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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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The Week In Review

1/5-1/9/09

January 9, 2009
The much anticipated December monthly unemployment number was released and it wasn't pretty. The U.S. lost 524,000 jobs in December and 2.6 million for all of 2008, the worse year since 1945. Unemployment jumped to 7.2%, the highest level since 1993. The Dow Jones Industrial Average fell 10 points to 8,731. The S&P 500 fell 3 points to 906. The Nasdaq Composite fell 9 points to 1,607. After the open the averages pushed lower. Unfortunately, the economy and job losses will only get worse. Very few stocks are in the green. Plenty of downgrades in the retail space including J. Crew, Sears, Mens Wearhouse, and Abercrombie & Fitch. Coach is down 13% after lowering guidance last night. Aeropostale was upgraded, however the stock is lower. Best Buy is down 3% after narrowing guidance. The financials are modestly lower except for Goldman and Morgan Stanley. A few tech stocks are higher including Reseearch in Motion, Yahoo, and Palm. Palm is up 44% after releasing a version of their new smart phone. The
commodities are lower. Nothing really looks good. After the first hour, the Dow fell over 100 points. The Nasdaq declined 34 points. A homebuilder, Lennar is down 20% on rumors the company is cooking the books. No good news today. Through the morning and into the afternoon, the averages remained in the red. A few times they tried to rally, unsuccessfully. In the last hour we heard rumors Citigroup and Morgan Stanley may eventually merge their brokerage divisions. Morgan's stock is up a little. Citigroup is also making news that Robert Rubin is leaving the firm. That stock is down 6%. Into the close, more selling. Here we go again. The Dow Jones Industrial finished down 143 points, or 1.6%, at 8,599, leaving the blue-chip index down 4.8% for the week. The S&P 500 declined 19 points, or 2.1%, to stand at 890, translating into a weekly loss of 4.5%. The Nasdaq Composite dropped 45 points, or 2.8%, leaving the technology-laden index down 3.7% on the week.

January 8, 2009
The markets are down once again this morning following weak holiday retail sales. The Dow Jones Industrial Average dropped 71 points to 8,698. Walmart is down 9% after missing December sales targets. The S&P 500 fell 6 points to 900 while the Nasdaq Composite declined 8 points to 1,590. No sugar coating it, the retail sales were weak. Most of the retailers are lower. Gap, J. Crew, Mens Wearhouse, and Macys all cut their outlook. A few retailers are higher. Christopher Bank and Bed Bath & Beyond had solid earnings. Aeropostale actually saw sales rise in December. That stock is up 3%. Sears numbers were not great, but the stock is jumping 18%. In other sectors, more preannouncements. Cardinal Health, Manitowoc, and Intuitive Surgical all lowered numbers. Manitowoc and Intuitive both opened down 15%. Within the financials, the best we can say is that most are unchanged. Moodys put Bank of America on credit watch negative. One interesting development is evolving at Citigroup. In the past, the big banks were against judges reworking mortgages to keep people in their homes. Now Citigroup is working with Senators to create legisation for that exact purpose. The techs are quiet this morning. EMC is up 4% after reaffirming numbers. After the first hour the averages tried to claw back. More financials are inching into the green. President elect Obama spoke this morning regarding the economy. The speech was light on details which caused the averages to drop back toward the lows of the day. In the afternoon more of the same. The averages tried to rebound only to sell back off. Investors are still nervous about tomorrows monthly unemployment numbers. Heading into the last hour the averages tried to rebound once again. The Nasdaq moved into the green. The Dow inched closer to the unchanged level. The news regarding Citigroup agreeing to allow Congress and judges to rework mortgages is getting more press. In the
last hour the averages kept improving. The Dow inched closer to the unchanged level closing down just 27 points at 8,742. The S&P 500 gained 3 points to close at 909. The Nasdaq Composite gained 17 points to end at 1,617.


January 7, 2009
The see saw market is back. The averages open sharply lower following an ADP report indicating a deterioration in the labor market for December. To make things worse, the Congressional Budget Office is now predicting a budget deficit of $1.2 trillion next year. Yikes. Investors now seem nervous ahead of Fridays government unemployment data. The Dow Jones Industrial Average opened down 155 points to 8,855. Alcoa is down 6% after announcing major cost cuts. The S&P 500 fell 17 points to 917, while the Nasdaq Composite fell 33 points to 1,619. Very few stocks look good. The financials are lower following a negative analyst call from Meredith Whitney at Oppenheimer. Even the regional banks are getting hit. Bank of America is raising $2.8 billion from selling a stake in a Chinese bank. Most of the techs are lower. Intel has been acting great, but not today. The stock dropped 4% after lowering sales forecasts. Apple and Micron were upgraded, however, both are lower. Time Warner and Supervalu indicated they will report fourth quarter losses. Time Warner is down 6%. There are a few bright spots in the market. Monsanto and Family Dollar both reported solid quarterly earnings. Monsanto is the diamond so far up 14%. AK Steel and Unitedhealth Group were both upgraded. Both stocks are higher. And that's about it for the good news. After the first half an hour the averages remained weak near the lows of the day. Through the morning, and into the afternoon, things got worse not better. Stocks that had performed well are weak today. The price of oil is having its worse day in seven years, down 12% as inventories rise. The economic news isn't getting any better. Entering the last hour the Dow was down 250 points. It didn't take long, but the Dow and S&P 500 are now negative for the year. The Nasdaq declined 50 points. Not good. Very little improvement in the last hour. The Dow Jones Industrial Average finished down 245 points, or 2.7%, at 8,769. The S&P 500 declined 28 points, or 3%, to 906. The Nasdaq composite dropped 53 points, or 3.2%, to close at 1,599.


January 6, 2009
U.S. stocks turned higher at Tuesday's start, led by a rally in energy shares as crude jumped above $50 a barrel and ahead of a new round of economic data that could show signs of moderation in the nation's economic decline. The Dow Jones Industrial Average rose 72 points to 9,025. The S&P 500 climbed 8 points to 936, while the Nasdaq Composite gained 12 points to 1,640. So far so good this morning. The commodities are acting great although there is some profit-taking within the fertilizer space. Mosaic had solid earnings, but investors are taking profits after a nice run up. The techs are perking up. The chip stocks are performing better as pricing seems to be improving at least in the short term. Apple continues to improve as investors get more news on the health of Steve Jobs. The financials are modestly higher. The former investment banks, Goldman Sachs and Morgan Stanley are acting great. Some of the rally may be due to new proposed legislation for tax loss gains regaining the housing market. The homebuilders are performing better as well. The retailers are acting well. Best Buy and Target are up over 2% for a second day in a row. After the first half an hour the Dow rose 125 points. The Nasdaq rose 28 points. At 10 o'clock weaker than expected economic data brought the sellers back. After the first hour the Dow remained up, but only 30 points. The Nasdaq was only up 8 points. Through the morning the averages remained in the green, but not by much. Most stocks are in the green. The phone companies, Verizon and AT&T are down for a second straight day. In the afternoon more of the same. The Dow actually rose more than 120 points before entering the last hour, but sold off in the last hour. Comments from Bank of America CEO indicating that he will not take a bonus and that fourth quarter results will be below expectation brought the sellers back.


January 5, 2009
We start the first full week of the new year to the downside. The Dow Jones Industrial Average fell 81 points to 8,954. The S&P 500 declined 7 points to 923, while the Nasdaq Composite dropped 13 points to 1,618.
The financials are lower. Unfortunately, the financial problems have not gone away. A key bank analyst, Mike Mayo lowered estimates on all the top banks. Most of the techs opened to the downside except for Apple. The stock rose 3% after CEO Steve Jobs explained the reason for his loss in weight was due to a hormone imbalance and would not impede his job as CEO. The retailers continue to struggle. Saks is down 15% after having their numbers cut at Barclays. The phone companies, typically a defensive area, are getting wholloped thanks to a downgrade. AT&T is down 3%. Verizon is down 5%. Through the morning the averages tried to recover moving closer to the unchanged level. In the afternoon more of the same. The averages came close a couple of times to the unchanged level only to sell back off. However more and more stocks are performing well. More techs like Google and the other big cap techs are moving into the green. The retailers are perking up as well. Best Buy and Target are both up 4%. One sector performing great again is the commodity space. Weak auto sales and sobering news about the economy brought more sellers to the market. Entering the last hour things didn't look good. The Dow was down 130 points. The Nasdaq was down 12 points. But luckily a few buyers showed up in the last hour to lift the averages off their lows. The Dow Jones Industrial Average finished down 81 points at 8952. The S&P 500 shed 4 points to 927, while the Nasdaq Composite lost 4 points t0 1,628.