MIDDAY LUNCH

Dow 10217.72  -156.44, Nasdaq 2206.60  -29.10, S&P 1090.67  -14.57 

The markets have been under pressure all day.  The pressure came from concerns over Greece’s debt after S&P said they may lower the country’s debt rating to junk status.  This led to fears about the impact it would have on the Eurozone.  This caused the Euro to fall and the dollar to rise in value. The dollar is currently up +0.2%.

Then we got the jobless numbers, which were much higher then what economist had expected.  Initial claims climbed 22,000 week-over-week to 460,000 and continuing claims were also worse than expected at 4.62 million.

Durable goods orders increased a stronger-than-expected +3.0% in January, but orders less transportation made a surprise -0.6% decline.

Currently 90% of stocks in the S&P 500 are trading down and all the stocks in the Dow are trading with a loss.

On a plus note, Express Scripts (ESRX) 93.98 +6.23, +7.10% is having a great day after the company had a nice earnings report and Oppenheimer raised their target price on the company.

MORNING COFFEE

Coke to Buy Bottler. Coca-Cola (KO) is said it has a deal to buy the bulk of its largest bottler, Coca-Cola Enterprises (CCE). Coke would buy the bottler's North American operations in a deal that could be valued at around $12.9 billion, including debt.

Mr. Toyoda Testifies Before Congress. Toyota (TM) President Akio Toyoda apologized before Congress for his company's safety lapses, but still faced hostile questioning that went on for hours.  The questioning by some was over the top and seemed to be a conflict of interest, since the U.S government owns both GM and a large portion of Chrysler.  

  

Hummer to Close Its Doors.  Chinese regulators blocked the sale of GM's Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery. GM will now wind the brand down over the next several months. Chinese regulators provided limited details on the rejection, but said the deal would have run counter to government efforts to encourage environmentally-friendly energy consumption.

UBS Looks For Tax Settlement.  The Swiss government will turn to the country's Parliament for retroactive approval of a tax settlement reached between the U.S. government and UBS (UBS) after the company illegally sheltered U.S citizens from paying taxes. The government also said it will bill UBS 1 million Swiss francs ($928,000) to cover part of its costs related to the case.

S&P May Downgrade Greece. S&P threatened to downgrade the country’s long-term rating to near-junk status. Greece is also getting ready to issue a 10yr bond next week. Some economists believe that Greece’s problems could cause a domino effect in trouble Spain and that Spain will determine whether the Eurozone stands or falls.

Fortress Investment Group LLC (FIG): Reported Q4 EPS of -$0.58 missing estimates by -$0.64.

Mylan Laboratories (MYL): Reported Q4 EPS of $0.33 beating estimates by +$0.03 on revenue of $1.3 billion.

Express Scripts (ESRX): Reported Q4 EPS of $0.97 Beating estimates by +$0.07 on revenue of $8.2 billion.

Upgrades

Big Lots (BIG): JP Morgan upgraded their rating from Neutral to Overweight and set a target price of $38.00.

Downgrades

Blockbuster (BBI): Janney Montgomery Scott lowered their rating from Neutral to Sell and set a target price of $0.15.

Fifth Third (FTIB): Citigroup lowered their rating from Buy to Hold and set a target price of $13.00.

Gamestop (GME): Piper Jaffray lowered their rating from Overweight to Neutral and lowered their target price from $24.00 to $16.00.

Coverage Reiterated/Price Target Changed

Express Scripts (ESRX): Oppenheimer reiterated their Overweight rating and changed their target price from $94.00 to $123.00.

·         Futures: Dow -0.36% to 10318. S&P -0.45% to 1099. Nasdaq -0.45%. Crude flat at $82.96. Gold -0.26% to $1170.90.

·         Asia: Nikkei -0.9% to 10102. Hang Seng -0.3% to 20400. Shanghai+1.3% to 3061. BSE -0.0% to 16254.

·         Europe: London -0.1% to 5338. Paris -0.3% to 3704. Frankfurt -flat at 5615.

CLOSING BELL

Dow 10374.16   +91.75, Nasdaq 2235.90  +22.46 at 2235.90,S&P 1105.24  +10.64 

With the market coming off of its worst single-session percentage drop in more than two weeks yesterday, the stock market bounced back with stocks near their day highs.

The gain came despite a very poor New Homes report.  Sales of newly built single-family homes unexpectedly fell to a record low in January. The Commerce Department said sales dropped -11.2 percent to a 309,000 unit annual rate, the lowest level since records started in January 1963.

Fed Chairman Bernanke indicated today that the FOMC continues to anticipate a moderate pace of recovery for the economy and that inflation is expected to remain low.  He also said that at some point the Fed will need to begin to tighten monetary conditions to prevent inflationary pressures.

Retailers also had a great day. The sector outperformed for the second straight session with a +2.0% gain.  

Financials also had a good day, the sector gained +1.7%.

Materials stocks struggled in trading, yet commodities managed to move higher in the face of the dollar's gain. The CRB Commodity Index a gained +0.9% today.

Oil was strong finishing +1.3% higher at $79.93 per barrel.  This was despite a larger-than-expected build in weekly crude oil inventories.

MORNING COFFEE

Fed To Testify Today. Fed Chairman Ben Bernanke will appear before Congress today for the first time since his confirmation hearing in January. He's set to testify on monetary policy and the state of the economy. Lawmakers will question what the Fed can, or will, do to ease the unemployment situation, encourage economic recovery and tighten credit when appropriate.

Problem Banks Increase In Number. The FDIC reported problem banks jumped 27% in the fourth quarter to 702, the highest level in over 15 years, while assets held by those banks increased $403 billion. The report implied that lending dropped a substantial -7.5% the largest decline since the 1940s.

Bill To Cut Corp Tax Rate. Two senators jointly introduced a bill yesterday that would reduce the corporate income tax rate to a flat 24% from 35%.  In a statement they said "The United States has the second highest corporate tax rate in the industrialized world. After this law goes into effect, which I certainly hope it will, we will be pretty much competitive with everybody who’s a major player in the corporate world but, certainly, the countries which are our primary competition in Europe and Asia."

Garmin (GRMN): Reported Q4 EPS of $1.43 beating estimates by+$0.48 on revenue of $1.05 billion.

Autodesk (ADSK): Reported Q4 EPS of $0.30 beating estimates by +$0.07 on revenue of $456 million.

Chiquita (CQB): Reported Q4 EPS of -$0.52 missing estimates by -$0.24 on revenue of $879 million.

Toll Brothers (TOL): Reported Q4 EPS of -$0.25 beating estimates by +$0.10 on revenue of $ 326.7 million.

Upgrades

Autodesk (ADSK): Needham raised their rating from Hold to Buy and placed a target price of $31.00.

FPL Group (FLP): Credit Suisse raised their rating from Neutral to Outperform and placed a target price of $56.00.

Coverage Initiated

Viacom (VIA.B): Janney Montgomery Scott initiated coverage with a Buy rating.

Time Warner (TWX): Janney Montgomery Scott initiated coverage with a Buy rating.

Coverage Resumed

Xilinx (XLNX): Stifel Nicolaus resumed coverage with a Hold rating.

Altera (ALTR): Stifel Nicolaus resumed coverage with a Hold rating and a target price of $30.00.

·         Futures: Dow +0.08% to 10307. S&P +0.02% to 1098. Nasdaq +0.21%. Crude 0% to $81.89. Gold -0.26% to $1170.90.

·         Asia: Nikkei -1.5% to 10199. Hang Seng -0.8% to 20468. Shanghai +1.3% to 3022. BSE -0.2% to 16256.

·         Europe: London +0.3% to 5330. Paris flat at 3708. Frankfurt -0.1% to 5601.

CLOSING BELL

Dow 10282.41  -100.97, Nasdaq 2213.44  -28.59, S&P 1094.60  -13.41 

Stocks closed today near day lows in their worst percentage loss in more than two weeks, as the bears sold stocks due to a disappointing consumer confidence reading and a stronger dollar. 

The February Consumer Confidence Index came in well below expectations and hit a 10-month low of 46.0. Broad-based selling followed the release to take each of the three indices back below their 50-day moving average.

Losses were extended today by the dollar’s strength.  The dollar gained +0.5% against other currencies.

Financials were the worst performing sector today, though they had actually traded with relative strength in the early going. They finished with a -1.8% loss.

The materials sector fell -1.7%. Steel was also one of the worst performing groups in the sector after it had been a leader during recent sessions. Steel stocks fell - 4.0% on the belief that a weaker economy would lessen demand.

The CRB Commodity Index dropped -1.6% today. Today’s trading takes the CRB below its 50-day moving average after it had hit a one-month high yesterday.

Advancing Sectors: None

Declining Sectors: Financial -1.8%, Materials -1.7%, Tech -1.4%, Energy -1.5%, Industrials -1.2%, Health Care -1.1%, Telecom -1.0%, Utilities -0.8%, Consumer Discretionary -0.6%, Consumer Staples -0.6%

MIDDAY LUNCH

Dow 10309.55  -73.83, Nasdaq 2210.71  -31.31, S&P 1096.66  -11.35 

All three major indices are trading below their 50-day moving average. The technical line had acted as a floor for the market, but today they broke through that level.

Today’s broad based selling has put the market in line to close with its worst performance in two weeks.

Most of today’s selloff can be attributed to a disappointing Consumer Confidence Index for February.  U.S. consumer confidence fell in February to the lowest in 10 months. The Conference Board said its index of consumer attitudes fell to 46.0 in February from a revised 56.5 in the prior month. February's reading is the lowest since April 2009. Economist had expected a reading of 55.0. This has led many to fear a double dip recession.

Energy stocks are among the worst performers today.  They are currently down -1.2%, collectively.  Lower oil prices haven't helped; crude oil prices were last quoted at $78.75 per barrel down -2.0%.

Tech is the worst performing sector overall.  The sector is currently down -1.3% as large-cap tech issues get hit. Microsoft (MSFT) 28.39 -0.33, -1.18% and Intel (INTC) 20.39 -0.47, -2.26%, and Apple (AAPL) 197.21 – 3.21, -1.60%.

MORNING COFFEE

Toyota Faces Possible Criminal Charges. Toyota (TM) disclosed yesterday that it is the subject of a criminal investigation by federal prosecutors, and the SEC was looking into what statements the company had made to shareholders.

BofA Settlement Completed. Judge Rakoff approved Bank of America's (BAC) $150 million settlement with the SEC, bringing an end to civil charges that the bank misled shareholders when it acquired Merrill Lynch. Judge Rakoff  called the revised settlement "half-baked justice at best" and said that the settlement calls for "very modest" punitive measures "that are neither directed at the specific individuals responsible for the nondisclosures nor appear likely to have more than a very modest impact on corporate practices or victim compensation." The opinion leaves open similar charges by New York Attorney General Andrew Cuomo.

Thermo Fisher Bids For Millipore. Thermo Fisher Scientific (TMO), the world's largest maker of lab instruments, has reportedly bid $6 billion for Millipore (MIL). The offer sent Millipore shares up more than 22%.

Job Bill Approved. A $15 billion jobs bill passed a key procedural vote in the Senate by a margin of 62-30.  This paves the way for a final vote on the stripped-down bill in the next few days.

Market Changes.  Helmerich & Payne (HP) will replace IMS Health (RX) in the S&P 500 after Friday's close. Charles Schwab (SCHW) is moving to the NYSE from the Nasdaq effective March 5.

Home Depot (HD): Reported Q4 EPS of $0.24 beating estimates by +$0.07 on revenue of $14.5 billion.

Medco Health Solutions (MHS): Reported Q4 EPS of $0.76 beating estimates by +$0.01 on revenue of $15.2 billion.

Sears (SHLD): Reported Q4 EPS of $3.69 beating estimates by +$0.05 on revenue of $13.2 billion.

Medtronic (MDT): Reported Q3 EPS of $0.77 beating estimates by +$0.01 on revenue of $3.9 billion.

Economic Calendar for today: ICSC Retail Store Sales, S&P Case-Shiller Home Price Index, and Consumer Confidence.

·         Futures: Dow -0.33% to 10340. S&P -0.34% to 1104. Nasdaq -0.44%. Crude 0% to $82.08. Gold -0.26% to $1170.90.

·         Asia: Nikkei -0.5% to 10352.1. Hang Seng +1.2% to 20623. Shanghai -0.7% to 2983. BSE +0.3% to 16286.

·         Europe: London -0.1% to 5344. Paris -0.5% to 3738. Frankfurt -0.9% to 5640.

MIDDAY LUNCH

Dow 10385.04  -15.64, Nasdaq 2238.81  -4.90, S&P 1106.93  -2.24 

Stocks are continuing to trade in negative territory today.  News that President Obama has proposed a new health care reform plan along with a tax on unearned income and a Hospital Insurance tax for high-income households sent stock lower.

The propose plan gives government authorities the ability to limit rate hikes by health insurance companies. A White House official said regulators will be able to deny unfair premium increases, roll back increases already in effect, and demand a rebate for consumers. 

It is interesting that companies that would be affected and possibly hurt by this are trading higher.  Wellpoint (WLP) 59.64 +1.17, +2.00%, UnitedHeath Group (UNH) 32.95 +1.01, +3.16%, and Humana (HUM) 47.64 +2.29, +5.05%.

Commodities are under pressure today with the CRB Commodity Index down -0.7% to a fresh session low.  Gold is weak today trading down -1.0% to $1,110 per ounce.

This has caused gold mining stocks to fall -1.8% with Newmont Mining (NEM) 47.68 -0.86, -1.77% being the biggest decliner.

Energy continues to trade as the weakest performing sector. It is now down -1.2%.  Schlumberger (SLB) 61.01 -2.88, -4.51% remains a primary laggard in the group. The slide follows news of its stock-for-stock merger with Smith International (SII) 40.68 +2.98, +7.90%.