December 16, 2008

Tuesday, December 16th, 2008

Financial markets remain quite strained and credit conditions tight.

Diamonds

Best Buy Co Inc (BBY) is among big movers. BBY, the largest specialty retailer of consumer electronics in North America, rose $3.44 to $27.22. Shares of BBY climbed more than 15% after profit fell 77% in the third quarter and said it plans to trim capital spending and staff. Better-than-expected!

Dogs

Altria Group Inc (MO), the parent company of Philip Morris USA and largest U.S. Tobacco Company fell $4.47 to $14.53. MO's net income in the quarter decreased 67% to $867 million because of higher costs associated with its spin-off of its Phillip Morris International segment in March 2008. Here's what Jim Cramer had to say: "I don't understand this one. It was upgraded and the dividend yield is the highest it's been. It's so cheap. I urge people to buy it."


Monday, December 15th, 2008

Diamonds

Financial flexibility! MGM Mirage's properties will no longer include Treasure Island as it was sold to billionaire Phil Ruffin (Ruffin Acquisition LLC) for $775 million. MGM Mirage has owned the Treasure Island since May 2000. MGM Mirage shares rose 81 cents to close at $11.50. MGM Mirage will be able to finish and open its largest development on schedule, the $9.2 billion City Center Hotel & Casino Complex on the Las Vegas Strip.

Dogs

Notable decliners in the U.S. stock market today.

Housing stocks were lower today after Fitch Ratings downgraded the ratings of several home builders including KB Home (KBH). KBH dropped 92 cents to close at $13.37. Housing activity will be even more challenging than previously anticipated throughout 2009.

Huntsman (HUN) shares lost about half their value today, plunging 49.06% to close at $2.98. The chemical firm settled its merger dispute with Apollo Management's Hexion Specialty Chemicals for payments of about $1 billion.


Sideline
The Bernie Madoff financial fraud, possibly the largest investor fraud of all-time, comes at the worst time. Investor confidence has been shaken. That is bad enough. But, as in the case of Bernie Madoff, several large international institutions are taking a hit. The US markets were always seen as regulatory havens, a place where you could get a fair deal. If the foreign money losses confidence in our markets after all of the scandals, look out below!