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Market Recap: Stocks Fall Ahead Of The Weekend


Investors were cautious heading into the weekend. Stocks fall.

Stocks ended a two-day winning streak today. The Dow Industrials closed -171 points, or -1.38% to 12207, the S&P 500 fell -21 points, or -1.59% to 1330, and the Nasdaq Composite lost -34 points, or -1.47% to 2326.

Late-day selling forced major indexes to close at their lowest levels of the day as investors were reluctant to hold onto stocks into the weekend. Almost as if recession concerns and credit jitters disappeared during the rally, financial stocks quickly reminded investors of the risks in the marketplace. Rumors of more write-downs of European banks caused financial stocks to tumble around midday. Leading the downside were Morgan Stanley (MS) dropping -4.57% to $48.89, Washington Mutual (WM) falling -4.90% to $16.12, and Goldman Sachs (GS) losing -3.76% to $191.37.

"There is no question we have entered phase 3 of a 4 stage bounce process and I suspect we'll hear just how easy it was to know this was a bounce that would fail," said Professor Quint Tatro.

Hi-beta tech stocks were dragged down by the markets as well. Apple (AAPL) shares fell bellow the $130 mark, dropping -4.23% to $129.80. Research in Motion (RIMM) lost -4.29% to $90.86, and Baidu (BIDU) fell below the $300 level closing -3.59% to $296.00.

Shares of Harley Davidson (HOG) plunged today after reporting 4Q results. The company said quarterly profits came in $0.78 per share below estimates of $0.82. Revenues fell 7.7% year-over-year to $1.39 bln where analysts had expected $1.34 bln.

"The problems, again, were related to 2008 economic guidance, said Professor Kevin Depew, "Among the issues: 'Consumer confidence is low. Housing and credit issues persist. All this adds up to a weak retail sales,' said CEO James Ziemer, [and] HOG said they expect higher losses and higher delinquencies in 2008"

For more of Professor Depew's thoughts, see his daily article Five Things You Need To Know. Also check out Professor Woody Dorsey's The Recession of the Recession.

In commodities, gold prices surged after Gold Fields (GFI) announced a halt in production in its mines in South Africa. The shutdowns were due to power shortages after state-run Eskom holdings requested the company and other miners reduce their consumption. The news put selling pressure on gold stocks, however.

"[It] is bad for GFI in the short term as it has 75% of production in the country. But the company will work out something with Eskom to get power," said Professor Lance Lewis, "The country needs the money. The panic this morning is just a gift."

GFI shares fell -9.28% to $15.15. Gold gained +8.30 to 914.10. Other commodities were strong today. Crude oil added +1.43 to 90.84. Silver finished +0.155 to 16.428, and copper added +1.60 to 318.10.

For more summaries, check out Minyanville's Buzz Bits.

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: AAPL, MSFT, FLS, MER, C, WM, GFI, SPY

Some bearish trade or investment ideas: GDX, DLB, AEM, CCJ

What a crazy week! Have an awesome, well-deserved weekend!

No positions in stocks mentioned.

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