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Market Recap: Financials Shoot Each Other In The Foot, Stocks Fall

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Financials downgraded financials, which caused a stir. But Retailers were up due to a nice showing on Black Friday. Stocks still fall.

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Stocks dropped, breaking the streak of Turnaround Tuesday. The Dow Industrials fell -65 points, or -0.49% to 13,248, the S&P 500 fell -9.6 points, or -0.65% to 1462, and the Nasdaq Composite fell -17 points, or -0.66% to 2619.

Financial stocks shot each other in the foot this morning. The major investment banks tumbled after JPMorgan (JPM) analysts said the banks would face more losses due to more write-downs, falling M&A activity, and overall weaker credit conditions. The report coincided with one by Goldman Sachs (GS) that the firm cut its earnings expectations for S&P 500 companies to reflect profit impairments in the banking industry. Growth was reduced to 0.7% from a previous figure of 4.0% with 2008 estimates cut to 5.6% growth vs. 7.5% previously. GS fell -5.14%, Morgan Stanley (MS) fell -4.34%, Bear Stearns (BSC) fell -4.87%, and Merrill Lynch (MER) fell -3.27%. See a related story by Professor Shedlock, Deflationary Credit Downturn Is Underway.

Meanwhile, retailers were the surprising bright spot. Research firm Jefferies issued a note this morning stating a number of retailers would likely surprise the Street with better-than-expected comparable store sales due to a strong Black Friday and Thanksgiving Day weekend in addition to the recent cooler weather. Gap (GPS) added +1.32%, Abercrombie & Fitch (ANF) added +0.64%, Wal-Mart (WMT) finished +0.67%, and Costco (COST) closed +3.27%.

Elsewhere, tech stocks were mixed. Baidu (BIDU) added +0.81%, Google (GOOG) gained +0.27%, and Apple (AAPL) added +0.54%. Toddo mentioned these stocks, asking whether the action showed "year-end performance anxiety." For more, read his Random Thoughts.

In commodities, crude oil continued its decline falling -0.99 to 88.32. Professor Michael cautioned Buzz readers in pressing the short side of crude even though it broke key support of $90 due to, amongst other reasons, relatively stable performances in the XLE and OIH. Those stocks closed -1.5% and -1.0% respectively.

Copper also fell -5.8 points to 302.00 per pound, but precious metals gained on the day. Silver gained +0.25 to 14.47, and Gold added 12.90 to 807.60. Read Professor Lance Lewis' Minyan Mailbag for his update on gold's recent performance.

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


Earnings Review:

Chico's FAS (CHS) reports $0.10 EPS vs. $0.11 cons on revs $416.00 mln vs. $421.26 mln cons.

Collective Brands (PSS) reports $0.39 EPS vs. $0.32 cons on revs $830.7 mln vs. $848.22 mln cons.

Guess (GES) reports $0.62 EPS vs. $0.58 cons on revs $469.10 mln vs. $424.54 mln 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: CROX, PHM, FLIR, CY, MBT, ISRG, WDC, CSIQ, ESLR, NBIX, DIS, ATVI, XLE, OIH, IWM, QQQQ, C, MA, CME, MOGN, GOOG, FRPT

Some bearish trade or investment ideas: DAL, GM, INFN, CSCO

Hope y'all had a great day. See you in the mornin'!
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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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