Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Market Recap: Just Kidding, No Bailout!

By

Rumors of a bailout never came true. Just a game of chicken?

PrintPRINT
"'Topsy Turvy' with a twist!" said Minyanville Editor Andrew Jeffery. The Dow Industrials added +41 points, or +0.34% to 12,254, the S&P 500 closed +7 points, or +0.52% to 1,333, and the Nasdaq Composite finished +12 points, or +0.55% to 2,272.

Ambac (ABK) topped headlines today. Investors had been waiting since last week for news of a bailout by the investment banks. But the bond insurer dropped as much as 25% after revealing its plans to raise $1.5 bln in equity and discontinue certain structured finance businesses including CDOs. Further the company stated it had written virtually no new business to date in 2008 and scared Wall Street by stating it could still operate with AA ratings.

"Why is ABK raising equity?" asked Prof. Sedacca. "Why is there no bailout? Why will it go to zero? Why is its model irreparably harmed? Because you can't
value the garbage on its balance sheet. Just like Lehman (LEH), Bear Stearns (BSC), etc… the creation of credit and money has caused disruption never seen before in my opinion."

Stocks fell overall in the financial sector. Gainers, which edged into the green, included Goldman Sachs (GS) +0.84% to $164.97; Morgan Stanley (MS) +0.29% to $41.47; and Citigroup (C) +0.23% to $22.15. Notable decliners were Wachovia (WB) -2.5% to $28.73; Merrill Lynch (MER) -1.03% to $49.32; and Bear Stearns (BSC) -1.8% to $75.78. For context on the financials, read Prof. Sedacca's Credit Default Swaps Signal Brokerage Trouble.

Lost in the hustle and bustle was the release of the Fed's Beige Book, which didn't give uplifting news either. The Fed spoke the language of a slowing economic environment stating manufacturing was subdued citing slowing vehicle sales and weak retail sales. The Fed also noted inflationary pressure on prices from materials and energy price in almost all districts and saw two-thirds of areas in the United States softening or weakening. Other economic data released today showed Nonfarm Productivity coming in better than expected at +1.9% and Factory Orders was inline with ISM services data slowing less than expected.
Read Toddo's Ten Tips For A Tough Tape.

Elsewhere, in the retail sector, Costco (COST) reported earnings. The largest U.S. warehouse chain said profits were inline at $0.74 EPS on $16.617 bln in revenues which was slightly lower than expected. And BJ's (BJ) beat estimates with earnings coming in at $0.80 per share on $2.4 bln in revenues which was largely inline. COST shares fell -2.9% to $60.50, and BJ gained +6.7% to $35.52. But the broader retail ETF (RTH) fell -0.49% to $90.20. Read Prof. Depew's Five Things You Need To Know.

In commodities, gold's decline was short-lived gaining +24.90 to 991.20. Prof. Lewis noted a breakout on a gold play ASA (ASA). "The stock is 75 cents away from breaking a 28-year trading range and is still around 10% below its NAV although that gap between it and its NAV has been closing of late." ASA shares settled +2% to $90.01.

Silver gained +0.942 to 20.680. Crude oil gained +4.90 to 104.42, and copper finished +15.05 to 397.75.

The dollar index fell -0.183 to 73.481.

For more summaries, click on 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: QQQQ, DBA, GOOG, ASA, CY, DIVX, YHOO, T, CIEN, INFN, CSCO, ADCT, JNPR, FLSR, IWM

Some bearish trade or investment ideas: LEH, BSC, TMA, MON, MOS, SPY, CF, COST

Over da hump, Minyans. Have a great night!

GET THESE INSIGHTS AND MORE IN REAL-TIME. CALL 212-991-9357 FOR A 14-DAY FREE TRIAL TO THE BUZZ & BANTER OR CLICK BELOW.
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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE