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Market Recap: Citi Scares Weigh on the Markets


Citi announced the CEO formerly known as Prince but surprised investors with more write-downs. Stocks end lower.

Credit fears hit the markets again today. The Dow Industrials fell -51 points, or -0.38% to 13543, the S&P 500 fell -7.48 points, or -0.50% to 1502, and the Nasdaq Composite fell -15 points, or -0.54% to 2795.

U.S. equity futures began the day down in double-digit negative territory after weekend news from Citigroup (C). The bank announced a widely-expected resignation of CEO Chuck Prince with former Treasury Secretary Robert Rubin taking over as chairman and European head Win Bischoff serving as interim CEO. What was unexpected was an announcement of $8-11 bln in further write-downs due to a $55 bln exposure to subprime-related securities. The news hit the financial sector hard today with a number of stocks hitting new 52- week lows. Citi shares fell -4.85% to $35.90. JP Morgan Chase (JPM) fell -0.38% to $42.77, and Bear Stearns (BSC) also hit a new low before closing -2.20% to $99.91. For more on Citigroup's numbers read Professor Depew's Five Things You Need To Know and Professor Sedacca's What Now For The Credit Markets?

Stocks in the tech sector were mixed. Research in Motion (RIMM) surged to a new all-time high before settling in +0.53% to $127.61. Apple (AAPL) shares fell -0.96% to $186.04, and Yahoo (YHOO) gained +0.87% to $31.38. Broadcom (BRCM) gained +0.71% to $32.91 after investment bank Caris & Company issued a note recommending investors to build a position ahead of Broadcom's analyst day. Although the firm warned that some would be turned off by the company's continued high R&D spending, Professor Udall agreed with the note and offered on the Buzz that better catalysts would likely come with multiple new product categories further down the road. Read Professor Udall's Minyan Mailbag: Why Trust Tech?

Across the world, Petrochina (PTR) became the world's largest company after its shares debuted on the Shanghai Stock Exchange. Shares nearly tripled making the company the world's first trillion dollar company. Toddo noted on the Buzz the valuation was "bigger than the entire Russian stock market." PTR shares were slammed in the U.S. however with the stock closing in down -12.92% to $222.10. For more of Toddo's perspective, click here for his Random Thoughts.

In Commodities crude oil settled lower down -2.03% to $93.98 per barrel. Gold finished up 2.30 to $810.80 and silver added +0.186 to 14.785. Copper fell -2.30 to 330.20. The dollar index was up +0.12% to 76.42.

For more summaries, click here for Minyanville's Buzz Bits and Professor Tuttle's Winners & Sinners.

Earnings Review

In after-hours Quintana Marine (QMAR) reported $0.39 EPS vs. $0.36 cons on revs of $64 mln vs. $62.1 mln cons.

Activision (ATVI) reported $0.02 EPS vs. -$0.01 cons on revs of $317.74 mln vs. $265.20 cons.

Sun Microsystems (JAVA) reported $0.06 EPS vs. $0.03 cons on revs of $3.219 bln vs. $3.262 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: ZGEN, SPWR, NTDOY, ATVI, IAC, WEL, MS, MER, JEC, OXPS, CHKEP, MFE, SYMC, YHOO, HLIT, NTAP, BRCM, EBAY, RIMM, MRVL, MBT

Some bearish trade or investment ideas: NOVC, C, GS, GE, AIG, MER, IYR, SPX, CSGP, JLL, TAXI, DRYS, ZLC, BIG, TRP, RL

Hope you all had a great day and have an even better night! See you tomorrow!
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No positions in stocks mentioned.

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