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Market Recap: S&P Brings Out The Bulls


News of the bond insurers brought relief to the markets.

Stocks finished the whipsaw action in the green today. The Dow Industrials added +189 points, or +1.53% to 12,570, the S&P 500 added +18 points, or +1.38% to 1,371, and the Nasdaq Composite finished +24 points, or +1.05% to 2,327.

Stocks were pushed upward early in the session on economic data. This morning the National Association of Realtors reported sales of existing homes in the U.S. fell last month to the lowest number in at least nine years. On a quarterly basis, January existing home sales fell -0.4%, but the number was still less than the -1.8% figure economists had forecasted. For more analysis, see Professor Depew's Five Things You Need To Know.

Although the major indexes slipped into the red ink afterwards, the sustained move came when S&P announced late in the session that it was reaffirming the financial strength of bond insurers MBIA (MBI) and Ambac (ABK). The firm took MBIA off of review for a downgrade but not ABK. S&P, however, cut the ratings of Financial Guaranty Insurance Co (also known as FGIC), XL Capital Assurance and XL Financial Assurance (units of Security Capital Assurance). The news allowed stocks to finish near the highs of the day. Notable performances were in the financial sector where stocks reversed much of the day's losses. Lehman Brothers (LEH) added +2.49% to $55.57. Merrill Lynch (MER) closed +2.58% to $54.42, and Morgan Stanley (MS) closed +2.47% to $45.28. But Toddo noted one important stock that didn't participate in the green: Goldman Sachs (GS), which finished -0.20 to $177.36. For other thoughts, check out his article Will Bond Insurer Bailout Work? and today's Random Thoughts. Also check out Minyan Peter's column Insurers' Day of Reckoning.

In Tech, M&A news helped lift the sector. Take-Two Interactive (TTWO) surged after Electronic Arts (ERTS) announced an offer to acquire the company for $26 per share, but shares of TTWO moved higher with investors believing the bid would be raised. TTWO finished +52.30% to $26.89. ERTS closed -5.57% to $47.14. Other tech stocks were mixed however. Garmin (GRMN) closed -1.53% to $62.62, Yahoo (YHOO) fell -0.74% to $28.17, and Google (GOOG) closed -4.32% to $485.88. Shares of Apple (AAPL) edged higher +0.02 to $119.41. Get Jeff Saut's perspective in Recession Gone Bananas.

In commodities, crude oil gained +0.54 to 99.35. Gold fell after the U.S. said it would back sales of the International Monetary Fund in selling some of its gold reserves. Gold contracts settled -7.10 to 937.60. Silver closed +0.115 to 18.150. Copper fell -3.85 to 374.85.

The dollar index fell -0.006 to 95.515.

For more summaries, click on Minyanville's Buzz Bits.

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: DE, MICC, GHL, LFG, DIA, SPX, INFN, NOK

Some bearish trade or investment ideas: STI, RIMM, BIDU, GOOG, MSFT, GS

What a circus today. It should be another fun one tomorrow. Have a good night, Minyans!

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No positions in stocks mentioned.

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