Intraday Market Update
After two prior days of higher opens the S&P 500 futures were under pressure this morning after a mixed bag of US economic data that provided ammo to both bulls and bears. Stocks were under pressure in the wake of larger than expected declines in housing starts and building permits coupled with a cautious outlook by FedEx. However, losses were pared by stronger than anticipated industrial production data, while capacity utilization rose to its highest level since October 2008. The S&P 500 was down -8 points in early trading, testing its 200-day SMA from above that broken yesterday, before paring the losses and briefly peeking its head into positive territory. In early afternoon trading all of the major indexes are teetering between positive and negative territory. Large cap techs, being led by AAPL (+2.35%), is the best performing index as the quad Q's are higher by +0.40%.

In equities, earnings and guidance warnings continue to trickle in. FedEx reported Q4 earnings results that were slightly better than expectations, however, the firm's guidance for next quarter was disappointing and its outlook for their 2011 fiscal year was also weak. Shares of FDX are off -2.60%. Nokia cut its sales outlook for Q2 below prior guidance, citing a more competitive environment particularly in the high-end market. NOK is down -10% and is almost trading at a 10-year low. Scotts Miracle-Gro (SMG) cut its revenue outlook for the year on softening consumer demand which has sent shares down -5%. Fast food chain Sonic (SONC) is down -5.25% after cutting their outlook for the second half of the year, again on weakening consumer conditions. Yesterday it was Best Buy and weak consumer data from the ISCS Goldman Store Sales and Redbook reports. However, the markets are shaking off the bad data.

On the positive side of the ledger, Coca-Cola Enterprises (CCE), which is being acquired by Dow component Coca-Cola (KO), increased its forecast of 2010 profit growth before currency effects, to 10% to 12%. Previous estimates called for 10% growth. The company said that at current exchange rates, currency is expected to have a negative full year impact on earnings of approximately $0.10 per share. And PPG Industries guided above estimates for its Q2 earnings report, citing strong volume growth in emerging markets. Shares of PPG gapped open +4% higher but have since pared the gains and are +1.25% higher.

BP executives are meeting with President Obama after he pledged to make the company pay for its recklessness during last night's address to the nation. BP agreed to tentatively put about $20 billion into a fund to pay for damages resulting from the Gulf oil spill. Reports indicate that claims will be administered by Kenneth Feinberg who is the lawyer that oversaw executive compensation for the government's financial bailout package. Shares of BP pared most of their early losses and are now about breakeven.

In other economic news, the MBA Mortgage Application Composite Index jumped +17.7% last week after dropping -12.2% in the previous week. The increase came after the refinancing component rose +21.1% to the highest level in a year while purchases increased +7.3%, which was the first gain in six weeks. In the prior week the purchase index fell -5.7% to its lowest level since 1997. Refinancing applications rose to 74.8% of overall applications. The average 30-year mortgage rate rose +1 bps to 4.82%.

Despite a larger than expected build in weekly inventories crude oil is gaining. All other commodities are under pressure with natural gas leading the declines, however, the clean burning fuel is holding on to a key support level at $5. The EUR/USD currency pair is hanging on to 1.23 which seems to be keeping equities afloat.

Core Sector List:
Overall reading: 12 sectors advancing, 4 sectors declining
Strongest Sectors: Gold Miners, Semiconductors, Internet
Weakest Sectors: Insurance, Retail, Biotechnology

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