Minyanville's Market Recap: Post-FOMC Hangover, Stocks Plunge.
CIBC Analyst shocks Financials with warnings on Citigroup and economic data didn't help. It was a Post-FOMC hangover.
U.S. stock futures started on fragile footing this morning as an analyst with CIBC commented that Citigroup (C) would need to cut its dividend or sell assets just to meet a $30 bln shortfall. The firm downgraded Citigroup with the analyst stating there was a likelihood that the stock would trade into the $30s. Citigroup shares reached a new low closing -6.89% to $38.51. C shares have fallen -30% year-to-date. Minyan Peter first mentioned Citi's numbers in A Look Into Citigroup's Write-downs.
The news took its toll on other financials. The Philadelphia Bank Index (BKX) broke the $100 level, falling -5.36% to $97.80. Bear Stearns (BSC) fell -5.0% to $107.94 amid allegations of impropriety by CEO James Cayne. Lehman Brothers (LEH) fell -4.48% to $60.50. Professor Depew even noted bellwether Goldman Sachs (GS) was capable of following the tide lower. GS fell -3.11% to $240.21.
The selling pressure was compounded by the release of economic data. The PCE price index, a key measure of inflation, gained +2.4% as expected. Excluding food and energy, the index rose +1.8% on a year-over-year basis. The figures were within the Fed's comfort zone, yet investors were more concerned with Personal spending, which came in at +0.3% versus the expected figure of +0.4%. Further the ISM factory index fell to 50.9, the lowest in seven months. For more on what these numbers mean, read Professor Depew's Five Things You Need to know.
In retail, Crocs (CROX) reported yesterday after the bell beating analyst estimates but providing mixed guidance. Professor Macke noted on the Buzz the stock was a prime example of "why it's hard to make (or keep) money in "bubble stocks." CROX closed down -36% to $48.00. Read more in Emotion Remains The Enemy.
In other earnings today Exxon Mobil (XOM) reported $1.70 versus $1.74 consensus on revenues of $102.34 bln. XOM closed -3.79% to $88.50.
In after-hours, Usec (USU) reports 3Q $0.51 EPS which may not be comparable to estimates of $0.20; revenues rose 51.9% to $634.7 mln versus $583.4 mln consensus.
Affiliated Computer (ACS) reports $0.77 EPS versus $0.84 consensus on revenues of $1.49 bln in-line with estimates.
For more summaries click on Minyanville's Buzz Bits and Professor Tuttle's Winners & Sinners.
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: BLK, SCHW, MA
Some bearish trade or investment ideas: SPX, ESS, SPG, DECK, CROX, DRYS, EXM, C, WYNN, LULU, JLL, MS, MFR, GS, CLF, MSFT, BKX, TGT, WYNN
One more day until the weekend! Have a great night!
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