The Week In Review

Week Ending 10-17-2008

October 17, 2008
The roller-coaster ride in equity markets continues on Wall Street with stocks on Friday falling at the start thanks to weak economic data, but there is good news. Warren Buffett, the Oracle of Omaha, wrote an op-ed piece in the New York Times said he's buying U.S. stocks and this is a terrible time to be on the sidelines. The Dow Jones Industrial Average fell 227 points to 8,752. Honeywell is down 8% even though they beat earnings estimates. The S&P 500 stumbled 20 points to 924, while the Nasdaq Composite shed 46 points to 1,671. The averages started to recover as investors put money to work. I'm calling this the Warren Buffett rally. In the tech sector Google and AMD are higher following earnings. Google is up 5%. IBM is lower even though they had a solid quarter. Most financials are modestly lower. Wilmington Trust is up 4% even as profits declined 50%. Capital One is up 5% even though they missed estimates by a penny. The retailers continue to struggle. Macys and Saks are modestly higher thanks to upgrades. Kraft, a Warren Buffett stock, is up 2% on an upgrade. GM is higher on rumors of merger talks with Chrysler. Merge two weak companies to make one big weak company. After the first hour the Dow was down 100 points. The Nasdaq declined 13 points. Through the morning the averages kept improving. Maybe Warren Buffett is back buying again. More and more stocks are moving into the green. During the lunch hour, the Nasdaq moved into the green while the Dow vacillated around the unchanged level. The big banks are lower, but the rest of the financials are acting better. At the end of the lunch hour, the averages accelerated to the upside. I'm calling it the Warren Buffett rally. The Dow rose 200 points. The Nasdaq improved by 45 points. A big part of this rally is due to credit markets, particularly, the commerical paper market starting to improve. That's good for money market funds. Entering the last hour the Dow was up 100 points. The Nasdaq up 34 points. The only sector not performing well is the big banks. Go figure. In the last hour the rally fizzled. Here we go again. Today is option expiration for October. The Dow Jones Industrial Average finished down 127 points, or 1.4%, at 8,852, giving the blue-chip index a weekly gain of 4.7%. The S&P 500 declined 5 points to 940.56, up 4.5% for the week. The Nasdaq Composite dropped 6 points to close at 1,711. The Nasdaq rose 3.7%.

October 16, 2008
U.S. stocks were set to rally this morning only to opened lower, then reverse back into the green. The Dow Jones Industrial Average fell 90 points to 8,487 shortly after the open only to reverse and climb over 100 points back above 8600. The S&P dropped 10 points below 900 only to reverse course. The Nasdaq Composite declined fractionally to 1,627, then climbed 33 points. Plenty of earnings this morning. The banks are in focus. BB&T, Huntington Bancshares, CIT, Citigroup, PNC, Merrill Lynch, and Bank of New York Mellon all reported earnings. Bank of New York is higher, but the rest of the finacials really don't look good. Wells Fargo was upgraded, but the stock is lower. The commodities are trying to bounce back after getting slaughtered. Steel companies, Nucor and Reliance Steel are higher on earnings. The Nasdaq looks good, but most of the techs do not. Nokia is up 5% on earnings, but Ebay is down 10% on earnings, and Google is down 7% ahead of
earnings tonight. After the first half an hour the averages were back in the red. More economic data points to slower or negative growth. The financials are selling back off. Nothing really looks good. The list of companies that reported earnings that have not been mentioned include Parker Hannifin, Hershey, Baxter, Harley Davidson, United Tech, Unitedhealth Group, Sherwin Williams, and Textron. Hershey and Sherwin Williams are both up over 4%. Unitedhealth Group opened higher after moving their earnings date up to this morning to provide in line guidance. However, once the market sold off so did Unitedhealth Group. After the first hour the Dow was down 200 points. The Nasdaq declined 31 points. Through the morning the averages moved lower. The Dow fell 300 points. The Nasdaq declined 50 points. The Nasdaq is only 40 points from Friday's lows. Entering the lunch hour the averages started to recover. During the lunch hour, the averages recovered all the
losses, and moved into the green. Through the afternoon the averages vacillated between positive and negative, entering the last hour in the green. In the last hour the Dow shot up 200 points, 300 points, but no one trusts the rally until the bell sounds. The Dow Jones Industrial Average finished up 401 points, or 4.7%, at 8,979. The S&P 500 rose 38 points, or 4.3%, to end at 946, while the Nasdaq Composite advanced 89 points, or 5.5%, to stand at 1,717.

October 15, 2008
U.S. stocks dropped on the open thanks to weak economic data, dismal earnings, and dismal forecasts for the near term. The Dow Jones Industrial Average declined 165 points to 9,145 even though Coke, Intel, and JP Morgan all beat estimates. The S&P 500 shed 23 points to 974, while the Nasdaq Composite fell 31 points to 1,747. Most of the financials are lower to start the day. Piper Jaffray, State Street, and Charles Schwab are down on earnings. All the government moves to help ease the credit markets have not helped much as of yet. Our strongest banks, JP Morgan and Wells Fargo, are barely making money. Both stocks opened lower, but moved into the green within the first half an hour. Intel is modestly higher after beating estimates. Apple and Research in Motion are modestly higher. Altera is up 4% on earnings, but the rest of the techs are lower. The news out of the retail space is bad and getting worse. Jones Apparel is down 24% after lowering numbers.
In the drug and health care sector, Genentech is up 2% on optimistic outlook. St. Jude Medical is up 2% on earnings. The commodities are taking it on the chin. The global slowdown has dramatically reduced the demand for all commodities. After the first half an hour the Dow was down nearly 300 points. The Nasdaq declined 40 points. Through the morning the averages moved lower. The Dow fell over 300 points back below 9000. The Nasdaq declined 60 points. Very few stocks are in the green. Here we go again. In the afternoon, the selling accelerated with the Dow falling over 500 points. The Nasdaq dropped over 100 points. The Nasdaq has only another 100 points to go to get back to last Friday's lows. In the last hour, heavy selling. The Dow Jones Industrial Average finished down 733 points, or 7.9%, at 8,577. The S&P 500 declined 90 points, or 9%, to stand at 907. The Nasdaq Composite declined 150 points, or 8.5%, to 1,628.

October 14, 2008
U.S. stocks rocked higher at Tuesday's start, adding to the prior day's record-breaking gains, as the U.S. government detailed plans to inject $250 billion into the country's largest banks. After adding more than 900 points on Monday, the Dow Jones Industrial Average climbed 372 points to 9,760. The S&P 500 added 35 to 1,038 while the Nasdaq Composite rose 41 points to reach 1,885. The financials look great to start the day. Morgan Stanley is up 150% in the last two days. Not bad. Morgan and Goldman were upgraded. Many of the regional banks were upgraded as well. The broader market opened higher, but quickly pulled back. The techs were the first to start selling off. Google, Microsoft, Texas Instruments, and the Nasdaq went negative after the first half an hour dragging the Dow lower. Through the morning, the big banks held up, but the Nasdaq moved lower with the rest of the market. The commodity prices are pulling back along with most commodity stocks.
The Dow fell into the red, but not by much. Entering the lunch hour the Dow was back in the green led by the big banks. The Nasdaq is down 24 points. Dow component, J&J is up 3% on better than expected earnings. The earnings season will not look good. Pepsi is down 7% on dismal earnings. Domino's Pizza is down 30% after missing estimates. JB Hunt Transport is up 9% after beating estimates by 5 cents. The Dow Transportation Average is flat today, but down 20% in the last month. In the afternoon, so much for the rally. The Dow fell nearly 300 points entering the last hour down 150 points. The Nasdaq was down 85 points. You want volaility, we got it. In the last hour, the Dow fell over 280 points only to rally back to the unchanged level, and then sell back off. The Dow Jones Industrial Average ended down 76 points at 9310. The S&P 500 dropped 5 points to 998, while the Nasdaq Composite shed 65 points, or 3.5%, to finish at 1,779.

October 13, 2008
Up, up, and away. U.S. stocks sprang higher on Monday as widespread buying fueled the Dow Jones Industrial Average's greatest intraday point gain on record after a frantic weekend of international government actions bolstered confidence in the banking sector and credit markets. The Dow Jones Industrial Average finished up 936 points, or 11.1%, at 9,387. The S&P 500 rose 104 points or 11.6%, to end at 1,003. The Nasdaq Composite climbed 194 points, or 11.8%, to end at 1,844.