Day Traders Diary
11/11/08The markets are set to open lower as the news only gets worse. The Russian market was halted overnight as their averages collapsed. The Argentina government is running out of money. In the U.S., Toll Brothers and Starbucks had bad earnings, plus more depressing downgrades. The Dow Jones Industrial Average fell 153 points to 8,716. The S&P 500 declined 18 points to 901, while the Nasdaq Composite shed 26 points to 1,590. The list of companies running out of cash keeps mounting. Las Vegas Sands, Sirius Satellite, General Growth Properties, Genworth Financial, Fannie Mae, and KKR Financial keep heading lower. American Express converted to a bank holding company to access the TARP money. The stock is down 6%. AIG was downgraded with a price target of $1.50 a share. Tyco is down 13% after reporting a small profit. Chipmakers, AMD and Intel were downgraded. REITS, Allied Capital and American Capital both dropped 25% yesterday and are heading lower today following downgrades. Goldman Sachs downgraded Lincoln Financial, Prudential, and Hartford to sell. Speaking of Goldman Sachs, there is a report the company raised a bunch of bonds in California, reaped plenty in fees and then turned around and told their best clients to short the bonds as they came back down. And you wonder why people don't trust Wallstreet. Through the first hour, the Dow dropped over 250 points. The Nasdaq declined 43 points. Through the morning, things did not get any better. The Dow fell nearly 300 points. Many of the financials are making new lows including Goldman Sachs and Citigroup. Oil is making new lows down below $60 a barrel. Not surprisingly, the commodities are weak. Nothing is working. The averages had a nice recovery following the announcement from Fannie and Freddie regarding mortgage loan modifications, but the rally didn't last. The best we can say about today is that we didn't close on our lows. The Dow Jones Industrial Average fell 176 points, or 2%, to 8,693. The S&P 500 declined 20 points, or 2.2%, to 898, while the Nasdaq Composite shed 35 points, or 2.2%, to finish at 1,580.
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