Dow sold off big, down 504 to close at 10917, below the July 15 low. S&P 500 was down 59 to 1192. Can you spell "uh-oh?" 1200 was a critical support line which gave way with selling at the close. All 30 Dow stocks declined, led by American International Group (AIG), Bank of America (BAC), Citigroup (C) & General Motors (GM). Decliners were ahead of advancers 15-1. NYSE volume was 1.9B, very good but short of exceptional. For the bulls, this was supposed to show climactic selling aimed at washing out all the sellers. This volume level does not tell us that story! The very large volume for AIG, now a low priced stock even though it's in the Dow, contributed to the high volume. This was one of those days when it's hard to find a winner. The Yahoo finance badge on the right shows all red!
S&P 500 FINANCIALS INDEX is down 29 to 253 below the post July 15 low of 267 as financials got hammered. This has to be one their largest declines in its history. The next test for the index is the July 15 low of 232. AIG closed at 4.76 on a volume over 737MM shares leading the way down. Bank of America was down 7 (20%) on 273MM shares. Confusion and chaos carried the day as stocks plunged on confusion & chaos, especially for financials!!
Oil was down 5½ to the 95s, first close below 100 in 7 months. Following oil down was the Alerian MLP index (shown on the right) down 13 (one of its biggest daily declines in history) to 236, back to price levels 3 years ago.
What's there to say? Words fail on a day like today. Most Asian markets were closed yesterday for a holiday. The Australian market was open, suffering a big decline. Tonight Asian markets are expected to continue selling off with this very negative tone.
With the FED meeting approaching, a rate cut of 25 points is widely expected (that's called spinning on a dime). However, financials need a lot more than a rate cut. After a day like today, it may seem like the world is coming to an end. Not so!! But we are in very tough times where new rules for financial markets have to be made up on the fly! This is time for research to prepare for buying opportunities as securities sell off to attractive values. Dividends and yields are important to me, helping me get through these tough times.
Showing posts with label American International Group. Show all posts
Showing posts with label American International Group. Show all posts
Monday, September 15, 2008
One ugly day for financials
Last night, Bloomberg.Asia TV was all about Lehman going under & Merrilll Lynch being bought out. All kinds of experts gave lots of opinions, but they are just guesses. New rules are being written which will change markets & nobody knows how this will play out. Very scary!
Pre-trading Dow was down 300 overnight. This morning in pre-markets, Dow was down about 350 & S&P was down over over 40. Maybe that's not so bad given all the confusion in the markets. After the initial plunge, there has been some recovery (as noted on my widget from Bigcharts on the right). Indices have halved their losses, but Dow is still down 270 as the recovery suffered a setback. Decliners are over advancers 7-1, one rough market. The S&P 500 FINANCIALS INDEX is down 14 to 284, near the morning lows. A big drag is Bank of America down 5 on the Merrill Lynch buyout.
From Bloomberg, here are a ton of articles, this is a very bad day for news, all grim:
•Lehman Files for Record Bankruptcy, Victim of Meltdown Firm Helped Create
•Stocks in U.S. Drop as Lehman Bankruptcy Deepens Turmoil in Credit Markets
•AIG Slumps After Insurer Rejects Buyout Offers, Seeks $40 Billion Fed Loan
•Bank of America Will Buy Merrill for $50 Billion as Credit Crisis Broadens
•Oil, Gasoline Tumble as Lehman Fails, Hurricane Ike Spares U.S. Refineries
•Pimco, Vanguard, Franklin Are Biggest Bond Fund Losers in Lehman Collapse
•Emerging-Market `Panic' Masks Record Profits, May End With 20% Stock Rally
•Houston Struggles to Recover From Hurricane Ike as Midwest Hit by Flooding
The financials continue in center stage as Lehman is history & Merrill Lynch is being bought out by Bank of America (BAC). American International Group (AIG), Dow stock, is officially shaky as its stock plunged into the 6s. They used to be the largest insurance company in the world. Insurance companies own stocks, chances are they may be selling a lot to raise cash. Washington Mutual (WM) is also shaky, heading back down to the low 2's.
Oil is getting clobbered (down 4 to 97 after falling to 95) despite the infrastructure damage in east Texas. Prices at the pumps around the country are spiking up on ugly thoughts about their supplies. That's a punch the economy does not need. The Alerian MLP index, in sympathy to lower oil prices, sold off 5 remaining near levels last seen 3 years ago.
The S&P 500 at 1225, is holding above 1200, a key support level (the July 15 low). If that floor does not hold, look out below! At the FED meeting this week, all of a sudden it is now assumed that they will cut rates again. That's a short term reaction, but may haunt the economy in the longer term. Amidst the chaos, it is best to try to stay cool. Use these trying times to prepare for buying opportunities in oversold stocks.
Pre-trading Dow was down 300 overnight. This morning in pre-markets, Dow was down about 350 & S&P was down over over 40. Maybe that's not so bad given all the confusion in the markets. After the initial plunge, there has been some recovery (as noted on my widget from Bigcharts on the right). Indices have halved their losses, but Dow is still down 270 as the recovery suffered a setback. Decliners are over advancers 7-1, one rough market. The S&P 500 FINANCIALS INDEX is down 14 to 284, near the morning lows. A big drag is Bank of America down 5 on the Merrill Lynch buyout.
From Bloomberg, here are a ton of articles, this is a very bad day for news, all grim:
•Lehman Files for Record Bankruptcy, Victim of Meltdown Firm Helped Create
•Stocks in U.S. Drop as Lehman Bankruptcy Deepens Turmoil in Credit Markets
•AIG Slumps After Insurer Rejects Buyout Offers, Seeks $40 Billion Fed Loan
•Bank of America Will Buy Merrill for $50 Billion as Credit Crisis Broadens
•Oil, Gasoline Tumble as Lehman Fails, Hurricane Ike Spares U.S. Refineries
•Pimco, Vanguard, Franklin Are Biggest Bond Fund Losers in Lehman Collapse
•Emerging-Market `Panic' Masks Record Profits, May End With 20% Stock Rally
•Houston Struggles to Recover From Hurricane Ike as Midwest Hit by Flooding
The financials continue in center stage as Lehman is history & Merrill Lynch is being bought out by Bank of America (BAC). American International Group (AIG), Dow stock, is officially shaky as its stock plunged into the 6s. They used to be the largest insurance company in the world. Insurance companies own stocks, chances are they may be selling a lot to raise cash. Washington Mutual (WM) is also shaky, heading back down to the low 2's.
Oil is getting clobbered (down 4 to 97 after falling to 95) despite the infrastructure damage in east Texas. Prices at the pumps around the country are spiking up on ugly thoughts about their supplies. That's a punch the economy does not need. The Alerian MLP index, in sympathy to lower oil prices, sold off 5 remaining near levels last seen 3 years ago.
The S&P 500 at 1225, is holding above 1200, a key support level (the July 15 low). If that floor does not hold, look out below! At the FED meeting this week, all of a sudden it is now assumed that they will cut rates again. That's a short term reaction, but may haunt the economy in the longer term. Amidst the chaos, it is best to try to stay cool. Use these trying times to prepare for buying opportunities in oversold stocks.
Friday, September 12, 2008
Markets little changed on a very confusing day
Dow is down only 11, advancers are slightly ahead of decliners & NAZ is essentially even. NYSE volume was low at 1.1B. The 4 biggies in trouble, AIG, MER, WM & LEH, traded 700MM in total volume. S&P 500 FINANCIALS INDEX is soggy, down 3 to 282 as financials try to make sense out of the financial mess out there. Merrill Lynch (MER) & American International Group (AIG), are off sharply again to new multi year lows (MER is at a 12 year low). Washington Mutual (WM) was even at 2.80. AIG is under pressure to announce their turnaround plan prior to Sep 25. With their stock heading for zero, that announcement is desperately needed.
•AIG May Announce Turnaround Plan Before Sept. 25 Deadline as Shares Slump
In this unusually confusing world of big finance, here's more thoughts about LEH & its future:
•Bank of America Leads Talks for Lehman as Paulson Opposes Providing Funds
•Greenspan Says Sale of Lehman Should Be Resolved Without Government Help
•Paulson, Fed Stand Against Lehman Funding Signals Attempt to Draw the Line
•Lehman Is No Bear Stearns as Money Markets Show Little Panic Amid Meltdown
It's amazing all the confusion surrounding LEH & how relatively well the markets are taking it.
Oil was about even (although it dropped one penny below 100 during the day) as IKE approaches the Texas coast. This is quite a change form a couple of months ago when this threat could be worth at least 5 points. The Alerian MLP index is having a relief rally. After being greatly oversold, it's up 5 points to 250. Many of the big name players are up 1+ from oversold conditions. However, this is the region it traded at 3 years ago.
I just returned from a meeting with top financials execs. They were guessing about what will happen to LEH, down to 3½, probably this weekend. Their stock is probably history & preferred may also lose out. The problem is making the bond holders whole. Hopefully the gov can stay on the sidelines. A takeover or bailout should bring a stock market relief rally, but bigger problems with financials are not going away soon. Just ask stockholders of AIG, MER & WM.
Fannie Mae & Freddie Mac stories are not over. They still have trillions in debts which have to be be made whole. That's where gov help may be needed, costing taxpayers billions.
•AIG May Announce Turnaround Plan Before Sept. 25 Deadline as Shares Slump
In this unusually confusing world of big finance, here's more thoughts about LEH & its future:
•Bank of America Leads Talks for Lehman as Paulson Opposes Providing Funds
•Greenspan Says Sale of Lehman Should Be Resolved Without Government Help
•Paulson, Fed Stand Against Lehman Funding Signals Attempt to Draw the Line
•Lehman Is No Bear Stearns as Money Markets Show Little Panic Amid Meltdown
It's amazing all the confusion surrounding LEH & how relatively well the markets are taking it.
Oil was about even (although it dropped one penny below 100 during the day) as IKE approaches the Texas coast. This is quite a change form a couple of months ago when this threat could be worth at least 5 points. The Alerian MLP index is having a relief rally. After being greatly oversold, it's up 5 points to 250. Many of the big name players are up 1+ from oversold conditions. However, this is the region it traded at 3 years ago.
I just returned from a meeting with top financials execs. They were guessing about what will happen to LEH, down to 3½, probably this weekend. Their stock is probably history & preferred may also lose out. The problem is making the bond holders whole. Hopefully the gov can stay on the sidelines. A takeover or bailout should bring a stock market relief rally, but bigger problems with financials are not going away soon. Just ask stockholders of AIG, MER & WM.
Fannie Mae & Freddie Mac stories are not over. They still have trillions in debts which have to be be made whole. That's where gov help may be needed, costing taxpayers billions.
Markets weak but hanging in there
Lehman (LEH), Merrill Lynch (MER), Washington Mutual (WM) & American International Group (AIG), all huge financials in various degrees of shakiness, have not been able to rattle markets seriously. The aftermath of the gov bailout for Fannie Mae/Freddie Mac is still not clear, but, again, markets are digesting this fairly well. Dow is down 67, decliners over advancers 2-1 and NAZ is down 14. The S&P 500 FINANCIALS INDEX is down only 3 to 283 in what qualifies as a very mild reaction to what is going on in the financial world.
Oil is up pennies in the 101s, again not too bad considering a couple of months ago hurricane fears could have sent oil up 5+. The Alerian MLP index which lately tags along with movements in oil prices even though they have little influence on their business, is up 4 to 248. This is probably an oversold rally, the index remains near its 3 year low.
Lehman still is on the front burner. Last night in Asian markets, they were discussing about how LEH might be bailed out & if the Federal Reserve should get involved. The truth is nobody knows but there was a feeling that an announcement might be made over the weekend. After all, they're running out of time. There was a general agreement that gov involvement should be minimal, preferably none. Today LEH stock sunk below 4. All kinds of speculation is going on about LEH, but nobody really knows what's going on, including those on the inside.
•Lehman's Fuld Pursues Talks Amid Signals Fed, Treasury Won't Fund Takeover
Speaking of the shaky group, AIG is down again, this time 3+ to 14. Much of yesterday's late day rally which recovered morning losses, evaporated today. AIG, a Dow stock & the largest insurer in the world, has clearly gotten in over its head, and, looks like it may need its own bailout. Meanwhile Merill Lynch (MER) is down 1½ on more wild speculation.
•AIG Slides, Bond Risk Rises to Record on Speculation Insurer Lacks Capital
Washington Mutual (WM) will need to sell off assets to stay alive, down fractionally to 2.74.
•Washington Mutual May Be Forced to Sell Deposits, Branches to Stay Afloat
Macro economic news continues & it's generally not pretty:
For the bullish argument, markets are taking ugly news & thoughts very well.
Oil is up pennies in the 101s, again not too bad considering a couple of months ago hurricane fears could have sent oil up 5+. The Alerian MLP index which lately tags along with movements in oil prices even though they have little influence on their business, is up 4 to 248. This is probably an oversold rally, the index remains near its 3 year low.
Lehman still is on the front burner. Last night in Asian markets, they were discussing about how LEH might be bailed out & if the Federal Reserve should get involved. The truth is nobody knows but there was a feeling that an announcement might be made over the weekend. After all, they're running out of time. There was a general agreement that gov involvement should be minimal, preferably none. Today LEH stock sunk below 4. All kinds of speculation is going on about LEH, but nobody really knows what's going on, including those on the inside.
•Lehman's Fuld Pursues Talks Amid Signals Fed, Treasury Won't Fund Takeover
Speaking of the shaky group, AIG is down again, this time 3+ to 14. Much of yesterday's late day rally which recovered morning losses, evaporated today. AIG, a Dow stock & the largest insurer in the world, has clearly gotten in over its head, and, looks like it may need its own bailout. Meanwhile Merill Lynch (MER) is down 1½ on more wild speculation.
•AIG Slides, Bond Risk Rises to Record on Speculation Insurer Lacks Capital
Washington Mutual (WM) will need to sell off assets to stay alive, down fractionally to 2.74.
•Washington Mutual May Be Forced to Sell Deposits, Branches to Stay Afloat
Macro economic news continues & it's generally not pretty:
- Wholesale Prices Plunge 0.9 Percent in August- AP
- Retail Sales Unexpectedly Drop in August- AP
- Consumer Mood Hits 8-month High in September- Reuters
- Foreclosure Filings Increase, but at Slower Rate- AP
For the bullish argument, markets are taking ugly news & thoughts very well.
Thursday, September 11, 2008
Financial worries continue to drag down markets
Dow is down 83, decliners over advancers a big 5-1 & NAX is down a more mild 9. Financials are leading the way down on more worries about Lehman (LEH), now at $4, & its ability to survive. The vultures keep circling:
•Lehman Plummets as Goldman, Merrill, Citigroup Analysts Cite Credit Risks
S&P 500 FINANCIALS INDEX
Value...273.00___Change.. (8.39)___ %Change ... (3.0%)
Washington Mutual (WM), the largest S&L in the country is down to 1.90, fearing they may need to raise a lot more capital to help cover $19B in losses from mortgage writedowns.
•WaMu Plunges on Concern It May Have to Raise Capital; Short Positions Rise
Do you want more headaches? American International Group (AIG), a Dow stock & until recently the largest insurer in the world, is down over 3 to 14 (a 15 year low). The stock's decline has been reviewed here & it looks like their financial condition is going from bad to worse. They get credit for knowing the insurance business, but wandered far afield which has brought them billions in losses. Now there are increasing doubts about their ability to recovery.
American International Group
The US is not alone in stock market suffering. Markets are falling around the world. Asian markets are taking big beatings. They worry about weaker demand from customers, with the US being their biggest customer. Strength in the dollar is making matters worse bringing up more talk about demand destruction.
Back to routine economic news, while jobless claims fell slightly to 445K last week, the number on jobless rolls climbed to 3½MM, highest number in 5 years. Times remain tough.
•Jobless Benefit Rolls in U.S. Reach 3.52 Million, Highest Level Since 2003
A back-burner news story is oil, down pennies to the 102s as the hurricane approaches Texas. Once again, demand destruction is reducing demand for oil & related fuel products limiting worries about potential storm damage.
S&P 500 declines are becoming very serious. Earlier this year, many were talking about 1270 being a key support level. It's been living under that for a few months. Now they are watching the Jul 15 low, 1200. We're just inches away at 1223 (as with Dow retesting the 10,962 closing low). Markets are all playing defense & it looks like dreary results will continue.
•Lehman Plummets as Goldman, Merrill, Citigroup Analysts Cite Credit Risks
S&P 500 FINANCIALS INDEX
Value...273.00___Change.. (8.39)___ %Change ... (3.0%)
Washington Mutual (WM), the largest S&L in the country is down to 1.90, fearing they may need to raise a lot more capital to help cover $19B in losses from mortgage writedowns.
•WaMu Plunges on Concern It May Have to Raise Capital; Short Positions Rise
Do you want more headaches? American International Group (AIG), a Dow stock & until recently the largest insurer in the world, is down over 3 to 14 (a 15 year low). The stock's decline has been reviewed here & it looks like their financial condition is going from bad to worse. They get credit for knowing the insurance business, but wandered far afield which has brought them billions in losses. Now there are increasing doubts about their ability to recovery.
American International Group
The US is not alone in stock market suffering. Markets are falling around the world. Asian markets are taking big beatings. They worry about weaker demand from customers, with the US being their biggest customer. Strength in the dollar is making matters worse bringing up more talk about demand destruction.
Back to routine economic news, while jobless claims fell slightly to 445K last week, the number on jobless rolls climbed to 3½MM, highest number in 5 years. Times remain tough.
•Jobless Benefit Rolls in U.S. Reach 3.52 Million, Highest Level Since 2003
A back-burner news story is oil, down pennies to the 102s as the hurricane approaches Texas. Once again, demand destruction is reducing demand for oil & related fuel products limiting worries about potential storm damage.
S&P 500 declines are becoming very serious. Earlier this year, many were talking about 1270 being a key support level. It's been living under that for a few months. Now they are watching the Jul 15 low, 1200. We're just inches away at 1223 (as with Dow retesting the 10,962 closing low). Markets are all playing defense & it looks like dreary results will continue.
Monday, August 25, 2008
Financials lead, markets tumble
Dow dropped 241, decliners over advancers 3-1 & NAZ dropped 49. Volume continues quiet, under 0.9B on NYSE. This was a very gloomy day for stocks led by financials:
S&P 500 FINANCIALS INDEX
Value__268.46...Change__(8.63)....% Change__(3.1%)
The financials, compiled for Bloomberg, essentially reached their one month low of 267 (which will drop off the one month grouping tomorrow). Fannie Mae (FNM)/Freddie Mac (FRE) had a good day, rising because they were able to sell more securities. They still are penny stocks selling below 5 (actually - 5.20). Rates on securities they sell keep climbing as buyers price in greater risk.
Bigger news in the financials today was American International Group, (AIG), a Dow stocks, falling 1.09 to a 13 year low!! After $25B in writedowns, they are NOT finished with this mess. It's expected that they will lose money for the 4th straight quarter which will require lower ratings on their securities. Adding insult to injury, they are no longer the largest insurer in North American. The other troubled biggie in the news, Lehman (LEH), may have to go without added financing from the Korean Development Bank, down 96¢.
Oil Rises as Tropical Storm Forms in Caribbean- AP
Ford Shares Fall to 22-Year Low- AP
Oil was up pennies on worries about threats from the tropical storm while Ford fell to a 22 year low. The Alerian MLP index dropped almost 1 to below 267, still hovering near its 52 week low (258) reached a couple of weeks ago.
Markets are clearly on defense & financials look very soggy. Maybe the Federal Reserve will not be able to wait until Friday night to come out with a rescue plan for FNM/FRE.
S&P 500 FINANCIALS INDEX
Value__268.46...Change__(8.63)....% Change__(3.1%)
The financials, compiled for Bloomberg, essentially reached their one month low of 267 (which will drop off the one month grouping tomorrow). Fannie Mae (FNM)/Freddie Mac (FRE) had a good day, rising because they were able to sell more securities. They still are penny stocks selling below 5 (actually - 5.20). Rates on securities they sell keep climbing as buyers price in greater risk.
Bigger news in the financials today was American International Group, (AIG), a Dow stocks, falling 1.09 to a 13 year low!! After $25B in writedowns, they are NOT finished with this mess. It's expected that they will lose money for the 4th straight quarter which will require lower ratings on their securities. Adding insult to injury, they are no longer the largest insurer in North American. The other troubled biggie in the news, Lehman (LEH), may have to go without added financing from the Korean Development Bank, down 96¢.
Oil Rises as Tropical Storm Forms in Caribbean- AP
Ford Shares Fall to 22-Year Low- AP
Oil was up pennies on worries about threats from the tropical storm while Ford fell to a 22 year low. The Alerian MLP index dropped almost 1 to below 267, still hovering near its 52 week low (258) reached a couple of weeks ago.
Markets are clearly on defense & financials look very soggy. Maybe the Federal Reserve will not be able to wait until Friday night to come out with a rescue plan for FNM/FRE.
Thursday, August 7, 2008
Monster Decline
Stocks never had a chance today. Dow was down 224, decliners over advancers 3-1 & NAZ dropped "only" 22. NYSE volume continues low at 1.3B. Low volume indicates bleeding will continue. A dreary unemployment report combined with a weak, at best, outlook for retail sales sunk stocks.
American International Group (AIG), a Dow stock having its worst day in 26 years (plunging 5¼) led the way down. Citigroup (C), another Dow stock, will have to return $B to investors after paying $100MM in fines, down 1.23, aggravated the negative feeling on Wall Street. The picture of AIG stocks shows they're at the lowest level since 1993:
American International Group
Financials sold off big (courtesy of Bloomberg TV):
S&P 500 FINANCIALS INDEX
Value .. 284.03 .... Change (15.01) .... % Change (5.0%)
The Alerian MLP index dropped only 2 to 259½, straddling it's new 52 week low from a couple of days ago. By comparison that's good. REITs sold off in sympathy with financials as gloom, & doom carried the day. Tomorrow Fannie Mae (FNM) reports what should be another ugly picture of big losses.
In times like these, the idea is keep your cool. Look for good values. I like oversold stocks with high yields which will make the waiting period go better until there is a meaningful recovery.
American International Group (AIG), a Dow stock having its worst day in 26 years (plunging 5¼) led the way down. Citigroup (C), another Dow stock, will have to return $B to investors after paying $100MM in fines, down 1.23, aggravated the negative feeling on Wall Street. The picture of AIG stocks shows they're at the lowest level since 1993:
American International Group
Financials sold off big (courtesy of Bloomberg TV):
S&P 500 FINANCIALS INDEX
Value .. 284.03 .... Change (15.01) .... % Change (5.0%)
The Alerian MLP index dropped only 2 to 259½, straddling it's new 52 week low from a couple of days ago. By comparison that's good. REITs sold off in sympathy with financials as gloom, & doom carried the day. Tomorrow Fannie Mae (FNM) reports what should be another ugly picture of big losses.
In times like these, the idea is keep your cool. Look for good values. I like oversold stocks with high yields which will make the waiting period go better until there is a meaningful recovery.
Walmart & jobless claims sink stocks
More negative macro economic news sent markets lower. Dow is down 109, decliners over advancers 3-1 & NAZ is down 10. Jobless claims rose slightly to 455K, worse than expected & a 6 year high. The 4 week moving average rose to 419½K, highest in 5 years. Wal-mart (WMT) reported same store sales were up 3% & Target (TGT) reported a decline of 1.2%, both below expectations. Wal-mart said, "With the end of the stimulus checks, we know consumers are spending more cautiously." Retail sales for July are looking grim & the important back to school sales season is not going well. Oil rose 1½ to over 120 on supply concerns, this time from a fire on a Turkish pipeline.
American International Group (AIG), largest insurance company in the world & a Dow stock, reported a much larger than expected loss last night, down almost 5. Today's decline is after the stock had fallen 50% YTD. They are heavily involved in credit default swaps, insurance policies to protect bondholders against defaults. AIG lost more than $25B pretax on credit default swaps in the last 9 months. Talk about not knowing what they are doing!!
The Alerian MLP index, remains near its 52 week lows, up fractionally to 262. REITs continue to pull back. Enough already with this dreary news.
American International Group (AIG), largest insurance company in the world & a Dow stock, reported a much larger than expected loss last night, down almost 5. Today's decline is after the stock had fallen 50% YTD. They are heavily involved in credit default swaps, insurance policies to protect bondholders against defaults. AIG lost more than $25B pretax on credit default swaps in the last 9 months. Talk about not knowing what they are doing!!
The Alerian MLP index, remains near its 52 week lows, up fractionally to 262. REITs continue to pull back. Enough already with this dreary news.
Wednesday, August 6, 2008
Freddie Mac problems move markets
After all is said & done, stocks ended up a little. Dow is up 40, advancers were only slightly ahead of decliners & NAZ rose 28 helped by Cisco, up 1.28, after last night's earnings. Volume continues light, at 1.2B on the NYSE. S&P 500 FINANCIALS INDEX, after an AM sell-off taking it down from the interim high yesterday of 302 to a low of 295, rallied back to 299 down 3, not too bad.
Oil closed down on routine news:
After an early morning 3 point rally, the Alerian MLP index held in the 261s, officially closing at 261.65 up 3.02. Not too bad. REITs did not rally, just sold off.
Freddie Mac (FRE), down 1.55, dominated talk today. Everybody's trying to figure out how bad their situation is & when they will need more capital. They share many of the same problems with Fanne Mae (FNM), down 2, reporting earnings on Fri. They're getting clobbered by lower home prices sharply reducing equity behind their loans. Foreign investors who bought about $1½ trillion of FRE/FNM bonds are trying to cope the new situation, these bonds originally viewed as AAA are turning out to be junk rated. They know about the mortgage mess because they read about their local banks writing off $B on investments.
Tonight, another biggie financial, American International Group (AIG), largest insurance company, reports earnings & expectations are not pretty. The stock is the worst performing Dow stock this year, down 50%. They share similar financials headaches as the competition only their numbers are bigger & uglier.
Oil closed down on routine news:
| CLU08.NYM | ...... Crude Oil Sep 08 | .... 118.46 | .....  0.71 (0.60%) |
After an early morning 3 point rally, the Alerian MLP index held in the 261s, officially closing at 261.65 up 3.02. Not too bad. REITs did not rally, just sold off.
Freddie Mac (FRE), down 1.55, dominated talk today. Everybody's trying to figure out how bad their situation is & when they will need more capital. They share many of the same problems with Fanne Mae (FNM), down 2, reporting earnings on Fri. They're getting clobbered by lower home prices sharply reducing equity behind their loans. Foreign investors who bought about $1½ trillion of FRE/FNM bonds are trying to cope the new situation, these bonds originally viewed as AAA are turning out to be junk rated. They know about the mortgage mess because they read about their local banks writing off $B on investments.
Tonight, another biggie financial, American International Group (AIG), largest insurance company, reports earnings & expectations are not pretty. The stock is the worst performing Dow stock this year, down 50%. They share similar financials headaches as the competition only their numbers are bigger & uglier.
Monday, July 21, 2008
Bank of America day
Markets started the week indecisive. Dow is off 21, advancers ahead of decliners 1¼ to 1 while NAZ slipped 5. The biggest news today was the pre-trading announcement by Bank of America (BAC), a Dow stock, of Q2 earnings. As has so commonly been reported, earnings were down from last year but beat lowered expectations & are good enough to not only earn the div but also support a slight increase later in the week. BAC is up 2 to 29½, down from an earlier high of 31. The rest of the Dow is not doing so well. Only 4 are up including 2 big gains by BAC & beaten up AIG. The other financials are: Citigroup (C) - up 41¢, JP Morgan (JPM) - down 1.18 & American Express (AXP) - down 1.10. Financials had an extraordinary run late last week, they will have to come up with more tricks this week to continue attracting buyers.
Meanwhile oil is up a little:
Otherwise, markets can't decide what to do. The Alerian MLP index is up 5 from its 52 week lows & REITs are a little higher. Stanley Works is down 2½ on a downgrade, increasing its yield to nearly 3%. Swiss Roche is offering to buy Genentech (DNA) for 89, the stock rose 10+ to over 92 anticipating an even higher bid. Buyouts are generally good for the stock market but not today. Stocks already had a big run late last week.
Apple (AAPL) earnings, among others, will come out after the close, expectations are for a pretty report. Markets have much to evaluate: BAC & other financial earnings. Look for troubled Wachovia, up 67¢ to 13.64, later this week.
Meanwhile oil is up a little:
| CLQ08.NYM | Crude Oil Aug 08 | 129.18 |  0.30 (0.23%) |
Otherwise, markets can't decide what to do. The Alerian MLP index is up 5 from its 52 week lows & REITs are a little higher. Stanley Works is down 2½ on a downgrade, increasing its yield to nearly 3%. Swiss Roche is offering to buy Genentech (DNA) for 89, the stock rose 10+ to over 92 anticipating an even higher bid. Buyouts are generally good for the stock market but not today. Stocks already had a big run late last week.
Apple (AAPL) earnings, among others, will come out after the close, expectations are for a pretty report. Markets have much to evaluate: BAC & other financial earnings. Look for troubled Wachovia, up 67¢ to 13.64, later this week.
Friday, June 27, 2008
Markets mostly muddled
Markets are mostly muddled. Dow is down 30, decliners over advancers 3-2 and NAZ down 6. On the economy, housing, inflation, unemployment fronts, etc., things look bleak. Yesterday's 2 big sells in the Dow, GM & Citi, are selling at multi year lows (11 & 17 respectively). CNBC reports that GM's market value of $7B is about equal to that of Mattel (MAT) & ½ that of Avon (AVP). Oil is trading at a new record, 142. There are calls for the price to go to 150, 170, 200, whatever. Consumer confidence fell to a 28 year low of 56.4 for the usual reasons. Merrill Lynch (MER) and American International Group (AIG), a Dow stock, are getting ready to report more ugly write-offs. KB Homes (KBH) posts a larger loss, but nobody seems to care these days. The Alerian MLP index is also down over 2 to 278, looks like it's headed for a test at 262.
Markets are greatly oversold, i.e. the sellers will just give up & shorts will start buying back. A relief rally is to be expected (probably this PM), but the outlook remains dreary. S&P 500 is the most closely watched index and the 1270 line is considered very important. Next week, it could be tested.
Markets are greatly oversold, i.e. the sellers will just give up & shorts will start buying back. A relief rally is to be expected (probably this PM), but the outlook remains dreary. S&P 500 is the most closely watched index and the 1270 line is considered very important. Next week, it could be tested.
Tuesday, June 17, 2008
Stagflation worries sink stocks
Stagflation worries sank stocks. Dow was down 108, decliners ahead of advancers 3-2 & NAZ was down 17 on just 1.1B volume. The ugly word, Stagflation, is back. That refers to a time 30 years ago when the US economy had high unemployment, high inflation & no growth. Times are a lot less ugly today, but the word is being used a lot. Banks were especially weak on an ugly forecast from Goldman Sachs. It talks about a rebound coming early next year & the need for banks to raise $65B more in capital. Raising capital is associated with div cuts, tough to hold divs flat when asking others to invest. Oil had a relatively good day for the stock market, pulling back only 60¢ in an unusually quiet day of trading. Energy shares had a great day, as investors saw them as a good place to park money. The Alerian MLP index rose a point to 292, the 290 as the support level continues to hold.
Dow is trading at the low end of the 12K range & may be testing to see if the floor can hold. Banks are getting hammered & more selling may be ahead. The Dow has Bank of America (BAC), JP Morgan (JPM), Citigroup (C), plus related financials, American Intl Group (AIG) & American Express (AXP) which are feeling the selling pressure.
Dow is trading at the low end of the 12K range & may be testing to see if the floor can hold. Banks are getting hammered & more selling may be ahead. The Dow has Bank of America (BAC), JP Morgan (JPM), Citigroup (C), plus related financials, American Intl Group (AIG) & American Express (AXP) which are feeling the selling pressure.
Monday, June 16, 2008
Oil dominates news, stocks generally higher
Oil continues to dominate the news. It neared the magic level of 140, then pulled back to to settle at 134.62, up 25¢. The secret is nobody has a clue what's going on the the oil markets, but prices are in the stratosphere which will hurt most economies of developed countries. Speaking of higher prices, corn set another record because of the flooding in the midwest. All food & agricultural related stocks pulled back on the news. Against this background, Dow was down 38 (GE &, MRK & KO hurt the average), advancers ahead of decliners 3-2 & NAZ was up 20. Volume continues low, under 1.2B. Banks rallied on the Lehman (LEH) news, but they pulled back in the late day trading. There were 55 new lows on NYSE. GE & MRK (in the Dow) were the leading new lows in terms of volume. Other major companies setting new lows were Qwest (Q) & Kimberly Clark (KMB). KMB is another member of the S&P 500 Dividend Aristocrat list. The Alerian MLP index closed 291.40, up 1.77, getting back above the magic 290-1 area of support.
American International Group (AIG), another Dow stock, the largest insurance company in the world, has a new chief. He will take a few months to learn about their problems (among others, trading at a 10+ year low), then report to analysts in Sep on changes he will make to fix the company. This is the same kind of story we keep getting, another major financial company trying to get it's house in order. I don't know!
American International Group (AIG), another Dow stock, the largest insurance company in the world, has a new chief. He will take a few months to learn about their problems (among others, trading at a 10+ year low), then report to analysts in Sep on changes he will make to fix the company. This is the same kind of story we keep getting, another major financial company trying to get it's house in order. I don't know!
Wednesday, May 28, 2008
Markets higher
Markets were higher, but not with a lot of strength & conviction. Dow was up 45, advancers ahead of decliners by 25% but NAZ was up just 5. Volume continues at just 1.2B. The durable goods report helped stocks, but oil continues high. Oil rebounded to 131 on more worries about Nigeria supplies. Oil rebounded from a 3 dollar loss earlier in the day to close up 2.18 at 131.03. Markets are mostly trading on financials & oils, the drama continues with no end in sight.
Regional banks got a lot of attention, on the negative side. Regions (RF), Fifth Third (FITB), Key (KEY), etc. took big hits on gloomy forecasts. The entire banking sector was affected although buying late in the day trimmed losses. American International Group (AIG,), in the Dow, was down to an 11 year low on worries about their credit worthiness.
Bloomberg TV reported about an Alabama county which may have to declare bankruptcy. The idea is JP Morgan bankers (among others) convinced them to issue very sophisticated debt to finance the sewer system. It looks like they didn't know what they were doing & are now in so far over their heads they may have to go under. Meanwhile banks & friends received very nice fees. Given the problems with sub-prime loans, this kind of story may play out elsewhere. For the market's sake, I hope not.
Regional banks got a lot of attention, on the negative side. Regions (RF), Fifth Third (FITB), Key (KEY), etc. took big hits on gloomy forecasts. The entire banking sector was affected although buying late in the day trimmed losses. American International Group (AIG,), in the Dow, was down to an 11 year low on worries about their credit worthiness.
Bloomberg TV reported about an Alabama county which may have to declare bankruptcy. The idea is JP Morgan bankers (among others) convinced them to issue very sophisticated debt to finance the sewer system. It looks like they didn't know what they were doing & are now in so far over their heads they may have to go under. Meanwhile banks & friends received very nice fees. Given the problems with sub-prime loans, this kind of story may play out elsewhere. For the market's sake, I hope not.
Monday, May 12, 2008
Oil lower, stocks up
Lower oil prices sent stocks higher today. Dow rose 130, advancers ahead of decliners 5-2 & NAZ had a very good day, up 43. All this activity on just over 1B in volume on NYSE, very low. New highs were about equal to new lows at 70. Much of the enthusiasm for stocks came from lower oil prices. After reaching a new record above 126, it pulled back to 124.23 down 1.73. Selling came from it being oversold & the earthquake in China caused selling on the theory that devastation will bring lower demand from China & its surging economy. NAZ had an excellent day helped by the new BlackBarry from RIMM, up 9.20. James Dimon, head of JP Morgan Chase (JPM), a Dow stock, said the US recession is just beginning even if the credit crisis is perhaps 75% over.
Hank Greenberg, former head of AIG urged a delay in the annual meeting because it was in "crisis." AIG, largest insurance company in the world & a Dow stock, was down 1.91 to 38.37, a 10 year low. This story may play out bigger in future markets.
Hank Greenberg, former head of AIG urged a delay in the annual meeting because it was in "crisis." AIG, largest insurance company in the world & a Dow stock, was down 1.91 to 38.37, a 10 year low. This story may play out bigger in future markets.
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