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Market Recap: Investors Not Pleased With the Oracle


Financials and tech stocks weigh on the markets.


Another round of late-day selling during contra hour exacerbated today's general weakness, causing stocks to close near session lows. The Dow Industrials fell -120 points, or -0.97% to 12,302, the S&P 500 dropped -15 points, or -1.15 to 1325, and the Nasdaq Composite lost -43 points, or -1.8% to 2280.

Financial stocks were volatile today. Those stocks were strong on the open despite more negative comments by Oppenheimer's Meredith Whitney that Merrill Lynch (MER) and UBS (UBS) would suffer greater than expected losses. Stocks appeared strong until rumors that Lehman Brothers (LEH) would suffer the same fate as Bear Stearns (BSC) last week caused banking stocks to fall, leading the markets to the downside. LEH fell as much as 10% before the rumors were dispelled by a Lehman spokesperson blaming the weakness on greedy shortsellers. Nonetheless, LEH settled -8.9% to $38.71. Other stocks hurt included Goldman Sachs (GS) -4% to $168.14; Morgan Stanley (MS) -4.3% to $45.69; and Merrill Lynch dropped -5.6% to $41.90. Read Professor Kevin Depew's Five Things You Need To Know. Also check out Minyan Peter's "A Bottom or The Bottom?"

Elsewhere in tech, software giant Oracle (ORCL) set the stage when it reported results for the third quarter last night. The software giant said profits were inline with estimates coming in at $0.30 per share, and revenues rose 20.7% year-over-year to $5.371 bln, but those numbers were slightly below analyst expectations of $5.4 bln.

"While forecasted profits didn't crush analyst expectations, they're still very good," said Professor Sean Udall. "In the current environment, many companies would kill for the quarter ORCL just had. Where ORCL really shines, however, is on a relative basis compared to mature companies in other sectors. We're seeing massive earnings declines (and in guidance) in housing, retail, finance, auto, but ORCL is still expanding."

ORCL closed -7.2% to $19.43 Read his column The Future of Oracle.

Other tech leaders that declined on the day include Apple (AAPL) -3% to $140.45; Google (GOOG) -3.2% to $443.12; and Research in Motion (RIMM) dropped -5% to $112.35.

In commodities, crude oil added +1.27 to 107.17. Gold fell -2.0 to 947.20. Silver added +0.167 to 18.513 and copper finished +15.25 to 390.35.

Professor Ryan Krueger noted on the Buzz, "… if commodities were a burst bubble, then it would be breaking a 250 year history. If this bull dies now, it would be less than halfway toward average price moves and one-third of the way home in length of time compared to the prior six major bull markets. None of them I can find were feeding a few billion new capitalists."

The dollar index gained +0.178 to 71.684.

For more Buzz insight, check out 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: JNPR, ORCL, CSCO, GOOG, AMSC, GEF, AAPL, SPX, MA, V, FSLR, WFR, CRM, SPY, EL, OXY, CAT, CEG, commodities

Some bearish trade or investment ideas: LNN, AG, RIMM, AAPL, CKE, DSW, WDC, GOOG, DAL

One day left, Minyans. Have a good night!

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No positions in stocks mentioned.

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