Midday Action: May 9
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May 9, 2008
Financial anchors and continued strength in Black Gold are making less of an impact on bulls during intraday trade to close the week. As of 10:45 ET the SPYder” (SPY) and “Cubes” (QQQQ) are flat to a fractional decliner of .20% on heavier levels of bull and bear activity.
A wider-than-prepped for loss in Dow component American Int’l Group (AIG) and an asset sale to the tune of $400B at peer and fellow Anchor Banker Citigroup (C) kicked off Friday’s early pressured ways. For its part, AIG lost 1.41 per share and 65 cents worse than estimates as mortgage-related investments continued to translate into tax losses for 2008. Related, the S&P ratings agency lowered the company’s credit standing from “AA” to “AA-.” For its part, management at AIG also announced its seeking to raise $12.5B in an effort to bolster its financial position.
Combined, investor concern the worst might not be over for the beleaguered and heavily-weighted financials (XLF) has crept back into the market picture; well, at least for the opening credits of today’s show. That being said, intraday and investors still appear fixated on the potential negatives at AIG as it trades off by 3.15 at 41. However, Citi is acting a bit less @%!$#$. Shares of C are fractionally higher as worries the non-core asset sale could lead to signs of larger problems, loosens its grip on investors.
On the economic side, there’s still no relief at the pump and investor sentiment is picking up on that theme in Friday’s session. Intraday, the US Oil fund (USO) is up 40 cents at 101.06 after scoring fresh all-time-highs of 101.75. A weaker US Dollar and awakening concerns about record prices in front of the summer driving season are the day’s top reasons for moving bulls in Black Gold. And helping move bulls in equities towards a more cautious stance, yesterday’s 2.00% to 2.75% leadership from the energy complex (XLE, OIH), is diverging from the commodity and finding profit-taking par for Friday’s course.
For economic watchdogs seeking officially-sanctioned catalysts, this morning’s trade balance report has been heralded a decent one. A deficit of $58.2B for March is an improvement from February’s $61.7B reading and less than forecasts of $61.3B. According to Briefing, the data will act as a positive for first quarter GDP revisions, as well as potentially impacting the second quarter.
Elsewhere, while the NASDAQ is somewhat surprisingly underperforming its index peers, the tech-heavy market barometer has enjoyed a couple high-profile earnings beats with investors backing up the reports. Gaming software developer Activision (ATVI) is up more than 8% after beating the Street by twelve cents with profits of .17 per share. Revenues blasted views of $369M with actual sales of $602.5M. For its FY09, the company sees earnings of 1.30 versus estimates of 1.18.
While shares of ATVI “game the bears”, the day’s most out-of-this world vaulting act goes to Priceline (PCLN) and home to spokesperson Captain Kirk. The “highly-ranked” internet travel site posted earnings of .76 per share and sixteen cents better than estimates. Sales also trumped views and the company issued FY08 upside guidance above $5.12 consensus views with a range of $5.25 - $5.65. Technically, with shares up 19.19 near 143 and sporting a coveted 99 / 98 ranking per IBD; some home-gamers might be appreciative of the current action being roughly 6% above its proper, but slightly deep, ascending two-and-one half month base buy point of 135.09.
Chris Tyler
Staff Writer & Options Strategist
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