In the commodities markets, NYMEX crude oil eased $2.37 to $66.94 per barrel as the employment data suggested the economic recovery would be slow, which theoretically could reduce demand for oil. On Wednesday, the Dept. of Energy yesterday said U.S. fuel demand fell 5.8% year-over-year in the four weeks ended June 26. Gold fell $10.20 to $931.10.
The U.S. markets will be closed on Friday, July 3 in observance of Independence Day.
Next week, the bond market will get a flood of supply as the Treasury could sell over $170 billion in bills, notes, bonds, and TIPS [assuming a $35 billion 4-week bill auction], says Action Economics. For the first time ever, the debt managers will conduct 4 coupon/TIPS offerings, says Action Economics. Monday's ISM Non-Manufacturing index highlights the data calendar. The rest of the week is very light until Friday when trade, import and export prices, and consumer sentiment will be released. Other factors that will influence trading are the start of earnings season, and the G8 meeting, says Action Economics.
Among stocks in the news Thursday, the WSJ reported that GM is aiming for an IPO next year. Auto parts maker Lear (LEA) said it is preparing to file for bankruptcy.
Sepracor (SEPR) shares tumbled after the company said it has determined that the preliminary results of a Phase II, 514-patient study evaluating efficacy and safety of SEP-225289 for treatment of Major Depressive Disorder, including patients with melancholic and atypical features, did not meet the primary efficacy endpoint, which was a reduction in symptoms of depression following eight weeks of treatment. S&P and Deutsche Bank downgraded the stock.
Illumina (ILMN) expects second quarter revenue of about $161 million, compared to guidance of $168-$173 million. It cites a shortfall in its array business. Given fourth quarter upside opportunities related to stimulus funding, offset by near-term weakness in the array business, ILMN says it is resetting its 2009 outlook to original range it provided entering the year of $690-$720 million.
Airline stocks lost ground on worries that the weak employment market could lead to consumers cutting back on travel plans. Morgan Stanley downgraded Southwest (LUV) to underweight from equal weight, and lowered Hawaiian Holdings (HA) to equal weight from overweight. But Morgan Stanley also upgraded Continental Airlines (CAL) to overweight from equal weight and resumed coverage on Delta (DAL) with overweight.
There was some M&A news Thursday. Elan (ELN) and Johnson & Johnson (JNJ) announced a definitive agreement whereby JNJ will buy all of ELN's assets and rights related to its Alzheimer's Immunotherapy Program [AIP]. Also, through an affiliate, JNJ will invest $1 billion in ELN in exchange for 18.4% of ELN shares. Upon closing, set for the second quarter 2009, the deal will have an estimated dilutive impact of $0.02 to $0.03 on JNJ's 2009 adjusted EPS.
