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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

10-31-08

October 31, 2008
It's trick or treat day and October has been no treat as more than half the year's losses have come from this month. The Dow Jones Industrial Average fell 35 points to 9,144. This has been the worst October for the Dow since
1987 crash. We have not had two up days in row for the Dow all month. Walmart is the only Dow component trading up for the year. The stock is modestly higher today. The S&P 500 declined 5 points to 948 while the Nasdaq Composite dropped 17 points to 1,680. Not much news or earnings this morning. Investors just want the month to end. Oppenheimer is down 7% after reporting a quarterly loss. Barclays is down 18% after announcing they will raise $11.9 billion.
The insurance sector got walloped yesterday. Hartford opened unchanged after dropping 50% yesterday. Prudential is down 13% today on no news. Cigna is worse, down 28%.
All this bad news and yet the averages are improving.
After the first hour, the Dow moved modestly into the green. The Nasdaq is down just 7 points. A few stocks are trading higher on earnings including Washington Post, Clorox, and Burger King. Chevron is modestly lower even though earnings doubled to $8 billion. Chesapeake Energy is lower after missing estimates. A number of techs are higher on earnings including KLA-Tencor, Akamai, and McAfee. SunMicro is down 13% following another quarterly loss. Through the first hour and a half, the averages hugged the unchanged, then rallied. Entering the lunch hour, the Dow shot up 100 points. The Nasdaq improved by
11 points. The insurance stocks remain weak, but the financials look good. Many of the techs are rallying along with select retailers. During the lunch hour, the averages remained strong. The insurance stocks have come all the way back. That's impressive. Enterng the last hour, the Dow was up 200 points. The Nasdaq was up 33 points. The insurance stocks have had a nice turnaround. Cigna is up over 70% from the morning lows. Not bad. The Dow jumped 230 points only to give up more than half the gains in half an hour. In the last half an hour, the averages rebounded only to drop off a cliff and then rebound again.
We broke a lot of records this week and this month. I
won't miss October. The Dow Jones Industrial Average
finished up 144 points at 9,325, down 14.1% for the month, but up 11.3% for the week. The S&P 500 rose 14 points to 968, a monthly decline of 16.9% and weekly gain of 10.5%.
The Nasdaq Composite climbed 22 points to 1,720, off 17.7% for October, but a gain of 10.9% from last Friday's close.




October 30, 2008
The averages are set to rebound after a last minute sharp sell off the other day. The Dow Jones Industrial Average climbed 213 points to 9,204. GE is higher after getting blamed for the sell off yesterday on an erroneous report regarding lowering sales guidance. Exxon Mobil reported world record earnings of a walloping $14.8 billion, yet the stock fell into the red after the open.
GO figure. The S&P 500 gained 21 points to 952, while the Nasdaq Composite rose 40 points to 1,697. The financials are higher except for Goldman Sachs. All the big banks got their Treasury money last night. Deutsche Bank is up 21% after better than expected earnings this morning. Metlife is up 11% after missing estimates. KeyCorp is higher on an upgrade. Most of the commodities except for Exxon are higher. Mararthon Oil, Apache, and Pride International are higher thanks to strong earnings. After the first half an hour, the averages remained strong, but off the highs. A couple of disappointing earnings from techs like Motorola and Symantec. Both stocks are down over 5%. Computer Associates is jumping 10% on better than expected results.
Apple, Google, and IBM look really good while Research in Motion is lower. Healthcare provider, Cigna is down 5% following declining profits. After the first hour, the averages remained in the green, but well off the highs.
More and more stocks are creeping into the red. The dog of the day goes to Hartford Financial down 30% after the company lost $2.6 billion. Investors are concerned a credit downgrade is next. Entering the lunch hour, the averages were unchanged, but then rebounded in the afternoon. The Dow jumped 150 points. The Nasdaq rose 38 points. One sector not rallying is the insurance stocks.
Hartford is down 52% and Prudential is down 15% ahead of earnings. In the last hour, the averages started strong, then fizzled similar to yesterday. Luckily we had a nice rally into the close. The Dow Jones Industrial Average finished up 189 points, or 2.1%, at 9,180. The S&P 500 climbed 24 points, or 2.6%, to 954 while the Nasdaq Composite rose 41 points, or 2.5%, to 1,698.


October 29, 2008
U.S. stocks opened modestly lower following yesterday's massive 10% rally. Investors anticipating a half-point rate cut from the Federal Reserve this afternoon. The Dow Jones Industrial Average fell 39 points to 9,026. The S&P 500 fell 8 points to 932, while the Nasdaq Composite fell
19 points to 1,629. Plenty of earnings and they don't look good. Corning cut earnings for the fourth quarter by half.
The stock opened down 14%. Aetna reported in line numbers, but lowered guidance modestly. The stock dropped 15% and now trades for 5 times earnings. Many companies are missing estimates or reporting losses. The list includes Legg Mason, William Sonoma, Lincoln Financial, Office Depot, Hess, and Qwest. Qwest is down 11% while William Sonoma is down 18%. Lincoln is down 11%, but Legg Mason is up 42% even though they missed estimates. Most of the financials opened lower, but are trying to rebound along with the averages. As the morning progressed the averages moved modestly back into the green, but not by much. We may be quiet ahead of the Fed meeting this afternoon. The commodity sector looks the best so far today. Suncor Energy is up 14% on earnings, Noble Energy is up 9% on earnings, and PetroChina is up 4% on earnings. Entering the lunch hour, the averages were unchanged. So far so good. The U.S. dollar is down pretty good lifting the price of oil and stocks like IBM. IBM helped lift the Dow up over a 100 points during the lunch hour. The gaming stocks are performing well after solid earnings from MGM Mirage. Las Vegas Sands is up 100%. Not bad. In the afternoon, the Fed did as expected, lowering rates by half a percent. The averages gave up all the gains, rallied 100 points, and then sold back off again. Typical market reaction to a Fed announcement. Entering the last hour the averages were unchanged. Then the roller coaster ride began. Put on your seat belt. The Dow rose 250 points only to completely collapse in the last 10 minutes.
Unbelievable. The Dow Jones Industrial Average finished down 74 points at 8,990. The S&P 500 dropped 10 points to 930 while the Nasdaq Composite gained 7 points to 1,657.




October 28, 2008
U.S. stocks jumped sharply on the open thanks in part to a big rally in the Asian markets. The Dow Jones Industrial Average gained 223 points, or 2.7%, to 8,398.
The S&P 500 rose 23 points, or 2.4%, to 872, while the Nasdaq Composite climbed 41 points, or 2.7%, to 1,546.
More regional banks are receiving Treasury money including Zions Bancorp and a local firm First Niagara. Most of the financials opened higher, but no one trusts the rally. It didn't take long for Goldman Sachs to fall into the red.
U.S. Steel, Royal Caribbean, Whirlpool, and Valero all beat by 25 cents or more. Royal Caribbean is down 6% while Whirlpool is down 12%. SAP, Ashland, BP, and Under Armour are higher on earnings. BP is up 10% while Under Armour is up 21%. A couple of upgrades this morning. Google, Marvel Entertainment, and Corning were upgraded and all are modestly higher. At 10 o'clock, the averages back off the highs as consumer confidence number came in at a 40 year low. The two largest former investment banks, Goldman Sachs and Morgan Stanley are getting hit with heavy selling pressure. The rest of the financials are holding up for now. Two restaurant stocks, Buffalo Wild Wing and Texas Roadhouse both missed estimates. Both stocks are down over 4%. After the first hour, the Dow was up 175 points. The Nasdaq was up 25 points. Through the morning the averages drifted lower, almost getting to the unchanged level, before rebounding. During the lunch hour the Dow rose 160 points. The Nasdaq rose just 15 points.
Another regional bank, Fifth Third Bancorp is getting money from the Treasury. The stock is up 7%. Through the afternoon someone pushed the wrong button because the averages kept pushing higher. The Dow rose over 400 points entering the last hour. The Nasdaq improved by 75 points.
In the last hour the averages kept rallying. I forgot the market could go up. Up, up, and away into the close. The Dow Jones Industrial Average gained 889 points, or 10.9%, to finish at 9,065. The S&P 500 added 91 points, or 10.8%, to end at 940, while the Nasdaq Composite climbed 143 points, or 9.5%, to 1,649.


October 27, 2008
For the second straight day, the futures indicate a sharp sell off on the open as the Asian markets continue to crumble. The Dow Jones Industrial Average fell 159 points to 8,219. The S&P 500 shed 19 points to 857, while the Nasdaq Composite sank 31 points to 1,520. The bad news keeps a coming, but the government's TARP program is starting to work it's way through the system. A number of regional banks are announcing they are receiving money from the Treasury. The list includes Suntrust, Capital One, KeyCorp, and Northern Trust. All four are trading higher. In fact, many of the financials move modestly into the green after the open. Morgan Stanley is down 5% on a disclosure they had to prop up their money markets last month as they faced a run on the bank or investment bank.
The TARP's commerical paper market starts today which should help Libor rates ease further. At 10 o'clock, modestly better housing numbers pushed the averages into the green led by the financials. Outside the financials, not much is working. The commodities are weak. Arch Coal is actually higher on earnings. The diversified conglomerate, Loews is down 8% on disappointing earnings.
Tidewater is down 6% on earnings. Humana is down 3% on earnings, while Verizon is up 7% on in line earnings.
After the first hour, the averages were back in the red and remained there through the morning. During the lunch hour the averages perked back up with the Dow jumping 100 points. Unfortunately these rallies don't last. The regionals look good. BB&T is up 5% after receiving $3.1 billion in Treasury money. The insurance stocks were up last Friday on news they would get some of the Treasury TARP money. Today, we are hearing the finance arms of the big three automakers may get some of the Treasury money.
Verizon isn't getting any government money, but the stock is up 10% following earnings this morning. GE is up 4.66% on hopes the commerical paper market will start to improve thanks to the government. In the afternoon the averages remained in the green, but not by much on light volume.
Friedman Billings Ramsey put out a research note saying most companies in the banking industry are still overvalued. This coming from a company who's stock is at
36 cents a share. Entering the last hour the averages were back to the unchanged level. No volume, no interest in this market. In the last hour the averages were unchanged until 3:30. Then the selling set in. Here we go again. The Dow Jones Industrial Average finished down 203 points, or 2.4%, at 8,175. The S&P 500 dropped 27 points, or 3.2%, to 848, while the Nasdaq Composite gave up 46 points, or 3%, to end at 1,505.