Market Recap

The bulls rang the opening bell this week with a carry over rally from last week, as JP Morgan (JPM) sweetened its offer for Bear Stearns (BSC). Investor euphoria was quickly subdued as markets struggled to digest poor economic data. On the technical front, levels have changed slightly with SPX resistance now sitting near 1400 and critical support at 1260.

Last week’s rally on declining volume is worrisome, as it conveys a lack of institutional buying and more short covering. Credit markets remain in turmoil with a retest of lows probable baring rapid improvement. I expect markets to remain turbulent as investors struggle to find a bottom in the ever important financial sector. Next week investors look forward to the ever important jobs report on Friday.

The Four Sisters Performance



ETF Watch


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Top Headlines

Bear Stearns shareholders breathed a much needed sigh of relief on Monday after it was reported that J.P. Morgan will raise the firm’s buyout price from $2 to $10 per share. (3/24)

Standard & Poor’s put a damper on the Street after the ratings service downgraded Lehman Brothers (LEH) and Goldman Sachs (GS) after stating that it believes revenue could decline between 20% and 30% this year. (3/24)

Durable goods orders fell 1.7% in February, contrary to analyst expectations of a 0.5% rise for the month. (3/26)

The economy cooled off in the fourth quarter as GDP came in at a slower 0.6% growth rate. This rate marked the slowest rise since 2002. (3/27)

Consumer spending remained stagnant in February after adjusting for inflation, while personal income rose 0.3%. This marked the first positive savings rate in four months, bringing it up to 0.3%. (3/28)

Earnings Snapshot

Walgreen Co.’s (WAG) second quarter income was up 5.2% as the retailer also topped EPS estimates. (3/24)

Commercial Metals (CMC) reported net second quarter income of $39.8 mln, as opposed to $65.9 mln a year ago. The company expects third quarter earnings to rise. (3/25)

Oracle (ORCL) reported a 30% rise in third quarter EPS. The technology giant credits the success of their database and middleware licenses growth for a portion of their strong performance. (3/26)

ConAgra (CAG) saw their third quarter performance skyrocket as the packaged food company’s net income climbed by 60%. (3/27)

Accenture Ltd. (ACN) eclipsed last year’s earnings by 37% in their report this week. The consulting and out-sourcing firm also pleased investors by raising their earnings forecast. (3/27)

Market Movers: Winners & Sinners


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