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Market Recap: Tech-Heavy Nasdaq Plunges; Markets Fall Despite Late-Day Rally


Tech-heavy Nasdaq plunges after Bernanke's comments; Late day rally loses steam.


Another late day rally failed to push major indexes into positive territory. The Dow Industrials fell –33 points, or –0.25% to 13266, the S&P 500 fell –0.85 points, or –0.06% to 1474, and the tech-heavy Nasdaq Composite fell –52 points, or –1.92% to 2696.

Stocks sold off after a speech by Fed Chairman Ben Bernanke had investors concerned about the future of the economy. Bernanke took the stage in front of Congress early in the trading day warning lawmakers of sluggish growth continuing on into the first part of 2008. Bernanke stated subprime delinquencies were likely to rise with foreclosures continuing to be a drag on housing and the broader economy. Further, he added the lagging dollar and the high prices of oil and other commodities would spur short run inflation. Professor Depew stated Bernanke's comments sounded like inflation, yet "it's the name which must not be spoken." For more analysis on Bernanke's comments, read his daily column Five Things You Need To Know.

Stocks in the tech sector were most affected around midday. Tech-heavy Nasdaq 100 index fell as low as –4%. The performance had Toddo commenting on the Buzz, "NDX is trading Limit Down, which means that it cannot trade below this level for ten minutes…. Can we trade lower?" Professor Udall, however, chimed in stating Mr. Market was selling off the wrong stocks the hardest, noting Google (GOOG), Apple (AAPL), and Baidu (BIDU). GOOG fell –5.33%, AAPL fell –3.91%, and BIDU fell –9.4%. For more, read Toddo's Random Thoughts.

The retail sector also failed to provide any relief as a number of retailers reported same-store sales for the month of October. The performances of these stocks lead Professor Macke to wonder, "Is the consumer dead?" Further he noted the performances of Macy's (M), Nordstrom (JWN), and JC Penney (JCP) and stated "The Department Store Revival is officially over." For more, read his article October A Month To Forget For Retail.

In commodities, Crude oil fell –0.91 to 95.46. Gold closed up +4.0 to 837.50, silver added +0.19 to 15.51, and copper fell –5.50 to 320.40.

Earnings Review

  • California Pizza (CPKI) reported $0.25 EPS vs. $0.23 cons on revs $162 mln vs. $162.8 mln cons.
  • Cephalon (CEPH) reported $0.92 EPS vs. $0.84 cons on revs $438.4 mln vs. $436.7 cons.
  • Brightpoint (CELL) reported $0.15 EPS vs. $0.13 cons on revs $1.17 bln vs. $1.23 cons.
  • Nvidia (NVDA) reported $0.38 EPS vs. $0.32 cons on revs $1.1 bln vs. $1.0 bln cons.
  • Qualcomm (QCOM) reported $0.54 EPS vs. $0.53 cons on revs $2.3 bln vs. $2.26 cons.
  • Walt Disney (DIS) reported $0.42 EPS vs. $0.41 cons on revs $8.93 bln vs. $8.98 bln cons.

Idea Flow

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: VMW, WFR, CY, XLF, C, AAPL, AMAT, KLAC, NVLS, MS, WFC, HON, AA, DD, DE, gold

Some bearish trade or investment ideas: AIG, GM, HBC, GOOG, RIMM, AAPL, BIDU, BID, CROX, TEX, TM, SPX, RTH, BBY, NDX, crude oil

Hope you had a great day. Check out Hoofy & Boo's video in case you missed it. See you Friday Morning!

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No positions in stocks mentioned.

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