Dow is up 22 at 11,253 (less than 300 above its recent low which may have to be revisited), advancers over decliners 3-2 & NAZ is up 10. S&P 500 FINANCIALS INDEX is down 4 to 279, tepid reaction, to say the least, on Lehman (LEH) plans to get its house in order.
Even with a hurricane in the Gulf and OPEC cutting back production, today's big news is all Lehman (LEH). At 8.05, up 26¢ (& slipping as I write), traders are trying to figure out what is really going on at Lehman. The idea is they are selling a majority interest & spinning off real estate assets after reporting a $4B loss. Details are lacking. From an outsider's perspective it looks like amateurs who don't know what they're doing are trying to straighten a ship with a very bad list. However, these amateurs in the past have gotten big bonuses on profits that didn't exist. It would be nice if they recognized enormous mistakes & returned some of the billions in bonuses they collected. Oh well, at least I didn't buy Lehman (i.e. very smart investing).
•Lehman Reports Loss, Plans Auction of Neuberger Stake, Real Estate Spinoff
Hurricane worries continue, as nobody can predict exactly where the storm will go. Oil is up pennies in the 104s after OPEC agreed to cut the production increase approved last year, ½MM barrels per day.
•Hurricane Ike Strengthens as It Enters Gulf of Mexico, Heads Toward Texas
ImClone (IMCL) received another bid for its stock, this one for 70, sending the stock price up 4¾ to 68 and change. This is the same company which got Martha into trouble & as I remember the same 70 price. At other times this kind of buyout news would lift the markets, not today.
The Alerian MLP index rebounded less than 1 after the 10 point fall yesterday, one of the biggest declines in its history. However the MLPs I follow are generally up. They have a good business model and a very low Beta, one measure had it at 0.35. But current market conditions are testing them along with everybody else. Last year, the index suffered an almost 20% sell-off from the 342 peak in late Jul-early Aug. Reasons are unclear, but a good guess is panicky young puppies threw caution into the wind when liquidating positions in hedge funds. Even these low Beta securities are subject to major gyrations.
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