The Street Remains A Bear
Futures rose pre-open as the July ADP private sector employment reportshowed a gain of 9,000, much better than the expected drop of 60,000.
Not all the economic news was good:
1) The weekly Mortgage Bankers report showed a sharp decline in refinancings, as well as a 7.8 percent drop in purchases. This even though interest rates are at 6.46 percent, not historically high. Tighter lending standards and lower demand is the likely problem.
2) The Street remains bearish. The weekly survey of financial newsletter writers by Investors Intelligence shows only 30 percent bullish, 50 percent bearish, the first time bears were at 50 percent since 1995.
1) Drug make Elandown 38 percent pre-open, and U.S. partner Wyethdown 16 percent, as clinical results on Elan's new Alzheimer's drug has been disappointing. They are, however, moving the drugs to late-stage trials.
We'll have the Elan CEO on at 9:40. (read our Pharma's Market blog as well)
2) Engine maker Cumminsup 8 percent as both top and bottom line were both well above expectations; non-U.S. sales were particularly strong and are now 61 percent of total sales. It wasn't all good news: engine sales for the Chrysler Dodge Ram pickup dropped 60 percent from a year ago; RV engine sales were down 40 percent. Despite this, they are raise their sales forecast to a gain of 15 percent, from a gain of 12 percent.
3) Office Depotcontinues to post weak results, posting a loss as sales in North America declined 6 percent; comp store sales were down 10 percent. The initial weakness in Florida and California has spread to the rest of the country.
4) Corning was in line with expectations; the company said the LCD market was expected to grow at the upper end of the 25 to 30 percent range because LCD product demand has remained strong.
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