Late Day Comments Help "Lower" Markets
There was a broad rally today....four to one advancing to declining stocks, but late-day comments from Federal Express, which lowered its 2009 earnings guidance, as well as negative comments from Con-Way in the trucking space, and Texas Instruments, National Semi, and Altera in the techs are weighing on futures after the close.
1) FedEx lowered guidance for the current (second) quarter, and guided lower for the full year (to $3.50-4.75 vs. prior $4.75-5.25). What would their guidance have been had oil been at $100 a barrel?
2) Trucker Con-Way guided full year earnings lower as well, to $2.20-$2.35 vs. $2.60-$2.80. They have reduced their workforce by 8 percent.
3) Texas Instruments guided revenue for the current quarter lower ($2.30-$2.50 billion vs. prior $2.83 to $3.07 billion)
4) National Semi said revenue would be down 30 percent in the following quarter (hurt by lower handset demand)
5) Chip maker Altera also said sales would be down 9 to 12 percent compared to the current quarter; they are seeing slower than expected sales across all market segments--they sell to the computing, telecom, industrial and automotive industries
On the markets, the big question today was, how big will the infrastructure part of the stimulus package be? President-elect Obama made a point of saying it would be big, but how big? Some analysts said it could be as big as $130 billion.
That stimulated buying in engineering and construction stocks like Fluor. These stocks have been rallying for a couple weeks. More importantly, commodity stocks and oil service stocks--which have not rallied--staged a terrific move up today, with many up double digits.
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