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Market Recap: E-Trade Gets Citadel Cash, Stocks Slow Down


Stocks took a break from their two-day surge while Citadel bought into E-Trade.


U.S. stock markets cooled down a bit today, finishing slightly higher after the surge of the past two days. The Dow gained +22.85 points, or 0.17%, to finish at 13,312.30. The Nasdaq closed at 2,668.13, gaining +5.22 points, or 0.20%, and rounding it out, the S&P 500 closed at 1,469.7, posting a gain of +0.73 or 0.05%.

Headlines today were dominated by E*Trade Financial (ETFC), as the company is set to receive a cash infusion of $2.55 bln from Citadel Investment Group. The cash offer is in an effort to restore some liquidity to the mortgage-troubled company. Minyan Peter took a close look at this and expressed that this may not be enough to save the company. Read more in his article, Digging Deeper Into E*Trade. Mr. Practical also asked on the Buzz if this deal would bring some relief as people see there is still someone out there who will buy this stuff. ETFC closed trading today down -8.33% to $4.84.

The U.S. credit crisis marches on as we continue to monitor the situation from all angles. Minyan Satyajit Das, who's as sharp as they come, analyzed the Federal Reserve's tactics today, saying that while banks on the Street privatize their gains and socialize their losses, "the U.S. Federal Reserve is engaged in a dangerous strategy to look after its Wall Street friends." Read more in his article Socialism for Wall Street. Along the same lines, Professor Tatro opined that the big lift in the market over the past few days seemed to be a product of capital infusion from foreign sources, most notably Abu Dhabi's investment in Citigroup (C). See his article Foreign Bid to the Rescue.

In today's economic data, new-home sales were up 1.7% more than initially reported in September, but were still 23.5% lower year-over-year. Also, the median price of a new home dropped 13%, the most since 1970, to $217,800. RealtyTrac data showed 224,451 foreclosure filings nationwide, up 94% increase from a year ago, 2% month-over-month. In today's Five Things You Need to Know, Prof. Depew covered these numbers and more.

Tomorrow we'll hear from Beeks with the following econ data:

  • 8:30 Personal Income: 0.4% cons
  • 8:30 Personal Spending: 0.3% cons
  • 8:30 Core PCE Inflation: 0.2% cons
  • 9:45 Chicago PMI: 50.5 cons
  • 10:00 Construction Spending: -0.2% cons

Earnings Review

Brocade (BRCD) reported earnings of $0.17 per share, beating consensus estimates of $0.13 EPS. Revenue rose 62.8% y/y to $340 mln versus $341.5 mln consensus.

Dell (DELL) reported $0.35 EPS, in-line with consensus estimates. Revenues rose 8.5% y/y to $15.65 bln versus $15.35 bln consensus.

Zumiez (ZUMZ) reported &0.28 EPS, in-line with consensus estimates. Revenue rose 26.4% y/y to $104 mln versus $103.8 mln consensus.

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No positions in stocks mentioned.

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