YAHOO: Stocks finished the
week on a positive note, recovering from the worst two-session drop in more
than 20 years. Despite another round of weak economic and earnings data, buyers
entered the action to bid depressed prices higher.
Nonfarm payrolls declined 240,000
in October, lifting the unemployment rate to a 14-year high of 6.5%. That was
up from 6.1% the month before. The decline in October payrolls marked the 10th
consecutive monthly decline.
Job losses are mounting in the
face of dim business prospects and a gloomy economic outlook. Atlanta Fed
President Lockhart stated that he sees economic weakness at least through the
first half of 2009, and higher unemployment.
Supporting that conclusion, Ford
(F 2.02, +0.04) stated it will layoff an additional 10% of its
salaried workforce. That announcement was paired with another paltry quarterly
performance, in which the company posted a loss and burned through $7.7 billion
in cash. General Motors (GM 4.36, -0.44) also posted ugly
quarterly results, but burned through $6.9 billion during the quarter.
Given the performance, GM is suspending talks with privately held Chrysler to
concentrate on its financial health. Meanwhile, Ford had its credit rating cut
to Caa1 from B3, with a negative outlook at Moody's.
Weak economic conditions are
dampening prospects in several other industries as well. Qualcomm (QCOM
35.66, +2.61) posted better-than-expected earnings per share results for its
latest quarter, but issued downside guidance.
Entertainment and broadcasting
company Walt Disney (DIS 23.36, +0.55) also stated it expects
some challenges in fiscal 2009. Disney missed the consensus earnings per share
estimate when it reported its latest quarterly results.
Elsewhere, Goldman
Sachs (GS 77.78, -2.94) and Morgan Stanley (MS 15.98,
+0.59) had their respective earnings estimates cut by analysts at JPMorgan.
Meanwhile, Wells Fargo
(WFC 29.50, +0.73) spent most of the session lower after it issued an $11
billion capital raise priced at $27 per share, which is a 6% discount to the
prior session's closing price.
The financial sector was an
underperformer for the majority of the session, but late buying interest pulled
the sector up from a loss of 1.3% to finish near its session high, up 2.0%.
Microsoft (MSFT 21.50, +0.62) provided leadership
to the tech sector after it stated that it has no interest in making a bid for Yahoo!
(YHOO 12.20, -1.76). Yahoo stated just yesterday that it is a good fit
for Microsoft and would sell itself for the right price.
Exxon-Mobil (XOM 73.95, +4.39) was a key performer
this session, providing leadership to both the Dow Jones and the S&P 500.
Exxon's gains came as oil prices made a modest 0.5% advance. Crude futures
finished the session near $61.00 per barrel.
Despite the fact much of the
day's troubling news came before the opening bell, stocks still spent the
entire session in the green. A couple of rounds of selling pressure early and
late in the session threatened to undercut the stock market's advance, but a
concerted buying effort helped stocks finish near session highs. Friday's
advance softened the impact of losses earlier in the week; the stock market
slipped 3.9% for the week. Volume was relatively light during Friday's
advance.DJ30 +248.02 NASDAQ +38.70 NQ100 +2.4% R2K +2.0% SP400 +2.5% SP500
+26.11 NASDAQ Adv/Vol/Dec 1698/1.93 bln/1045 NYSE Adv/Vol/Dec 2124/1.26 bln/932