YAHOO [BRIEFING.COM]: Stock closed with a 1.1% loss on the day. The
market showed some resilience intraday as the S&P 500 bounced about
0.6% from this morning's low to the afternoon high, but late-day weakness put a
dent in that recovery effort. The S&P 500 is down around 2.6% over the past
four days. As discussed throughout the day, today's decline follows
Friday's disappointing employment data and precedes the Q1 earnings reporting
season, which is expected to show more sluggish earnings growth than recent
years.
As discussed in today's Page One report, expectations are for the S&P 500
in aggregate to post an increase in earnings of only about 3% compared to the
first quarter of 2011. Reports in the end tend to come in above expectations,
but the first quarter gain will undoubtedly be lower than the 14% gain for all
of 2011, or the 9% gain for the fourth quarter of 2011.
Alcoa (AA 9.60, -0.03) kicks off
earnings season with its earnings report tomorrow night, although AA's earnings
should not be viewed as a barometer for the rest of earnings season. More
importantly, we get reports from Google (GOOG 630.84, -1.48) on Thursday afternoon,
followed by JP Morgan (JPM
43.89, -0.45) and Wells
Although there weren't any major earnings announcements today, there were
several pieces of influential corporate news. Molina Healthcare (MOH 25.65, -9.36) fell 27% after the company
was informed it was not selected to participate in the
Shares of Eli Lily (LLY
39.72, -0.76) are down 1.6% despite the company announcing the Food and Drug Administration
has approved Amyvid for use in patients under
evaluation for Alzheimer's and other diseases related to cognitive decline.
Shares of AOL (AOL
26.40, +7.98) are one of the few bright spots, trading up 42% after the company
announced a $1 billion patent deal with Microsoft (MSFT 31.10, -0.42). The deal pays AOL $1.056
billion in cash for more than 800 of its patents and their related
applications. Today's announcement includes the sale of stock of an AOL subsidy
upon which the company expects to see a capital loss for tax purposes.
Finally, it was also reported that Facebook will buy
mobile photo sharing company Instagram, for $1
billion. This initially led to weakness in Shutterfly
(SFLY 28.21, -1.26), due to competitive concerns, but it has since recovered
the majority of its headline-driven decline.
Looking at fixed income, treasuries saw gains for a fourth consecutive session
and have now erased all of their losses following the March 13 FOMC meeting.
Today's buying has dropped the 10-yr yield to a low of 2.019% but closing near
2.037%. Flattening persists along the yield curve with the 2-10-yr spread
tighter at 171.5 basis points.
Crude oil traded in negative territory during pit trade, falling to
a session low of $100.81 per barrel. The energy component then spent the
remainder of floor trade trending higher, but still closed the session with a
0.8% loss at $102.45 per barrel. On the other hand, natural gas chopped around
near the unchanged line during its morning pit session, and ticked higher in
the afternoon to book again of 1.0%, closing at $2.11 per MMBtu.
Gold traded in the black during today’s pit trade while
silver fell to a session low of $31.31 per ounce. The dollar
saw a sharp pullback late in the morning session which
caused precious metals to tick back up towards their highs. Gold
finished pit trade with a gain of 0.9% at $1644.00 per ounce, whereas silver
closed its floor session at $31.51 per ounce, or 0.7% lower. Copper trended
lower during after seeing pressure in electronic trade, closing trade with a
loss of 2.1% at $3.72 per pound.
Finally, volume was relatively light today, with