U.S. MARKET AVERAGES
The U.S. stock markets have failed to take a definite direction, and have been trading near the flat line with temporary ups and downs and traders being cautious ahead of Friday's third-quarter close. Recently the three major averages have traded mixed after crude-oil reached its lowest level of the day $65.80 per barrel with natural gas trading over $14. The stocks decline throughout the session was attributable to rising oil and the Labor Department report which disclosed some of the impact of Katrina. According to the data the initial jobless claims fell by 79,000 with 60,000 of them related to the devastating storm.
Markets seem to ignore upbeat Commerce Department report, showing GDP growth rate of 3.3%, as the figures relate to periods before Katrina and Rita and do not include their impact on domestic economy.
The Tech sector has been an influential leader to the upside, as gains in semiconductor, hardware and software offset consolidation in the networking group.
The broker/dealer sector is currently up about 1% on corporate news from E-Trade acquiring JP Morgan’s BrownCo unit. The stock is higher 5%.
The gaming sector is down by about 1.4% with
Ameristar Casinos being the worst performer in the group, declining more than 7% on lowered Q3 earnings outlook.
Notable gainers among the stocks are
Red Hat (
RHAT: chart),
Chesapeake Energy (
CHK: chart),
Southwestern Energy(
SWN: chart) and
El Paso (
EP: chart).
The notable losers are
Bank of America (
BAC: chart),
Dollar General (
DG: chart) and
Estee Lauder ((
EL: chart).
Broader stock indicators were lower. The Standard & Poor's 500 index fell 3.58, or 0.29%, to 1,213.31, and the Nasdaq composite index fell 2.75, or 0.13%, to 2,112.65.
Bonds fell, with the yield on the 10-year Treasury note rising to 4.28%from 4.26% late Wednesday.
MOVERS AND SHAKERS
PepsiCo (
PEP: chart) added 2.2% because the company posted a higher-than-expected third-quarter revenue and profit. The soft drink and snack company said its third-quarter profit rose by 18% percent, while its revenue rose to $8.18 billion from $7.26 billion. Total volume of products sold rose 8%.
Ford Motor Co. (
F: chart)was up 1.1%, following a report in The Wall Street Journal that the company will renew its global purchasing process of $90 billion a year by cutting suppliers to less than 1,000 from near 2,500. The company described cost savings as significant, according to the report.
Guidant Corp. (
GDT: chart)dropped 1.8% after The New York Times reported that criminal agents at the Food and Drug Administration will survey the way the company handled problems with heart devices. The company has agreed to be purchased by Johnson&Johnson and the deal will be completed until the end of 2005.
ECONOMIC NEWS
The number of people filing for first-time unemployment benefits dropped in the most recent week, according to government data released Thursday, with the measure coming in below economists' expectations.
The U.S. Labor Department revealed that
initial jobless claims came in at 356,000 for the week ended September 24, down 79,000 from the previous week's revised total. Economists had expected the number of claims to drop, but they had, on average, predicted a more moderate decline to a level around 400,000. In the most recent week, initial claims continued to be inflated by filings from people impacted by Hurricane Katrina.
The U.S. economy saw notable growth in the second quarter, according to a report from the Department of Commerce, although it remains to be seen how much economic growth will be impacted by hurricanes Katrina and Rita.
The Commerce Dept. said that
second quarter GDP grew at an annual rate of 3.3 percent, unchanged from the preliminary estimate but down from the 3.8 percent growth seen in the first quarter. Economists had been expecting second quarter GDP growth of 3.3 percent.
