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Before The Bell: Morgan Stanley Write-Off, Ford Tough


Morgan Stanley comes clean in write-offs. Ford is turnin' around! Stock futures are mixed.

Morning Perspective: Morgan Stanley Reveals

Morgan Stanley (MS) announced an additional $3.7 bln in write-offs in the two months ending October 31 on securities linked to risky subprime mortgages. The news coincides with a report by the FT stating the big investment banks would be forced to sharply increase their write-offs on these securities to the tune of $60-70 bln in the coming months, making the forecasts of losses approximately $40 bln more than the banks have acknowledged so far. Toddo mentioned this in yesterday's Random Thoughts.

From the Bull Pen: Lehman Brothers (LEH) held the late October lows yesterday and a trade below $55 can be used as a short-term stop.

From the Bear Cave: Expect an early relief rally in Morgan Stanley as the news wasn't as bad as feared. $60 is a triple bottom break and can be used as a backstop for short-side tries.

Ford Tough

Ford Motor (F) reported a loss of $0.01 EPS, $0.47 better than expectations of -$0.48. Revenues worldwide rose 11.7% year-over-year to $36.3 bln vs. $33.46 bln consensus. The company also stated it was on track to meet its N. American cost reduction target of $5 bln by 2008. The CEO stated the company is achieving its market share goals and ahead of its cash outflow targets while adding the quarterly and year-to-date performances indicate the turnaround plan is working. Read Professor Depew's Five Things You Need To Know from last week for more on consumer spending.

From the Bull Pen: Those believing in Ford's turnaround may set sell-stops at $8.20.

From the Bear Cave: Auto Bears may look to Daimler AG (DAI) if it breaks the recent uptrend line at $106.5

Click on Minyanville's Stocks To Watch for more company-specific ideas.

Quick Check Around the World

Asian trading closed with the Hang Seng -3.19%, Nikkei -2.02%, Sensex -1.20%, Taiwan -3.90% and Shanghai -4.85%.

A quick check of European bourses finds the CAC -0.47%, DAX +0.28%, FTSE +0.30%, ATX -0.10%, Swiss Mkt. -0.63% and Stockholm -0.51%.

As of 8:30 AM EST, S&P futures are trading +2.20 points and Nasdaq futures are down –5.25 points.

A Look At Commodities

Crude oil is trading higher +0.42 to 96.79. Gold is up +1.10 to 834.60. Silver is also higher +0.07 to 15.39. Copper is lower -0.02 to 323.00. The dollar index (DXY) is up +0.045 to 75.45.

On the Radar

On the radar weekly initial claims data is due out at 8:30 AM EST.

Click here for Minyanville's full trading radar.

Check out Hoofy & Boo's new video! Good luck and have a great day!
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