Nasdaq hits 3-year high
Strength in Amazon.com boosts the Nasdaq. Boeing and American Express push the Dow to a small loss. Adobe earnings cheer investors. Gold and oil move higher. Interest rates drop.
Updated: 5:27 p.m. ET
If it weren't for American Express (AXP) and Boeing (BA), the Dow Jones industrials ($INDU) might have had a decent day. The rest of the market managed a decent gain.
The Dow closed down 14 points to 11,478, with American Express off 3.4% to $42.50 and Boeing down 2.7% to $63.27.
If American Express and Boeing had been at least flat today, the blue-chip index would have closed at around 11,505. That would have been the Dow's first close above 11,500 since Sept. 8, 2008.
On the first day of a holiday-shortened week, the Standard & Poor's 500 Index ($INX) closed up 3 points to 1,247, and the Nasdaq Composite Index ($COMPX) was up 7 points to 2,650, its best finish since Dec. 31, 2007.
The market will trade normally through Thursday but will close Friday for Christmas.
American Express was lower because of a downgrade from Stifel Nicolaus. Boeing dropped because of worries that the first deliveries of its 787 Dreamliner will be delayed again.
After the close, shares of Adobe Systems (ADBE) were jumping after beating earnings estimates on fiscal-fourth-quarter estimates. Adobe earned 56 cents after one-item items, up 44% from a year ago's 39 cents. Revenue was up 33% to $1.01 billion -- the company quarter of $1 billion in revenue. Shares were up 4.5% after hours to $30.49.
But Darden Restaurants (DRI) shares were off 3.9% to $48.47. The shares had closed up 1.1% to $50.43 in regular trading. Fiscal-second quarter earnings of 54 cents a share were up 26% from a year ago but were only in line with Street estimates. Darden operates the Olive Garden, LongHorn Steakhouse and Red Lobster chains.
Futures trading suggest a flat open for stocks on Tuesday.
Oil and gold move higher
Crude oil for February delivery settled up 21 cents to $88.81 a barrel. Gold settled up $6.90 to $1,386.10.
Cotton settled up 4 cents, or 2.7%, to $1.5412 a pound. Cotton has jumped 99% this year.
Interest rates were up slightly, with the 10-year Treasury yield reaching 3.349% from 3.33% on Friday. The dollar was higher against the euro, the British pound and the Canadian dollar. The U.S. Dollar Index was up 22 cents to $80.972.
The euro slumped to a record low versus the Swiss franc after Moody’s Investors Service downgraded some Irish lenders and debt securities.
|Energy prices -- New York close|
|Mon.||Fri.||Month chg.||YTD chg.|
|(per mil. BTU)|
|(per gallon; AAA)|
Why American Express was hit
The woes for AmEx are a continuation of the market reaction to a Federal Reserve proposal last week to cut the "swipe" fees, or interchange, that merchants pay to accept debit cards by up to 84%.
That will give merchants more incentive to steer consumers away from New York-based AmEx’s higher-cost credit and charge cards, Chris Brendler, a Stifel analyst, wrote in a note to clients today.
"We are increasingly convinced that credit interchange will inevitably be the next target," he wrote. "The now-significant disparity in payments’ costs greatly increases the risk."
Visa (V), the world’s biggest payments network, plunged 17% last week, and No. 2 MasterCard (MA) fell 13%, as the Fed proposed capping debit interchange at 12 cents per transaction.
American Express, which doesn’t issue debit cards, charges retailers who accept its credit and charge cards an average of 2.56% of the purchase price, the lender said in its third-quarter financial supplement.
American Express has been fighting a federal antitrust lawsuit that claims the company’s contracts unfairly prohibit retailers from steering customers to cheaper card brands. Visa and MasterCard agreed to settle the Justice Department complaint in October.
MasterCard closed up 1% to $223.54. Visa was up 1.6% to $67.99.
787 delays weigh on Boeing
Boeing announced this morning that it was boosting its production rate for wide-body 777 to 8.3 a month, or 100 planes a year. The increase won't affect the company's bottom line much.
Shares fell because of investor worries about the continuing 787 delays. A Sunday article in The Seattle Times detailed the problems and tensions building within Boeing.
A top Federal Aviation Administration official 10 days ago warned Boeing that without further proof of the plane's reliability, it won't be certified to fly the long intercontinental routes that airlines expect it to serve.
Forty-seven stocks in the Nasdaq-100 Index ($NDX.X) were higher as well. Amazon.com (AMZN), up 3.2% to $183.29, was the leader on reports of exceptionally strong holiday sales for online merchants. The index finished up 5 points to 2,223.
Netflix (NFLX) was off 1.1% to $178.05 after a debate erupted between CEO Reed Hastings and fund manager Whitney Tilson over whether the stock is overbought. Tilson thinks it is and has shorted the shares. So far, he's taken a big loss. The stock is up 223% this year.
- Chesapeake Energy (CHK), up 8.8% to $25.36, tops among S&P 500 stocks. Investor Carl Icahn boosted his stake in the producer of natural gas to an equivalent of 5.8%, according to a Securities and Exchange filing.
- SLM (SLM), up 6.3% to $12.82, second-best among S&P 500 stocks. The student-loan maker may rise to the “high teens” during the next 18 months and could attract a buyer, Barron’s said over the weekend.
- Chelsea Therapeutics International (CHTP), up 28% to $7.69. The biotechnology company said it plans to accelerate the new drug application for its hypotension treatment, Northera, after meeting with the U.S. Food and Drug Administration.
- Huntington Bancshares (HBAN), up 4.7% to $6.53. The banking company was raised to “buy” from “neutral” at Bank of America Securities.
- American Eagle Outfitters (AEO), off 3% to $14.76. The young-adult clothing retailer was cut to “neutral” from “positive” by Susquehanna Financial Group.
- Franklin Resources (BEN), off 2.5% to $111.70. The manager of the Franklin and Templeton mutual funds was cut to “neutral” from “overweight” by JPMorgan Chase, which cited a decline in sales of fixed income funds.
|Short hits from the markets -- New York close|
|Mon.||Fri.||Month chg.||YTD chg.|
|13-week Treasury bill||0.110%||0.100%||-31.25%||120.00%|
|5-year Treasury note||1.953%||1.953%||33.40%||-27.29%|
|10-year Treasury note||3.349%||3.330%||19.74%||-12.85%|
|30-year Treasury bond||4.462%||4.409%||8.78%||-3.86%|
|U.S. Dollar Index||80.972||80.752||-0.37%||3.52%|
|(in U.S. $)|
|U.S. $ in pounds||£0.643||£0.644||0.14%||4.04%|
|Euro in dollars||$1.316||$1.317||1.30%||-8.17%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.760||€ 0.759||-1.29%||8.90%|
|U.S. $ in yen||83.822||83.970||0.00%||-9.87%|
|U.S. $ in Chinese||6.698||6.652||0.06%||-1.87%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
It is finally time to pay the piper for the decades of entitlement spending and plush pensions in government. One huge issue in the USA the unions and fighting them to change their contracts....they will suck the life out of the states if they can. This entire nanny state situation is global. It will be very interesting to see how governments start extracting themselves from being the free ride....this is the stuff that revolutions are made of. I do not think anyone in Washington has a clue of how to fix this mess and presently they are making it worse, not better.
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[BRIEFING.COM] The headlines generally favored Tuesday being another good day for the stock market. Instead, it was just a mixed day with modest point changes on either side of the unchanged mark for the major indices.
For the most part, the stock market was a sideshow. The main trading events were seen in the commodity and Treasury markets, both of which saw some decent-sized losses within their respective complex.
Dollar strength was at the heart of the weakness in ... More
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