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Buzz Bits: Dow, Nasdaq Close Lower


Your daily Buzz highlights...


Editor's Note: This is a small sample of the content available on the Buzz and Banter.

What is wrong with CAT? - Bennet Sedacca - 2:30 PM

And what are the implications? From my chair, and after writing about bubbles in my Bubbles pieces Part I and Part II, it would seem that Cat is THE main beneficiary of growth in emerging markets. And its stocks acts like, well, you know what.

I find this important as it implies a worldwide slowing both here and abroad. According to Bloomberg, $17.3 billion of their revenues came in the U.S. while nearly $19 billion in sales came from 'the rest of the world.'

So I think this is a very important bellwether stock to watch as we prepare for a possible slowdown globally.

Around the Horn - Kevin Depew - 12:37 PM

  • See the Templeton Russia Fund (TRF) now down 4.3%.
  • Nowhere near exhaustion on the daily chart and the downside PnF count is to 57.
  • Since registering a TD-Sequential 13 buy signal on July 24, the HGX has made three consecutive higher lows on the chart.
  • Clearly there is accumulation going on when these stocks fall, though technically this continues to look like a case of mean reversion, not long-term improvement.
  • On Monday Ryland (RYL) registered a TD-Sequential sell signal and took a quick dive. Beazer (BZH) could potentially register a TD-Sequential sell signal next week.
  • See Goldman Sachs (GS) and Bank of America (BAC) now green?
  • If the principal required the students to dance this way, that would put a stop to it. Occam's razor, people!
  • Hi, Prymaat, where's Beldar?

Brilliant! - Vitaliy Katsenelson - 12:06 PM

I wrote this article on the impact that Wal-Mart's (WMT) brilliant (I think it's a stroke of genius) actions will have on CVS (CVS) and Walgreens (WAG) - which is not much. The only thing I failed to mention in the article is that at times the insurance co-pays for generic drugs will exceed the $4 that Wal-Mart is offering. In my experience most co-pays for generics run at about $5-$10.

So will consumers want to go to Wal-Mart to save from $1 to $6 on generic co-pays? I'd bet that a very small minority would. The brilliance of WMT's action is that neither WAG or CVS can follow its strategy because they'll jeopardize reimbursement rates from the insurance companies.

Wal-Mart's actions were not really focused on WAG or CVS, since most of their customers have insurance, they were directed towards the uninsured consumers. A bigger question: will insurance companies try to exert pressure on pharmacy retailers to follow WMT's pricing? They may try but I don't believe they'll be successful.

Position in WMT, CVS, WAG

Homie, I came to party. Your critters were lookin' at me... - Todd Harrison - 11:25 AM

  • I don't know how quarter-end agendas will play out...and anyone who claims they do, for sure, is likely smoking wacky tobackee.

  • I do know that my emerging market tea leaves (Brazil -70 bips, Mexico -1.5%, TRF -4.5%) aren't giving Hoofy the warm and fuzzies.

  • We're in the final stages before we unleash MIM-CCA (Minyans in Manhattan and the Critters Choice Awards for Children's Education). It'll be December 1st in the afternoon with keynotes from Steve Galbraith and Jeff Saut, and two macro panels, moderated by Michael Santoli. At night, we'll be honoring Trent Tucker with the first-ever "Ruby." Save the date, Minyans, and join us for a fantastic Fete!

  • If you or your firm would like to sponsor this event--or if you wanna lock your spot--please let us know!

  • Note BankAmerica and Goldman Sachs--both green--as the quarter-end posture seeds begin to plant.

  • At the risk of the editorial team tossing books and monitors my way, I've gotta start making my way to Penn Station. With NYC more congested than a winter cold, it'll likely an hour to make it across town. Don't you just love big cities? I'll be back in the saddle on Monday morning as we ready to close the books on another month. Have a great weekend Minyans and again, for those observing, a healthy and happy new year!


Early to rise, then back to bed. - Rod David - 9:10 AM

Thursday's opening gap up in S&Ps reflected optimism. The optimism wasn't random, not with the open having also been a test of the prior session's new highs. Then the afternoon's drop produced the lowest close in a week - which might seem like a non sequitur compared to the gaps up - and the drop single-handedly filled both gaps.

So the slide wasn't arbitrary noise within the range, but a rejection of relevant optimism. And that's a lot of optimism to reject in a single afternoon.

Meanwhile, internal spreads did not confirm Thursday's high-volume decline, as 80% more NYSE down volume than up volume produced only 50% more declining issues than advancers. It's not accumulation, but it does obligate Friday's market to reward Thursday's buyers for their relative productivity - even if only momentarily, and only for a test of Thursday morning's lows. A gap under Tuesday's prior lows would negate this obligation.

This IS a Friday, so any trending that takes hold through the first hour is likely to persist well into the afternoon. Similarly, NOT trending early could immunize the market from volatility until Monday.

L'Shana Tovah!

Daily home-wreck randoms - Fil Zucchi - 8:29 AM

While at this juncture I see little value in shorting most homies, the home-wreck story actually grew in importance as the side-effects spill into the broader economy. So, at risk of beating a dead Hoofy, here are today's gory highlights:

  • KB Homes (KBH) was out with partial quarterly results last night showing a 43% y/y decline in new orders. Read the full text however, and the decline in the U.S. was actually 53%, offset by a 9% increase in orders in France.

  • In case you missed, Wednesday's Fed statement described the housing market as "slowing" instead of the "gradually slowing" in the prior statement. In plain English that usually translates to "crashing."

  • The Big Picture blog highlights two sobering pieces, one from Comstock Research and one from Business Week. The latter is a must read for those involved in the home lenders.

What you need to know... - Jon Doctor J Najarian - 8:07 AM

Morning Cup Just Got Costlier! Starbucks (SBUX) announced that it planned to raise prices of its lattes, cappuccinos, drip coffee and other drinks by 5 cents. The increase, which goes into effect Oct. 3 at all company-operated stores in the and , will mark the first time the company has boosted drink prices in two years.

McDonald's (MCD) May Serve Breakfast 24/7 - The fast-food giant it is testing a new kitchen system to greatly enhance the food choices customers have no matter what time of day they visit one of its restaurants. MCD CEO Skinner says if you want hot cakes and sausage for lunch, McDonald's wants to accommodate.

Hewlett-Packard (HPQ) Gets SEC Document Demand - California Attorney General Bill Lockyer told his lawyers to "paper the place with subpoenas" when HPQ stopped cooperating with his investigation and CEO Mark Hurd will testify before congress about his involvement. Shares should see pressure again today.

Morgan Upgrades BP, Downgrades Shell – MWD is upgrading the UK's biggest oil firm , but reducing Shell to underweight from equal-weight. The broker said BP has underperformed Shell by around 6% over the last year.

Position in HPQ, SBUX

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