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Mid-Day Update: Stocks Mixed as Consumer Confidence Drop Torpedoes Early Gains

By: MT Newswires
Posted: 12/28/2010 12:17:00 PM
Referenced Stocks: AZN;BKS;CSCO;JNJ;SVA

Here's where markets stand at mid-day:

-NYSE down 1.47 (-0.02%) to 7,919.47

-DJIA down 1.29 (-0.01%) to 11,553.74

-S&P 500 down 0.82 (-0.07%) to 1,256.75

-Nasdaq up 3.20 (+0.12%) to 2,660.84

GLOBAL SENTIMENT

Hang Seng down 0.93%

Nikkei down 0.6%

FTSE up 0.21%

MID-DAY NYSE INDEX WATCH

NYSE Energy up 0.2% at 12,349.76

NYSE Financial down 0.05% at 4,946.18

NYSE Health Care up 0.12% at 6,507.04

NYSE Arca Tech 100 down 0.4% at 1,088.46

UPSIDE MOVERS

(+) MNKD (+3.5%) says FDA needs more time to review Afrezza.

(+) ALU (+1.1%) gaining after SEC detailed bribery settlement late Monday.

(+) SNSS (+9.6%) continues evening gain.

(+) REE (+23%) boosted by report of China cutting rare earth export quotas.

(+) T (+0.2%) adding more WI-FI hot spots.

(+) LOGI (+1.4%) rebounding from early week losses seen on reports GOOG asked co. to stop production of Revue set-top boxes.

(+) GM (+2.3%) gains as several firmes initiate coverage, price targets over $40 set.

(+) SNTS (+9.2%) submits biologics license application to FDA for Rhucin.

DOWNSIDE MOVERS

(-) JSDA (-3.9%) selling shares.

(-) SNIC (-2.4) in movie download pact with Sears and Kmart.

(-) BABY (-0.4) inks new order.

MARKET DIRECTION

Stocks are mixed in mid-day trading after an unexpected drop in confidence among American consumers outweighed the biggest jump in holiday sales in five years, squelching early-session gains. Adding to investors' concern, new data showed home prices declining in October.

The Case-Shiller home price index for October fell 0.8%, while unadjusted prices in the multi-city measure fell 1.3%, the fourth straight monthly decline in single-family home prices at almost double the amount expected by economists.

Meanwhile, the Conference Board said its key U.S. consumer confidence index declined to 52.5 in December on concerns about jobs in the present and future. Economists polled by MarketWatch had expected confidence to rise to 56.9. Confidence for November was revised higher to 54.3 from a prior estimate of 54.1.

In company news:

Johnson & Johnson ( JNJ ) and AstraZeneca ( AZN ) have ceased studies of experimental painkillers due to worries that the drugs could raise the risk of joint damage, Bloomberg reported. The FDA notified J&J last week that development for the drug fulranumab had been put on hold. Meanwhile, AstraZeneca said it had stopped early-stage research on a similar drug.

Cisco Systems ( CSCO ) shares are advancing in the regular session apparently maintaining momentum following positive remarks in Barron's last weekend. Shares are holding near their high for the session, climbing as much as $0.33 to $20.49 each. The financial magazine said CSCO likely is undervalued and should rise at least a third from current levels. Barron's also said investors have priced in "too much skepticism" about Cisco's prospects.

Shares of Barnes & Noble ( BKS ) are lower despite a higher open after a federal judge ruled that a lawsuit against the bookseller over its e-reader can continue. Spring Design in Cupertino, Calif. sued in Nov. 2009, alleging that Barnes & Noble's Nook e-reader is based on misappropriated trade secrets from its Alex e-reader. The company also claims Barnes & Noble violated a nondisclosure agreement.

Shares of Sinovac ( SVA ) are up 2.2% at mid-day, after it said it received approval from the China State Food and Drug Administration (SFDA) to commence clinical trials for its inactivated EV71 vaccine against Hand, Foot and Mouth Disease.

Google (GOOG) shares are lower after Bloomberg reported the Internet search giant is reportedly talking with educational software companies to build a marketplace for online learning programs. Google is reportedly hoping to lure more educational developers with the move.

Shares of Citigroup (C) are fractionally lower following a report that the bank is investigating employees at a branch in north India for allegedly defrauding the bank of INR4 billion ($88.6 million), Indian news station ET Now reported, citing unnamed sources, according to Dow Jones Newswires.

Eastman Kodak (EK) has lost its early upside and is down near 1%, after the company signed a technology license agreement with NEC Corp allowing each company to access the other's patent portfolio. EK said it should net fresh royalty payments from the deal, but did not disclose other financial terms.

Shares of China Petroleum & Chemical Corp. (SNP) opened lower and are down 2% at mid-day, after it received state approval to expand its Yangzi plant in eastern China, Bloomberg reported, citing two refinery officials. The approval comes in order for the refiner to meet local fuel demand. The refiner, also known as Sinopec, is looking to raise the plantâ€â"¢s annual oil processing capacity to 13 million metric tons a year.

American International Group Inc. (AIG) shares have pared earlier gains and are now down just over 1% at mid-day. AIG shares lost prior-session momentum after securing $4.3 billion in new credit lines from commercial banks to replace its funding from the Federal Reserve Bank of New York. AIG's property and casualty insurance subsidiary also signed a one-year, $1.3 billion letter of credit facility.

Also, shares of retailers are mostly lower in regular-session trading despite news that 2010 holiday sales jumped 5.5 percent--the biggest increase in five years. Data from MasterCard Advisors indicated that retail sales rose to $584 billion. In the last holiday season, sales rose 4.1% over the prior year, Bloomberg reports.

Among some large retail names:

--Best Buy (BBY): -0.4%

--Macy's (M): - 0.6%

--Nordstrom (JWN): - 0.4%

--Wal-Mart Stores (WMT): - +0.2%

--Target (TGT): - 0.4%

--Bed Bath & Beyond (BBBY): - 0.6%

--Pier 1 Imports (PIR): - 0.6%

Commodities are higher. February gold contracts are up $22, or 1.62%, to $1,405 an ounce while February crude oil contacts are up 0.26%, or $0.24, at $91.24 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 0.54% to $38.92 and the United States Natural Gas fund (UNG) is up 0.62% to $5.68.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 1.6% to $137.17. Market Vectors Gold Miners (GDX) is up 2.47% to $61.01. iShares Silver Trust (SLV) is up 2.9% to $29.42.