Thursday, May 22, 2008

Oversold rally

Markets are up on an oversold rally. After declining over 400 in 2 days, Dow is up 43, advancers ahead of decliners almost 2-1 & NAZ is up 15. Oil continues to dominate the news as it reached 135 in overseas trading, here it's trading in the 133s. Gas at the pump rose to 3.83 according to AAA. Higher prices are bleeding into the the US economy as well as the rest of the world which imports oil. Ford (F), down 43¢, had risen on an optimistic forecast about returning to profitability, now says they will not break into the black by next year. More such announcements are to be expected.

UBS (UBS) announced a huge rights offering aimed at raising more than $15B. They will sell shares to stockholders via a rights offering priced at a 31% discount to the market. This move to increase equity on the balance sheet follows selling $22B of low grade mortgages to Blackrock for only $15B.

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