daytrade diaries sept. 12/13 wk

US stocks close down after strong week

Geoffrey Rogow | September 12, 2009
Article from: The Australian

US closed out their best week in a month slightly down on Friday as traders took profits in Bank of America and Chevron, while Federal Express offset the market decline and paced a basket of other transportation stocks into the green.


Snapping a five-day winning streak, the Dow Jones Industrial Average closed Friday down 22.07 points, or 0.23%, to 9605.41. Notably, Friday's close was within 0.10 points from the close the day before the Sept. 11 terrorist attacks.

On the session, decliners were led by Bank of America, off 25 cents, or 1.5%, to 16.97; JPMorgan, down 52 cents, or 1.2%, at 42.50; and Chevron, which slid 70 cents, or 1%, to 70.75.

For financials, the decline on Friday stemmed from a series of solid gains throughout the week, with traders looking to pare some of those positions into the weekend. Helped by banks, the Dow closed this week up 164.14, or 1.74%.

Chevron was hurt by a 3.7% drop in crude oil prices, though oil snapped a two-week losing streak.

Among other indexes, the Standard & Poor's finished Friday down 1.41, or 0.14%, to 1042.73, ending the week off 26.33, or 2.59%. The Nasdaq Composite lost 3.12 points, or 0.15%, to 2080.90 on Friday, and closed the week down 62.12, or 3.08%. For both indexes, it was the best weekly performance on a point and percent basis since the week ended July 24.

"There continues to be disbelievers, and the pressure has just kept building on those people that are under invested," said David Scott, portfolio manager of the Chase Growth Fund. "Eventually, we will get a correction, but we haven't quite reached that point yet."

For both Friday and the week as a whole, transports were the hottest sector. Leading the move on Friday, FedEx tacked on 4.66, or 6.4%, to 77.32, after the package delivery giant said its fiscal first-quarter earnings will exceed its previous expectations and projected a profit this quarter above analysts' estimates as the company benefits from international improvement and cost controls.

MGM Mirage, up 60 cents, or 5.3%, at 11.84, said all holders who participate in the heavily indebted casino giant's pending debt swap will receive a $50 bonus per $1,000 of notes, not just those who tendered as of Thursday's bonus deadline.

Wynn Resorts received Hong Kong regulatory approval to list its Macau casino operations in the city in a $1 billion initial public offering, according to a report from Dow Jones Newswires. Wynn closed up 2.35, or 3.8%, at 64.50, on Nasdaq.

Cliffs Natural Resources rose 2.13, or 7.6%, to 30.23, after saying it expects its North American iron-ore and coal sales this year to be slightly better than it previously thought as customers increase steel production.

EnCana, the largest natural gas producer in North America, increased 4.34, or 7.9%, to 58.97. The company said it was reviving plans stalled by the credit crunch to split off its oil sands business from its core natural gas holdings.

Weighing on technology stocks, National Semiconductor fell 94 cents, or 5.9%, to 15.03, as its fiscal first-quarter profit dropped 63% and revenue shrank by a third, though the analog-chip maker said demand was rebounding.

Best Buy fell 1.29, or 3.1%, to 39.76, after Oppenheimer said the retailer's second-quarter sales could disappoint Wall Street's forecasts when it reports on Tuesday. Oppenheimer cut its rating on Best Buy to perform from outperform.

Cree lost 1.89, or 5.2%, to 34.83, on Nasdaq. The semiconductor materials maker priced an offering of 11 million shares at a 3.3% discount to Thursday's closing price.

Goldman Sachs raised its rating on Schlumberger to buy from neutral, saying the company is one of the key beneficiaries of the pending inflection point in international spending. The oilfield services company bucked a trend of sliding energy firms and closed up 1.96, or 3.4%, to 60.39.