Market Recap: Bulls Win The Day With Bailout Speculation
The last half hour erased the entire day's losses.
Stocks were negative for most of the trading day until commentators on CNBC said a consortium of banks could announce a deal early next week to bail out Ambac (ABK), the second-largest bond insurer. Stock futures surged on the news with the Dow Jones Industrial Average erasing as much as triple digit declines.
Stocks were under pressure for much of the day. Sentiment was hurt by Oppenheimer analyst Meredith Whitney, who was the first to accurately predict that Citigroup (C) would cut its dividend, said the bank would need to cut its dividend again and raise more capital. Further, she added that financials could fall 15% in a best case scenario and as much as 50% on a worst case basis. Toddo mentioned this in today's Freaky Friday Potpourri.
Financials were headed toward session lows until the rally in the last half hour of trading. Notable gainers included Bear Stearns (BSC) +3.56% to $85.16, Morgan Stanley (MS) +2.36% to $44.19, and Merrill Lynch (MER) +4.22% to $53.05. The Philadelphia Bank Index (BKX) gained +1.74% to $87.67. Check out Professor Jason Goepfert's article False Break Ahead?
Retail stocks also participated in the broad-based rally. Gainers were led by Amazon (AMZN) +2.40% to $71.65. Other notables included BJ's (BJ) +2.90% to $32.99, Costco (COST) +1.68% to $66.05. The broader retail ETF (RTH) added +1.23% to $91.72. Read Professor Jeff Macke's thoughts in Snowed in Stock Picks.
The steel sector also rose after Deutsche Bank analysts upgraded Arcelor Mittal (MT). The move came a day after the world's largest steelmaker raised prices on its products in Europe. Deutsche Bank analyst David Martin raised his rating from "hold" to "buy" citing concerns on margin pressures in key markets were eased due to these price initiatives. MT settled +3.51% to $78.18. Other stocks in the sector included U.S. Steel (X) +0.92% to $108.50, AK Steel (AKS) +4.06% to $50.79, and POSCO (PKX) +0.03% to $131.27.
Commodities were mixed. Crude oil added +0.85 to 99.08. Gold fell -1.40 to 944.70. Silver added to its gains closing +0.100 to 18.050, and copper fell -2.35 to 378.70.
The dollar index declined -0.106 to 75.495.
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: GFIG, FCSX, IBKR, STV, MCD, PAAS, SSRI, AAPL, CSCO, GOOG, MSFT, MOT, SNDK
Some bearish trade or investment ideas: BKX, NTRS, AEM, MA, WB, HL
Have an egg-cellent weekend! See y'all Monday!
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.
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.
Daily Recap Newsletter