The Week In Review

11/10/2008 - 11/14/2008

November 14, 2008
U.S. stocks set to give back some of the 550 points rally from yesterday. Unfortunately, the economic data continues to move from bad to worse. The European Euro Zone is officially in a recession. U.S. retail sales dropped a record 2.8% in October. JC Penney lowered guidance this morning. The Dow Jones Industrial Average fell 117 points to 8,717. The S&P 500 declined 15 points to 895, while the Nasdaq Composite shed 32 points to 1,564. JC Penney and most of the retail sector are down, but less than 1%. Norstrom, Abercrombie & Fitch, and Christopher & Bank are three of the weakest retailers after dismal earnings. Kohls is up 3.5% after beating estimates. The averages improved after the open led by the financials. Insider buying yesterday from GE, Citigroup, and Blackrock are helping a little bit. Citigroup is laying off more employees. At 10 o'clock, better than expected consumer sentiment allowed the averages to inch closer to the unchanged level. The healthcare sector is modestly higher. Pfizer and Schering Plough are higher on upgrades. After the first hour, the averages had sold back off to new lows. The Dow was down 200 points. The Nasdaq declined 50 points. Very few stocks are higher. Citigroup and the rest of the financials are lower once again. Entering the lunch hour, the Dow was down 300 points. Here we go again. The averages did recover through the afternoon. Secretary Paulson made more comments regarding the TARP to respond to recent backlash. Citigroup is trying to recover as news broke the CEO will address employees on Monday. Hopefully he will say something good. The insurance stocks are rallying pretty good. Today is the last day to apply for TARP money so Hartford Financial went out bought a bank and immediately applied for TARP money. I don't know if that's right, but the stock is up 24%. Prudential is up 5%. Entering the last hour, the Dow had recovered all the losses. The Nasdaq was still down 17 points. Citigroup and a few other banks are modestly positive. The Dow rallied 80 points before selling back off. The Dow fell 200 points, recovered, then dropped like a stone in the last 10 minutes. The Dow Jones Industrial Average finished down 337 points, or 3.8%, to end at 8,497, leaving the blue-chip index down 5% for the week. The S&P 500 dropped 38 points, or 4.2%, to 873, translating into a weekly loss of 6.2%. The technology-heavy Nasdaq Composite shed 79 points, or 5%, to finish at 1,516, dropping 7.9% on the week.


November 13, 2008
U.S. stocks open higher even as the economic news gets worse. Germany declared they are in a recession. The Russian market was halted for the third straight day. Unemployment claims keep rising here in the U.S. while tech blue chip Intel lowered guidance last night. The Dow Jones Industrial Average gained 102 points to 8,385. The S&P 500 rose 12 points to 864, while the Nasdaq Composite climbed 12 points to 1,511. Intel is down 2% as hopefully most of the bad news is in the stock. The company has $10 billion in cash after subtracting the long term debt and has a monopoly on their industry. None of the earnings look very good this morning. Shoemaker, Croc's is down 55% after reporting a loss. Retailer, Charlotte Russe is down 8% after missing estimates. Fortress Investment is down 3% after missing estimates by 14 cents. Urban Outfitters is down 5% on in line earnings. Dr. Pepper Snapple is down 10% as earnings plunged. Walmart is modestly lower on earnings. It only took the market 20 minutes to go negative. Many of the financials are making new lows. The commodities are in the green. After the first hour the averages were back in the green. The Dow was up 100 points. The Nasdaq was up just 4 points. But the rally didn't last. The averages moved lower as Citigroup fell below $9 a share. GE fell below $15 a share. Speaking of GE, the company sparked a small rebound when the CEO bought 50,000 shares and stated no cut in the dividend. During the lunch hour the averages remained in the red. No buyers. The Dow fell over 300 points below 8000 once again before rebounding. The Nasdaq declined 70 points before rebounding. There are 449 new lows today. GE is trying to rebound as another insider purchased 50,000 shares. Citigroup is trying to rebound as they talk at a Sandler O'Neill conference. President Bush is speaking. For once the market rallied as the President spoke. Entering the last hour the Dow
was up 200 points. The Nasdaq rose 47 points. In the last hour, two words, blast off. The Dow Jones Industrial Average climbed 552 points, or 6.7%, to finish at 8,835. The S&P 500 gained 58 points, or 6.9%, to 911 while the Nasdaq Composite surged 97 points, or 6.5%, to settle at 1,596.

November 12, 2008
U.S. stocks opened lower for a third straight day, as investors worry about the ailing financials, the auto sector, and Best Buy which lowered its outlook this morning. The Dow Jones Industrial Average fell 168 points to 8,525. The S&P 500 declined 16 points to 882, while the Nasdaq Composite shed 26 points to 1,554. Best Buy is down 7% even though the company still expects to make $2.30 a share next year translating into a PE of 10. Most of the retailers are lower except for Bed Bath & Beyond which was upgraded this morning. Macy's is also modestly higher even though they reported a quarterly loss. The restaurant stocks are not doing much better. Bob Evans Farms is down 9% after missing estimates and then lowering guidance. The financials are trying to hold in there. American Express is down 7% on rumors the company needs more money. In the tech sector, Research in Motion, Adobe, and AMD were downgraded. Yahoo is warning of slowing ad spending. Shocker. Oil is now solidly below $60 a barrel. The Brazilian oil company, Pretobras is down 9% after lowering guidance. The stock is down 70% since May. Not bad. Through the morning the averages moved lower. The Dow fell 300 points. The Nasdaq declined 38 points. The Treasury Secretary is out speaking trying to defend his moves with the TARP program. It clearly is not being used for what it was intended for, which was, the toxic bank assets. Investors are starting to loss credibility with the Treasury Secretary.In the afternoon the averages remained weak with more stocks breaking down. Citigroup is now below $10 a share. Google broke $300 a share. Bank of America is at new lows. The list goes on and on. Diana Shipping beat estimates and then suspended their dividend to buy back their stock. Well, they're going to be able to buy it back at a lower price because the stock is down 22%. Entering the last hour, the Dow was down 300 points. The Nasdaq declined 70 points. In the last hour more selling. We're getting closer to testing the October lows. The Dow Jones Industrial Average fell 411 points to 8,282. The S&P 500 declined 46 points to 852, while the Nasdaq Composite shed 81 points to 1,499.


November 11, 2008
The markets are set to open lower as the news only gets worse. The Russian market was halted overnight as their averages collapsed. The Argentina government is running out of money. In the U.S., Toll Brothers and Starbucks had bad earnings, plus more depressing downgrades. The Dow Jones Industrial Average fell 153 points to 8,716. The S&P 500 declined 18 points to 901, while the Nasdaq Composite shed 26 points to 1,590. The list of companies running out of cash keeps mounting. Las Vegas Sands, Sirius Satellite, General Growth Properties, Genworth Financial, Fannie Mae, and KKR Financial keep heading lower. American Express converted to a bank holding company to access the TARP money. The stock is down 6%. AIG was downgraded with a price target of $1.50 a share. Tyco is down 13% after reporting a small profit. Chipmakers, AMD and Intel were downgraded. REITS, Allied Capital and American Capital both dropped 25% yesterday and are heading lower today following downgrades. Goldman Sachs downgraded Lincoln Financial, Prudential, and Hartford to sell. Speaking of Goldman Sachs, there is a report the company raised a bunch of bonds in California, reaped plenty in fees and then turned around and told their best clients to short the bonds as they came back down. And you wonder why people don't trust Wallstreet. Through the first hour, the Dow dropped over 250 points. The Nasdaq declined 43 points. Through the morning, things did not get any better. The Dow fell nearly 300 points. Many of the financials are making new lows including Goldman Sachs and Citigroup. Oil is making new lows down below $60 a barrel. Not surprisingly, the commodities are weak. Nothing is working. The averages had a nice recovery following the announcement from Fannie and Freddie regarding mortgage loan modifications, but the rally didn't last.



November 10, 2008
U.S. stocks get a shot in the arm thanks to the announcement of a Chinese stimulus package worth more than $500 billion. The Dow Jones Industrial Average gained 204 points to 9,148. The S&P 500 rose 19 points to 950, while the Nasdaq Composite climbed 26 points to 1,673. Plenty of news hitting the markets this morning. First the bad news and there is plenty. Circuit City filed for Chapter 11. A REIT, American Capital is down 26% after suspending their dividend. Another REIT, Allied Capital is down 26% following a big loss. GM is down 26% following a downgrade at Deutsche Bank with a price target of ZERO. Credit Suisse was more lenient with Ford. Their price target is one. Nortel, Tyson, Beazer Homes, and Berkshare Hathaway are all lower following earnings. Fannie and AIG are higher on huge losses. Fannie lost $29 billion while AIG lost $25 billion. Ugly, ugly numbers. Speaking of ugly, the October statements are out which may cause more selling in the coming weeks. After the first half an hour, the averages had given up some of their gains. Many of the financials moved into the red including Goldman. Goldman goes down everyday. Now for the good news. The commodity sector is strong thanks in part to the Chinese stimulus package. Deere is up 2% on a positive piece in Barrons. McDonalds is up 2.6% on strong October sales. The Dow componets in general look good. Former Dow component, AIG is up 21% on news they are getting $40 billion of the Treasury's TARP money. Best Buy is up 5% on news of Circuit City's demise. Through the morning the averages gave up more of their gains. The Dow is hanging tough. In the afternoon, the averages moved solidly into the red. Nothing looks very good. The Dow is holding up better than the rest of the market thanks to 3M, McDonalds, Verizon, Walmart, and P&G. The Dow Jones Industrial Average fell 73.27 points, or 0.8%, to 8,870.54. The S&P 500 shed 11.76 points, or 1.3%, to 919.23, while the Nasdaq Composite lost 30.66 points, or 1.9%, to end at 1,616.74.