Stocks were generally flat to down on Thursday as investors sift through a flood of news. Last night's merger news between Hewlett-Packard and 3Coms sparked some enthusiasm for technology. Wal-Mart reported earnings this morning. The bond market held a $16 billion auction of 30-year notes. Weekly jobless numbers came in at 502,000 compared to an upwardly revised 514,000 the week before. The U.S. dollar is bouncing again and that's putting pressure on commodities. Gold futures are off almost $10 toward $1,105 an ounce. Crude oil is suffering the most with a 3.1% decline and a drop under $77.00 a barrel. The energy sector is probably the biggest drag on the market today.
Asian markets were lower. China's Premier Wen Jiabao made headlines with a televised speech from Beijing where he said the world's economy was recovering but the journey would be "slow and bumpy". The Chinese Shanghai index closed almost unchanged at -0.07%. The Hong Kong Hang Seng lost 1.0% after hitting new 1-year highs yesterday. The Japanese NIKKEI ended a four-day winning streak with a 0.6% decline.
European markets were generally flat. Stocks erased early morning losses and had climbed to new highs for the year until a late-day reversal trimmed gains. The English market got a boost from a rally in British Airways, which is up on news that a merger with Spain's Iberia airlines is almost a done deal. The FTSE index rose 0.19%. The German DAX lost 0.08%. The French CAC-40 lost 0.17%.
Last night Hewlett-Packard (HPQ) announced a $2.7 billion deal to buy 3Com Corp (COMS). This makes HPQ a direct challenger for Cisco Systems (CSCO) in the networking sector. Many analysts believe this merger puts even more pressure on IBM to make an acquisition. HPQ paid a 39% premium at $7.90 a share for 3Com. Elsewhere in the technology sector the bitter rivalry between Intel (INTC) and Advanced Micro Devices (AMD) appears to be softening. INTC has agreed to pay $1.25 billion to AMD in an effort to settle all outstanding legal disputes between the two companies. Here's an excerpt from their press release:
"Intel Corporation and Advanced Micro Devices today announced a comprehensive agreement to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes.
In a joint statement the two companies commented, "While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development."
Under terms of the agreement, AMD and Intel obtain patent rights from a new 5-year cross license agreement, Intel and AMD will give up any claims of breach from the previous license agreement, and Intel will pay AMD $1.25 billion. Intel has also agreed to abide by a set of business practice provisions. As a result, AMD will drop all pending litigation including the case in U.S. District Court in Delaware and two cases pending in Japan. AMD will also withdraw all of its regulatory complaints worldwide."
Shares of Intel spiked to $20.50 on the news but they're currently down about 10 cents near $19.80. AMD gapped open and is currently trading up 21% near $6.45 a share.
Wal-Mart's earnings report this morning was a headline story. Analysts were expecting a profit of 81 cents a share. The company beat Wall Street's estimates by 3 cents but quarterly revenues came in at $98.67 billion, which was just under expectations. The report was mixed. Same-store sales were disappointing with a 0.5% decline from a year ago. Management expects the crucial fourth quarter to come in flat in a -1% to +1% range. Their view for 2010 has improved and WMT raised its earnings guidance for next year.
In other news Realty Trac said U.S. foreclosure filings came in above 300,000 for the eight month in a row. There were 332,292 default notices filed in October, which is up almost 20% from a year ago but down 3% from September. On a national level one in every 385 households received a foreclosure notice. Nevada, California and Florida were the top three states.
Currently the market is seeing minor profit taking with the S&P 500 struggling with resistance at the 1100 level. The NASDAQ composite is retreating from resistance near 2180. The Russell 2000 is rolling over under resistance near 600 and its 50-dma.
Let's take a quick look at charts for the major averages:
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
A quick glance at the OptionInvestor.com play list doesn't reveal any significant movers today.