Stocks had a mixed finish on Monday as investors avoided taking chances ahead of this week's Federal Reserve meeting and the mid-term elections. A surprise jump in October manufacturing activities in China and the U.S. gave stocks some initial boost but the rally faded as investors, already concerned about the economic recovery, wondered if the Federal Reserve would launch the treasury buying program sooner than expected.
The Dow Jones industrial average rose modestly after spending much of the session in negative territory. The 30-share average rose 6 points, or 0.06%, to 11124.6. The broader S&P's 500-stock index edged up more than one point, or 0.09%, to 1184.38. The Nasdaq Composite index fell 2.57 points, or 0.1%, to 2504.84. On the New York Stock Exchange,
Reports that the Securities and Exchange Commission had launched an investigation into JP Morgan's JPM selection of assets for a subprime mortgage deal also weighed on investors' minds.
As voters queue up this morning to approve/ disapprove President Obama's policies and have their say on the sluggish economic sluggish recovery, markets are likely to remain range-bound today. However, futures suggest a modestly higher opening as US stocks track their Asian counterparts. According to bets on Intrade, Republicans stand a 94% chance of House control, and many are of the view that the party will end just two seats short of a Senate majority.
Today, the Nikkei 225-stock average and the Hang Seng index in Hong Kong each edged up 0.1%. Manufacturing strength in China sent the Shanghai Composite index up 2.5%. However, action in Europe was somewhat subdued, with the FTSE trading up 0.7%, the CAC up 0.2% and the DAX up 0.2%.
Yesterday, only nine of the DJIA thirty managed gains, led by a 2.6% rise in Intel INTC shares. Macquarie upgraded the shares to "outperform" from "neutral," noting the company's previous revenue expectations were too conservative. Fellow, technology components Hewlett-Packard HPQ and Microsoft MSFT both rose 1.1%.
Pfizer PFE shares added 1.2% after Bernstein increased its rating on the stock to "outperform" from "market perform." Leading on the downside, Kraft KFT and Chevron CVX fell 1.5% and 1.4%, respectively.
Oppenheimer upgraded the energy sector to "market weight" from "underweight," based up earnings growth prospects and stabilizing crude prices, citing both ConocoPhillips COP and Chevron CVX.
Among the S&P500 industry sectors action was mixed, with tech (+0.4%), oil and gas, basic material, health care, and telecommunications sectors, each up 0.3%, industrials (+0.4%) and consumer services (+0.01%) leading the gainers. Leading on the downside: utilities (-0.1%), consumer goods (-0.1%) and financials (-0.1%). Topping the list of gainers, Baker Hughes BHI rallied 4.2% upon reporting earnings for the third quarter topped estimates by 17%.
Today's calendar of macro items is empty, leaving investors free to focus on the larger issues related to today's voting, political gridlock expectations and Bush tax-cut extension hopes. Corporate reporting remains busy, however, with earnings due from BP BP, MasterCard MA, Kellogg K St. Joe JOE and Clorox CLX, and after-the-close numbers from Electronic Arts ERTS.
BP PLC (BP): Free Stock Analysis Report
CLOROX CO (CLX): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
ST JOE CO (JOE): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
KELLOGG CO (K): Free Stock Analysis Report
KRAFT FOODS INC (KFT): Free Stock Analysis Report
MASTERCARD INC (MA): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
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