Mid-Day Summary Via Briefing

Wednesday, April 30, 2008

Mid-Day Summary: Major averages higher, trading nears session highs

All eyes are on the FOMC, whose rate decision and policy statement is due out at 14:15ET. But the stock market was able to rally this morning ahead of the Fed following a slightly better than expected initial reading for first quarter GDP... The major averages opened modestly higher after GDP grew at an annual rate of 0.6% for the quarter, the same rate as in the fourth quarter and better than the 0.5% consensus estimate. After range-trading over the first hour and a half of the session, the major averages broke out around 11:00ET, touching their best levels of the morning between 11:15-11:30ET. Note: Traders paid little attention to this morning's Chicago PMI number, which came in at a slightly better than expected 48.3 (consensus 47.5). But after hitting their morning highs, the major averages have been trending lower into midday, though they remain broadly higher. Expectations are for the Fed to lower rates by 25 basis points to 2.00% and tweak its policy statement to indicate a pause in its aggressive run of rate cuts.Dow is currently +107 to ~12939; Nasdaq is currently +16 to ~2442; S&P is currently +5 to ~1396... A technical vantage point: At mid-session the major indices are all holding firm gains, posting a trend-day up from the opening bell on below average volume thus far. The industrials (INDU) are clearly demonstrating the most strength as the Dow makes a new Apr/three month high @ 12,957 on this last trading day of the month, the only major index to do so. The S&P 500 (SPX) encountered resistance once again surrounding the 1400.00 level, topping out @ 1399 in the morning trading session. Look for an expansion in volume & volatility shortly after the FOMC announcement this afternoon as trading ranges will open up in the indices. Internals firm with the A/D line on NYSE currently standing @ +1.8:1, and +1.5:1 on NASDAQ... The Bond market traded modestly higher in overnight action, and moved on to spike sharply higher at the open.. The 10-yr quickly gave back gains before turning back around to hit a session high for the day around 10:30ET. In recent trading, the 10-yr quickly dropped lower, dipping below the prior day's levels. The 10-yr is currently +02/32 3.810 %... In Commodities, June crude ($113.94 -1.69) traded modestly higher heading into D.O.E data, but those gains quickly diminished as inventories showed a larger than expected build (a build of 3848K vs the consensus build of 900K). It has made lows at $113.32, and is currently just off those lows heading into the afternoon... In Europe, mkts rose, boosted by better U.S. economic data and a raft of bullish co updates, to register their best monthly performance in 4-1/2 years ahead of a key U.S. rate decision. FTSE closed 0.0%; DAX closed +0.9%; CAC closed +0.4%... Note in Asia, the Nikkei closed -0.3%, the Hang Seng closed -0.6% and the Shanghai Composite closed +4.8%... On the Earnings calendar, 93 cos are confirmed to report today after the close including AKAM, CTZ, CEDC, and SBUX. Tomorrow before the open, 109 cos are confirmed to report including BBI, EXPE, XOM and RAIL... On the Economic calendar, today, the FOMC rate decision is scheduled for 14:15ET (expectations are for a 25 basis point cut to 2.00%). Tomorrow before the open, Initial Claims, Personal Income, Personal Spending, and PCE Core Inflation are scheduled to be released around 8:30ET.