The Week In Review
12/15-12/19/08December 19, 2008
The major averages received a jolt before the open after the White House agreed to loan the ailing auto industry $17.4 billion in loans to get them into the new year and to the next administration. The Dow Jones Industrial Average rose 106 points to 8,711. The S&P 500 gained 11 points to 896, while the Nasdaq Composite climbed 29 points to 1,581. GM and Ford are modestly higher on the government loan. One sector not participating in the rally is the financials. S&P downgraded the debt rating on the eleven largest banks. M&T Bank is down 3% after agreeing to acquire Provident Bank for $401 million. The commodities are performing well except for the fertilizers. Potash is down 6% after lowering estimates. The techs in general are performing well thanks to solid earnings at Research in Motion and Oracle. Both stocks are up over 6%. Jabil Circuit, Lam Research, and Palm reported dismal earnings, but both stocks are higher. LSI Logic, Microsoft, and Google were downgraded, however, both are higher. Restaurant
stocks, Ruby Tuesday will take a charge in the fourth quarter and Dardens missed estimates, yet both are higher. Dardens is up 13%. After the first hour the averages pushed higher. Even the financials are trying to move into the green. Entering the lunch hour the rally started to fizzle. The management at the automakers are thanking the President while the unions are crying foul and expect President Obama to reverse some of the requirement. What planet do they live on? The financials are back in the red. In the afternoon the averages bounced back into the green, but not by much. With a winter storm hitting the northeast, many traders may leave early. Entering the last hour the averages were unchanged. Volatility has dried up. The Dow Jones Industrial Average finished down 25 points at 8,579, down 0.6% for the week. The S&P 500 climbed 2 points to end at 887 and up 0.9% for the week. The Nasdaq Composite rose 11 points to 1,564, giving it a 1.5% gain on the week.
December 18, 2008
U.S. stocks open slightly higher thanks to a modest fall in weekly jobless claims. The Dow Jones Industrial Average rose 38 points to 8,861. The S&P 500 index gained 3 points to 907, while the Nasdaq Composite rose 3 points to 1,582. The financials are modestly higher even though Citigroup and Bank of America were downgraded. Paychex is up a few pennies even though they guided to the low end of the range. Discovery Financial is up 14% after a surprise profit forecast. The real winners so far are the insurance stocks. Prudential is up 15%, Metlife is up 10%, and Hartford is up 6%. The commodities are succombing to profit-taking following a nice run up. On the earnings front, FedEx meets lowered guidance. The company is cutting a billion dollars in costs. Ryder is guiding estimates to the low end of the range. Carnival is lower after reaffirming guidance. Pier One and Lennar reported quarterly losses. Rite Aid missed by 13 cents and cut guidance. Scholastic is down 12% after missing estimates by 40 cents. In the tech sector, Apple and Intel were downgraded. This is the third or fourth downgrade for Apple this week, however, the stock is higher. After the first hour the averages were exactly unchanged. Through the morning the averages inched into the green. Freddie Mac issued a report that mortgage rates have dropped again to an average of 5.19%. That's good. In the afternoon the averages fell back into the red, accelerating to the downside after S&P put GE and GE Capital on negative credit watch. GE dropped 6% and the Dow dropped 180 points. Thanks for that. Entering the last hour the Dow was down 160 points near the lows. The Nasdaq declined 20 points. In the last hour the averages pushed lower. The Dow Jones Industrial Average finished down 219 points, or 2.5%, at 8,604. The S&P 500 declined 19 points, or 2.1%, to finish at 885, while the technology-laden Nasdaq Composite shed 26 points, or
1.7%, to close at 1,552.
December 17, 2008
Stocks opened lower on Wednesday after the market's best day yet this month. Unfortunately, the exhilaration from yesterday is fading following more dismal earnings from the likes of Morgan Stanley. The Dow Jones Industrial Average fell 103 points to 8,820. The S&P 500 declined 10 points to 902, while the technology-laden Nasdaq Composite shed 19 points to 1,570. Morgan Stanley is down 5% after losing $2.3 billion. Most of the financials are lower. Deutsche Bank, American Express, and GE were downgraded. Deutsche Bank is down 9%. CIT Group is down 9% after the company laid out their much needed capital raise. BB&T is doing the unthinkable. They are raising their dividend. President-elect Obama's team is considering overhauling the TARP program. Deere is modestly higher after raising $2 billion through the FDIC approved loan program. The FDIC is for banks. Who knew John Deere was a bank? Crazy times. After the open the averages improved. The commodities are looking better. Goldman Sachs is in the green. The techs are mixed. Adobe is up 5% on better than expected earnings. Apple keeps moving lower, down 6% on another downgrade. Western Digital is cutting 2500 jobs. After the first hour the averages moved back to where they started with the Dow down over 100 points. The Nasdaq declined 22 points. Through the morning the averages remained weak. The commodities look good. During the lunch hour the averages slowly moved toward the unchanged level. After the lunch hour the averages actually moved into the green. Resilient market. Morgan Stanley opened lower, but now is up 9%. Nice turnaround. Macy's is up 17% after restructuring their credit facility with a number of banks. Entering the last hour the averages were back in the red and remained in the red. The Dow Jones Industrial Average declined 99 points to 8,824. The S&P 500 dropped 8 points to 904, while the Nasdaq Composite fell 10 points to 1,579.
December 16, 2008
The market averages are set to open higher thanks to better than expected earnings from Goldman Sachs and Best Buy. The Dow Jones Industrial Average gained 77 points to 8,642. The S&P 500 rose 12 points to 880. The Nasdaq Composite advanced 21 points to 1,529. So far so good. Goldman is up 6%. Most of the financials are higher except for Bank of America. Friedman Billings Ramsey downgraded Bank of America with a $9 target. Thanks for that. Friedman also downgraded American Express, but the stock is modestly higher. Wells Fargo is higher on an upgrade. Best Buy is up 14% helping lift the retail sector. Best Buy reiterated guidance for next year. The commodities look good. The fertilizers were upgraded. Deere is higher on an upgrade. The techs look good in general except for Apple. Apple is down for a second straight day on concerns of slowing demand. After the first hour, the Dow was up nearly 100 points. The Nasdaq rose 27 points. Through the morning the averages remained strong. Goldman and Best Buy keep improving. Volume is, however, light ahead of the Fed meeting this afternoon. The Fed is pulling out all the stops. Today they cut rates by 75 basis points with a target rate between zero and 0.25%. They also went on in a lengthily statement saying they will keep rates low for a long time and continue to use all their tools to get the economy back on its feet including buying mortgage-back securities. The news shot the Dow up 250 points and the Nasdaq up 53 points. The financials and insurance stocks look good. Even Cramer is bullish on the financials once again. Ge is up 4% after reaffirming numbers. Entering the last the averages kept pushing higher. The Dow shot up over 300 points. The Nasdaq rose 75 points. Thank you Mr. Bernanke. The Dow Jones Industrial Average finished up 359 points, or 4.2%, at 8,924. The S&P 500 gained 44 points, or 5.1%, to 913. The Nasdaq Composite rose 81 points, or
5.4%, to 1,589.
December 15, 2008
The averages are set to open modestly higher ahead of a big week. The Fed has a two day meeting and is expected to cut rates tomorrow. We will learn more about the financials and techs this week as Goldman, Morgan Stanley, Adobe and Oracle report earnings. The autos are also awaiting news from the Bush administration regarding the sized of the rescue package. The Dow Jones Industrial Average gained 14 points to 8,644. The S&P 500 climbed 2 points to 882. The Nasdaq Composite fell a point to 1,539. It didn't take long for the averages to fall into the red. The commodity sector is one of the few bright spots this morning. Oil is inching closer to $50 a barrel. The tech sector is under modest selling pressure. Intel, Microsoft, Oracle, and Apple were all downgraded. The financials are in the red. JP Morgan is down 5% on a downgrade. Northern Trust is down 2% after announcing a pre-tax loss for the quarter. The NY Post ran a story indicating that Morgan Stanley will lose a billion dollars this quarter, however the stock is higher. The retailers are mixed. Best Buy was upgraded and downgraded. The company reports earnings tomorrow. A few bright spots, Honeywell and Aetna are both up 7% after reaffirming guidance. Unitedhealth Group is up 4% as the healthcare sector slowly improves. After the first half an hour the Dow was down 50 points. The Nasdaq declined 20 points. Through the morning the averages remained weak with the Dow dropping as much as 100 points. The commodity and healthcare sectors are showing a little life, but that's about it. In the afternoon the averages remained weak. Oil did a reverse course sending the commodities lower. Entering the last hour the Dow was down 150 points. The Nasdaq declined 40 points. In the last hour the averages were able to rebound a little bit. The Dow Jones Industrial Average finished down 65 points at 8,564. The S&P 500 index lost 11 points to close at 868,
while the Nasdaq Composite fell 32 points, or 2%, to 1,508.