companies listing on the board needed to increase the effectiveness of independent board members by allowing them access to relevant information and not intervening in their duties.

The new board hopes to provide China’s small and medium-sized enterprises much needed access to funding via the capital markets.

China also published last month new rules that will rate brokerages by their competitiveness and risk-management capability and use these ratings as a basis for granting business licences and determining the frequency of inspections.

US stocks rose on Thursday as investors returned to financial and technology shares on bets the recent rally could have more room to grow after a brief pullback.
Volume, however, was light, a possible indication of a lack of broad conviction.

Technology gains were led by big-cap tech and semiconductor companies after five straight days of losses for the PHLX Semiconductor index. Apple Inc was among the top boosts on Nasdaq, rising 2.9 per cent to US$122.95, while the PHLX index climbed 3.2 per cent.

The surge in US markets over the past two months has made investors who missed the rally anxious to get back into stocks, analysts said.

‘We’ve had a bit of a correction over the last couple days and people may be going in there and adding a bit, which makes the gains sustainable,’ said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia, Pennsylvania.

Defensive stocks such as consumer staples and healthcare also gave a lift, underscoring some of the lingering worry about the economy following a report that showed a jump in weekly jobless claims.

Coca-Cola Co was among the Dow’s biggest lifts, up 2.9 per cent at US$44.90, and Merck & Co Inc added 1.5 per cent to US$26.05.

The Dow Jones industrial average added 46.43 points, or 0.56 per cent, to 8,331.32. The Standard & Poor’s 500 Index gained 9.15 points, or 1.04 per cent, to 893.07. The Nasdaq Composite Index climbed 25.02 points, or 1.50 per cent, to 1,689.21.

The gains in financials and technology were striking, coming shortly after some analysts said the very same sectors would likely lead the market lower, having underpinned its run-up since March.

Shares of semiconductor companies got a lift after Bank of America-Merrill Lynch raised its rating and price target on shares of Novellus Systems citing cost cutting and attractive valuations. Novellus, which provides equipment to the semiconductor industry, rose 7.1 per cent to US$16.88.

Financial shares gained, including JPMorgan & Chase & Co, up 4.4 per cent to US$35.54, and Bank of America Corp, up 2.7 per cent to US$11.31. Bank stocks have been a large part of the recent rally as investors bet that the sector had seen the worst of the credit crisis.

The S&P 500 is up 32 per cent from the bear market low on March 9, but is down nearly 4 per cent for the week as investors reassessed the economic outlook.

Data showed the number of US workers filing new claims for jobless benefits rose more than expected in the latest week, pushed up by plant shutdowns related to Chrysler’s bankruptcy.

The report came on the heels of Wednesday’s figures showing consumers were still reluctant to spend and reviving worries over the length of the recession after optimism that the downturn was showing signs of abating.

United Technologies Corp was among the Dow’s top boosts, up 1.8 per cent at US$51.51. The world’s largest maker of elevators and air conditioners said order rates had stabilised and it was starting to see early signs of recovery in China.

Wal-Mart Stores Inc reported flat first-quarter earnings in line with analysts’ estimates. Its chief executive said overall business at the world’s largest retailer was stable, adding that until unemployment eased, it remained cautiously optimistic about a timetable for the economic recovery.

Wal-Mart shares were off 1.9 per cent to US$49.10.

Trading was moderate on the New York Stock Exchange (NYSE), with about 1.52 billion shares changing hands, above last year’s estimated daily average of 1.49 billion, while on Nasdaq, about 2.22 billion shares traded, below last year’s daily average of 2.28 billion.

NEW YORK - Stocks steadily climbed back after initially falling in the US overnight, as investors snapped up some of the financial sector’s stronger players and pumped money into the materials and transportation sectors.
Traders dumped Lehman Brothers, but other banks that traded poorly during the day jumped in afternoon trade as punters bet that at least some institutions are in better shape than the troubled merchant bank.
A drop in crude below $US101 a barrel also boosted the market.
The Dow Jones Industrial Average, after dropping 170 points early on, clawed itself back to finish up 164.79 points on the day, or 1.46 per cent to 11,433.71, while the broader Standard & Poor’s 500 lifted 17.01 points, or 1.38 per cent, to 1,249.05.
The NASDAQ rose 29.52 points, or 1.32 per cent, to 2,258.22.

LONDON - European stock markets slumped on Thursday in the wake of heavy falls in Asia, pulled down by sharp losses for banking stocks as the global economic outlook seemingly turned darker.
Fears near to home that the European economy is at risk of recession dampened sentiment, and saw the euro strike a one-year low versus the dollar.
In London, the FTSE 100 index dropped 47.8 points, or 0.89 per cent, to 5,318.4.

FRANKFURT - Germany’s DAX 30 gave up 31.42 points, or 0.51 per cent, to 6,178.9.

PARIS - France’s CAC 40 shed 34.59 points, or 0.81 per cent, to 4,249.07.

TOKYO - Share prices in Japan fell on Thursday after a turnaround plan by Lehman Brothers failed to galvanise markets, sparking fresh worries on the US financial sector.
The Tokyo Stock Exchange’s benchmark Nikkei 225 index dropped 244.13 points, or 1.98 per cent, to close at 12,102.5.

HONG KONG - Hong Kong share prices closed down on Thursday, marking an 18-month low, as investors dumped shares in China firms amid deepening fears of a global economic slowdown.
The benchmark Hang Seng index plunged 611.06 points, or 3.06 per cent, to 19,388.72.

WELLINGTON - New Zealand share prices closed lower on Thursday, dragged down by regional markets after making early gains on the NZ central bank cutting interest rates by 50 basis points.
The benchmark NZX 50 index lost 10.32 points, or 0.31 per cent, to close at 3,333.543.

SYDNEY - Australian markets have received a strong lead from Wall Street equities overnight, which finished almost 1.5 per cent higher. Oil, silver and gold were down, while copper was marginally higher.
At 0757 AEST, the Sydney Futures Exchange’s September Share Price Index contract was 43 points higher, or 0.89 per cent, to 4,878.
In news today, BlueScope Steel chief executive Paul O’Malley addresses the American Chamber of Commerce in Melbourne.
The Warehouse Group releases annual results.
Western Areas NL will hold its annual general meeting.
Style Ltd conducts a general meeting.
In Perth, it’s day three of the three-day Centre for Engineering Leadership and Management conference in Perth.
Yesterday, the benchmark S&P/ASX200 fell 91.2 points, or 1.85 per cent, to 4,814.3, while the broader All Ordinaries shed 89.9 points, or 1.81 per cent, to 4,871.5.

NYMEX

Gasoline prices jumped to unprecedented levels in the wholesale markets on Thursday as Hurricane Ike tore across the Gulf of Mexico, but despite the growing worries, funds continued to liquidate investments in crude, anticipating a slower global economy and stronger US dollar.
Light sweet crude for October delivery fell $US1.71 to settle at $US100.87 a barrel on the New York Mercantile Exchange, after dropping as low as $US100.10 a barrel.
The last time NYMEX crude traded below the $US100 mark was on April 2.
In London, Brent crude on the ICE Futures exchange fell $US1.33 to $US97.64 a barrel.
The wholesale price of gasoline ranged from $US4 to nearly $US5 a gallon on the US Gulf Coast on Thursday. That is up significantly from about $US3 to $US3.30 a gallon on Wednesday.
The market’s renewed storm worries arrived a day after the US Energy Department reported a larger than expected drop in crude and gasoline inventories, and OPEC decided to cut excess production by about half a million barrels a day.
A decision by OPEC on Wednesday to reduce output by 520,000 barrels a day failed to boost oil prices, which have fallen by 30 per cent since reaching a record $US147.27 on July 11.
In other NYMEX trading, heating oil futures rose 1.31 cents to settle at $US2.9155 a gallon.
Natural gas fell 14.5 cents to settle at $US7.248 per 1,000 cubic feet. The EIA said Thursday that natural gas in US storage rose last week.
CME Group, parent of the New York Mercantile Exchange, will open energy trading on the CME Globex and ClearPort platforms earlier than usual Sunday due to the hurricane.

COMEX

Gold fell again overnight, sliding below $US750 an ounce, continuing its longest decline for eight years.
Silver followed suit, to its lowest since June 2006, as precious and other metals continue to lose their lustre as safe havens and inflation hedges.
Gold is now down 28 per cent since March, partly attributable to the $US rising 15 per cent against the euro. The greenback hit an all-time low against the euro in July.
The US currency has hit its strongest level for a year, while concurrently the Reuters/Jefferies CRB Index, which houses 19 commodities, fell to its lowest level since late January.
Gold futures for December delivery fell $US17.00, or 2.2 per cent to $US745.50 an ounce on COMEX.
That was the ninth straight loss, a run not seen since September 2000.
Silver futures for December delivery fell 33.5 cents, or 3.1 per cent to $US10.555 an ounce.
The havoc is being caused by the global slowdown, with countries not needing metals of any description if economies are going into recession.
Meanwhile, a recovering US currency is a better bet than hiding money away in physical gold, particularly as everyone else seems to be selling the soft metal.
Gold hit a record of $US1,033.90 on March 17.
Wheat futures for December delivery rose 0.5 of a cent to $US7.2625 a bushel on the Chicago Board of Trade, mainly on US exports to countries including Japan.
Wheat has dropped 46 per cent from a record $US13.495 on February 27.
Corn fell on the CBOT for the third session straight as world demand for ethanol feed, together with some countries’ possible inability to pay for food, hit both that crop and soybeans.
Corn futures for December delivery fell 3.5 cents, or 0.7 per cent to $US5.3325 a bushel.