By Leslie Wines, MarketWatch
Dec 9, 2005
U.S. stocks forfeited their initial gains to trade at flat to lower levels
Friday morning, with sentiment dented by investor disappointment in
Intel's quarterly update.
The Dow Jones Industrial Average was down 15 points at 10,739.99, hit by
bad news for Intel and Merck and a downgrade of International Business
Machines.
The S&P 500 was down 0.68 points at 1,255.16 and the Nasdaq Composite down
3.65 points at 2,242.81.
The stock market Friday got a brief lift from lower crude and natural gas
futures prices, after the natural gas contract Thursday surged more than
9.5% on worries about weak supplies and unusually cold winter weather.
But the initial strength subsided and the major indices moved lower. .
Analysts are divided as to whether Thursday's losses signal further pain
for stock prices in coming sessions.
Marc Pado, U.S. market strategist at Cantor Fitzgerald. "Being a Friday,
the bulls might find the recent data a little less supportive of an
aggressive bullish opinion heading into the weekend."
"Keep an eye on those support levels," Pado said. "The Dow has already
busted down. If all three indices close below support, it will look like
next week will be under pressure."
The market initially drew a bit of support from news that the University
of Michigan's preliminary consumer sentiment survey for December had a
reading of 88.7. The result was up from 86.1 in November. The MarketWatch
forecast, based on a survey of economists, was for a reading of 85.9.
Separately, the Commerce Department reported that U.S. wholesalers rose
0.2% in October as sales climbed 1.2%. The inventory-to-sales ratio fell
to 1.13 in October from 1.15 in September, marking the latest monthly
decrease.
Economists surveyed by MarketWatch were expecting inventories to expand
further, by 0.5%
The January natural gas contract backed off its recent high, giving stocks
a bit of support. The front-month contract last was down 1.2% at $14.81
per million British thermal units.
Crude futures last were down 26 cents at $60.40.
Gold remained near a 24-year high, with the futures contract last trading
up $3.40 at $526.10. The gold rally is being driven by physical demand and
inflation jitters.
Treasury prices were pressured by the unexpectedly strong consumer
confidence report, giving back some of the gains they registered on
Thursday and sending yields higher. The benchmark 10-year note last was
down 7/32 at 100-2/32 with a yield of 4.493%.
The dollar recovered a bit from the rout it suffered Thursday in the wake
of hawkish rhetoric from Bank of Japan and European Central Bank
officials. The dollar last was up 0.3% at 120.51 yen as the euro dropped
0.01% to $1.1805.
Stocks in play
Intel shares last were down almost 1% at $25.47. Late Thursday the world's
largest maker of computer chips lowered the top end of its sales forecast
for the fourth quarter, but left the midpoint unchanged. Investors had
hoped for a higher top and middle range points.
Shares of Merck dropped 2.4% to $28.99. The New England Journal of
Medicine is accusing the authors of a Merck-sponsored study on the safety
of painkiller Vioxx of omitting certain negative data about the drug when
they published an article on the results in 2000.
IBM lost 70 cents to stand at $86.80 after UBS downgraded the stock to
neutral.
Eli Lilly rose 4.3% to $54.45 after the drug maker said that, after
eliminating charges, it expects fourth-quarter and full-year 2005 adjusted
earnings to be at the top of its guidance ranges.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
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p.m.). The information herein is believed to be true and accurate. We
take no responsibility for inaccurate information and reserve the right to
update our reports. If you have any questions please e-mail James Sang at
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SOURCE Thomson Financial Corporate Group
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