Bulls fought back after a string of losses including early losses on Wednesday drowned the Dow by 100 points. At the end of the day however, 
the index was closed at 10,060.06 or up by 19.61 points. The S&P 500 index ended at a 0.33% gains as it settled at 1,055.33. Nasdaq Composite was also turned positive as it ended at 2,141.54 or up 0.8%. During the early hours, all three were downed by yet another poor housing data. In addition, the durable goods orders for July were also reported increasing less than expected.
the index was closed at 10,060.06 or up by 19.61 points. The S&P 500 index ended at a 0.33% gains as it settled at 1,055.33. Nasdaq Composite was also turned positive as it ended at 2,141.54 or up 0.8%. During the early hours, all three were downed by yet another poor housing data. In addition, the durable goods orders for July were also reported increasing less than expected.July’s sales of new homes plunged 12.4% to 276,000 against 315,000 in June. Consensus was expecting a figure of 339,000. The fingers were pointing at the expiration of government’s tax incentives in addition to slow recovery in the labor markets, which hindered purchasing power.
Meanwhile, US durable goods orders grew slower than expected at 0.3% rate in July, a miss from the consensus number of 2.7% increase. Stripping out the transportation items, th
e orders were actually falling 3.8% in July. June’s orders were revised from a 1.2% decline to a 0.1% rise.
e orders were actually falling 3.8% in July. June’s orders were revised from a 1.2% decline to a 0.1% rise.Both data added to a pool of poor figures and sent the sentiment falling, sending waves of pessimism over the health of the US economy. The impact of the figures also hit the European markets which still struggling with the post-sovereign debt crisis. Only Germany stood out with solid data recently, including the latest IFO index.
IFO index climbed higher to 106.7 in August, beating the
forecast of a slip to 106.0 from July’s 106.2. The current conditions index also rose, up from 106.8 in July to 108.2, also beating the consensus of 107.9. Expectations index fell however, to 105.2 from 105.5. Yet, this figure was slightly better than the expected fall to 104.9. Coupled with recent Germany’s GDP estimate for 2Q10, the data p ainted a bright picture of the Europe’s largest economy. Full-year GDP has been revised up as a result, to 3% from 2% by the Bundesbank.
forecast of a slip to 106.0 from July’s 106.2. The current conditions index also rose, up from 106.8 in July to 108.2, also beating the consensus of 107.9. Expectations index fell however, to 105.2 from 105.5. Yet, this figure was slightly better than the expected fall to 104.9. Coupled with recent Germany’s GDP estimate for 2Q10, the data p ainted a bright picture of the Europe’s largest economy. Full-year GDP has been revised up as a result, to 3% from 2% by the Bundesbank.Apple and Disney are in a negotiation over a deal to offer TV show rentals. The price was said to be at 99c for TV episodes through iTunes. Speculation was also sparked with Apple’s possible new product Mac iTV, an all-in-one TV with 26” touchscreen display, also functioning as a video management console. Apple also kept at BUY 
with the fair value of $335 at Janney Montgomery Scott. Mac’s sales which beat expectations in July were one of the reasons behind the updated rating. Sales of iPad for the FY 2010 (ended September) are expected to reach 7.9 mil lion, up from prior estimate of 7.7 million units. For FY 2011, sales projection was also revised from 17.9 million to 19.4 million. The new iPhone was also expected to sell for 37.2 million units, up from previous estimate of 37 million units. Next FY the iPhone sales are expected to reach 44.8 million, also higher than the prior expectations of 44.5 million units. JMS also saw EPS to be at $14.55 per share for FY 2010, up from previous estimate of $14.49 per share. For FY 2011, EPS estimate was revised up from $16.76 per share to $17.04 per share. Apple settled the day up 1.23% at $242.89, but Disney fell 0.09%.
Another rating update was for Hewlett-Packard as it got rated at NEUTRAL by Wedbush. HP ended down at $38.24.
Amazon’s Kindle has become a top rival for iPad as sales boomed among Amazon’s customers. The new Kindles were to be shipped starting from this Wednesday, two days sooner than earlier expected. Amazon went up 1.86% and settled at $126.85.
AT&T has forged an alliance with Dell for the launch of Aero. The price tag is at $100. Dell also sells its Streak via AT&T at the price of $300 (with a contract) or $550 (with no contract). Dell was up 1.73% while AT&T was up 0.64%.
Starbucks led on the top with 2.37% gains, followed by AMD with 2.34% gains, and Home Depot which settled at $28.33 or 1.98% higher. Limping at the bottom were Adobe Systems with 1.61% losses, Yahoo with a decline of 1.04% and Citigroup which fell 0.81%.
Looking ahead, the next piece of the US economic puzzle will be the jobless claims which will be released this Thursday. Last week, the market was shocked by the figure as it reached 500k mark. The upcoming data has been expected to be around 490k to 495k. Another shock could undo Wednesday’s gains and put a renewed pressure on the stocks.
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