Market Recap: Financials Shoot Each Other In The Foot, Stocks Fall
Financials downgraded financials, which caused a stir. But Retailers were up due to a nice showing on Black Friday. Stocks still fall.
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.
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.
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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