The Week In Review

Week Ending 10-24-2008

October 24, 2008
The overseas markets are crashing, sending the futures in the U.S. markets down limit. The Dow Jones Industrial Average fell 408 points to 8,282. The S&P 500 dropped 48 points to 859, while the Nasdaq Composite declined 89 points to 1,514. The analyst community is quiet this morning, paralyzed by the pending sell off. Companies continue to report earnings, beating lowered expectations, but it isn't helping. Western Digital beat, Aflac beat, Deckers Outdoors beat, Fortune Brands beat, Microsoft beat, Compuware beat, Juniper beat, and Burlington Northern beat, yet only Western Digital is trading higher. Cheesecake Factory and Yellow Trucking both missed and are trading down 10% or more. One acquisition this morning. Regional bank, PNC Bank is buying National City for $2.23 in stock. PNC is trading higher and many of the regional banks are not down much because investors know there will be more acquisitions to come. After the first half an hour, the Dow was down 300 points. The Nasdaq was down 50 points. No crash yet. After the first hour, the Dow was down 425 points. The Nasdaq down 70 points. Volume and volatility are low so far. Everyone is waiting for something to happen. Through the morning the averages remained weak, but off the lows. The Treasury announced that another 20 banks will receive money from the rescue package on top of the top nine banks that have already signed up.
In the afternoon the averages started to move back toward the lows of the day, down over 400 points. Entering the last hour the insurance stocks improved as news broke that the Treasury is debating on whether to use some of their $700 billion to aid the insurance industry. In the last hour the averages took a few attempts to rebound with little success. The Dow Jones Industrial Average finished down 312 points, or 3.6%, at 8,378, leaving the blue-chip index down 5.3% for the week. The S&P 500 fell 31 points, or 3.5%, to 876, translating into a weekly loss of 6.8%. The Nasdaq Composite shed 51 points, or 3.2%, to close at 1,552, off 9.3% for the week.

October 23, 2008
U.S. stocks set to open modestly higher after a 500 point drumming yesterday. The Dow Jones Industrial Average rose 50 points to 8,569. The S&P 500 added 10 points to 907, while the Nasdaq Composite gained 13 points to 1,628. Within the first 15 minutes the Dow jumped 130 points and then plunged back into the red. Whether it's true or not, the markets are selling off on fears of forced redemptions among mutual funds and hedge funds. The earnings keep coming in. Most of the companies are beating lowered estimates. U.S. Airways beat, Seagate beat, Altria beat, LSI Logic beat, Xerox beat, Sallie Mae beat, Baidu beat, Amazon beat, Bristol Myers beat, Jetblue beat, Black & Decker beat, Radio Shack beat, and Potash beat by 36 cents, but all are lower. Amazon is down 11%. Baidu is down 15%. A few stocks are modestly higher on earnings like UPS, NCR, Eli Lilly, and Union Pacific. The big winner so far is Amgen up 10% on strong earnings. Chipotle Mexican Grill
is up 3% on in line earnings. After the first hour the Dow clawed its way back into the green. The Nasdaq was unchanged. Through the morning the Dow improved rallying 200 points. The Nasdaq inched up 10 points. During the lunch hour, the rally fizzled. Volume seems to be light because the averages are bouncing all over the place. By the middle of the afternoon the Dow was down over 270 points to 8243. The Nasdaq dropped 81 points to new lows of the year down of 1533. In the last hour the averages recovered all the losses, moving into the greenm then sold back off by 100 points or to rally into the close.

October 22, 2008
The earnings keep flooding in and the news is not good. The averages are moving lower to start the day as investors fear the recession will be worse than expected. The Dow Jones Industrials fell 226 points to 8,807. The S&P 500 declined 22 points to 932, while the Nasdaq Composite shed 27 points to 1,668. The bright spots are few and far between. Apple is up 8% on strong iphone sales. Broadcom and VMware are both up 9% on earnings, however both stocks have gotten clobbered over the last several months. EMC is up 7% on earnings and that's about it for the good news. Even the defensive stocks like Kimberly Clark, Philip Morris International, Reynoldds America, and Merck which all beat estimates are trading lower. Now for the really bad news. The financials are retreating once again. Northern Trust is down 3% after posting a loss. Wachovia posted a whopping $24 billion loss for the quarter. Luckily for them, they are getting bought out by Wells Fargo.
Good luck, Wells Fargo. The commodity stocks are getting hit once again. Conoco Phillips easily beat and yet the stock is down 5%. Baker Hughes is down 12% after missing estimates. U.S. Steel is down 6% after Goldman Sachs put a sell rating on the stock. The healthcare sector is getting hit. Coventry Health is down 40% after lowering estimates. Wellpoint is down 5% after beating estimates. Investors don't care. After the first half an hour, the Dow was down 312 points at 8721. The Nasdaq declined 30 points. In the afternoon the averages remained weak. The Dow remained down 300 points although many of the big banks are not that weak. A number of big techs are in the green like Google, Apple, Research in Motion, Broadcom, and VMware. Another positive is that oil keeps moving lower, now at a 16 month low. In the last hour, the averages moved lower dropping over 600 points. At least we didn't close on our lows. The Dow Jones Industrial Average fell 514 points, or 5.7%, to end at 8,519. The S&P 500 shed 58 points, or 6.1%, to 896, while the Nasdaq Composite plunged 80 points, or 4.8%, to 1,615.

October 21, 2008
U.S. stocks open lower as the earnings come flooding in and they're not looking too good. The Dow Jones Industrial Average fell 133 points to 9,132. DuPont is down 3% after lowering guidance. Alcoa and Exxon Mobil are also down over 3%. The S&P 500 shed 16 points to 968, while the Nasdaq Composite declined 31 points to 1,738. In the tech sector, Texas Instruments is down 10% on disappointing earnings. Sun Micro is down 13% after lowering guidance. Oracle announced a $8 billion share buyback, but it isn't helping. The stock is trading lower. The financials continue to report bad earnings. Citigroup and American Express were downgraded to sell at Goldman Sachs. American Express was trading up last night after earnings, but is now lower. M&T, Keycorp, Blackrock, Western Union, Fifth Third, US Bancorp, and National City all reported earnings. Western Union is down 17%, but the rest are hugging the flat line. There will be a lot of consolidation within the banking sector over the next several years. The drug stocks are reporting solid earnings. Schering Plough and Pfizer are higher after earnings. After the first half an hour the averages cut their losses in half. 3M looks good in the Dow, up 5% on earnings. The retail space is holding in there. Coach lowered guidance, but the stock is up 10%. Walmart is up 10%. After the first hour, the averages reached the unchanged level only to sell back up. The commodities are weak today. Through the morning the averages sold back off. The Dow fell as much as 250 points before rebounding. American Express, GE, 3M, Pfizer, and Walmart are in the green within the Dow and that's about it. Regional banks M&T Bank and KeyCorp look good after negative openings. Before the last hour, the Dow recovered all its losses before selling back off in the last hour. More volatility. The Dow Jones Industrial Average finished down 231 points, or 2.5%, at 9,033. The S&P 500 fell 30 points, or 3.1%, to 955, while the Nasdaq Composite dropped 73 points, or 4.1%, to finish at 1,696.

October 20, 2008
U.S. stocks open higher once again as traders grow more confident that government measures to stabilize the financial system will work. The Dow Jones Industrial Average jumped a quick 100 points to 8,953. The S&P 500 rose 15 points to 956, while the Nasdaq Composite gained 19 points to 1,730. It's a broader market rally where everything looks good including commodities. Halliburton is up 14% on earnings. Mosaic is up 11% on rumors of a takeover. Transocean is up 7% on an upgrade. Weatherford is up 11% on in line earnings. The finanicals look pretty good. The Fed Chairman speaks to Congress at 10 o'clock this morning. The techs look good this morning. Applied Materials and Cisco are higher on upgrades. For some reason Apple and Research in Motion are lower. Google continues its rally after better than expected earnings. They will release their new G1 phone through T-Mobile this week. Things are mixed in the retail space. The toy companies are struggling. Not good for the holiday season. Hasbro and Mattel are lower following earnings. Best Buy is modestly higher on positive analyst comments from Barclays. At 10 o'clock, the averages jumped on news that the Fed Chairman would support a second economic stimulus. The Dow jumped over 200 points back above 9000. The Nasdaq improved by 30 points. Through the morning the rally fizzled. The Dow gave up more than half its gains. The Nasdaq actually fell into the red as the big blue chip techs went into negative territory including Google. In the afternoon the rally reaccelerated. Secretary Paulson made more comments about the cash infusion into the banks and indicated that the government should make money on these investments. The techs look much better. In the last hour, the Dow rose over 300 points and accelerated into the close. The Dow Jones Industrial Average finished up 413 points, or 4.7%, at 9,265. The S&P 500 climbed 44 points, or 4.8%, to 985, while the Nasdaq Composite rose 58 points, or 3.4%, to 1,770.