[BRIEFING.COM] Late in the session, the market's major averages breached the tight range that had contained them all day. Relieved that Google's (GOOG 405.00 -27.66) earnings disappointment did not sink Wednesday's market, buyers stepped in and sent eight of the ten economic sectors higher. Strong earnings results from Boeing (BA 71.62 +3.31) supported the market, countered Google's effect, and drove the Dow's outperformance.
Lifted by Boeing, the Industrials sector (+0.8%) led. Honeywell (HON 39.27 +0.85) and Caterpillar (CAT 69.17 +1.27), which also recently delivered strong profit reports, were also influential leaders. Earnings results from those industrial bellwethers underpin our Overweight rating on the sector. Fueled by the biotechnology industry, Healthcare (+0.7%) offered additional leadership. Amgen (AMGN 76.18 +3.29) was the particular bright spot following reports that FDA approval of Roche's competing anemia drug may be delayed until 2009. Largely to the credit of AT&T (T 26.56 +0.61), which was positively featured in the Financial Times today, Telecom jumped 1.1%.
Google's earnings disappointment sat center stage and weighed heavily upon the Technology sector (+0.5%). But as investors acknowledged that the company's earnings miss relative to the consensus estimate was the result of a much higher than expected tax rate, Google shares well pared their losses and lessened the pressure within the sector. A surge in semiconductors was also responsible for the sector's climb and the Nasdaq's clearance of the flat line.
Unexpected rises in January auto sales contributed to afternoon buying efforts. Ford (F 8.68 +0.10), General Motors (GM 24.60 +0.54), and DaimlerChrysler (DCX 58.08 +0.76) each reported gains. Upside earnings from Time Warner (TWX 18.24 +0.71) lent further muscle to the Consumer Discretionary sector (+0.4%). Homebuilders and retailers, however, were offsetting areas. With respect to the latter industry, investors were cautious ahead of the January same-store sales results that will begin to stream in this evening.
Crude's 2.4% drop to $66.31 per barrel underpinned the late-day bias. Although the EIA's inventory report initially had a generally muted effect, traders ultimately focused upon the better than expected builds in crude oil and gasoline supplies. On the flip-side, the data spurred a 1.9% slide in the Energy sector. While that decline weighed heavily, broad-based buying across the rest of the market offset its effect.
On the economic front, The January ISM manufacturing survey fell to 54.8 from 55.6 in December. The read was slightly below expectations, but nonetheless reflects expansion. December construction spending was up a stronger than expected 1.0%. Neither release has had much affect on trade, but the ISM data helped the dollar extend its rise. The market remains focused on Friday's employment data as it, and the data between now and the March 28 FOMC meeting, will help dictate the Fed's next course of action. NYSE Adv/Dec 1796/1458...Nasdaq Adv/Dec 1642/1401
DOW Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)