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Minyanville's Market Recap: Oil Slides, Shippers Tank, Markets End Lower


UBS reported greater than expected losses and housing continued to look bleak. Oil slid while the shippers tanked!

Stocks fell today as the Fed gathered to decide on monetary policy. The Dow Industrials fell -0.56% to 13792, the S&P 500 fell -0.65% to 1531, and the Nasdaq Composite lost -0.03% to 2816.

Stocks were flat this morning as UBS (UBS) announced larger-than-expected write-downs only a day after stating losses were in-line with previous estimates. Europe's largest bank by assets reported its first quarterly loss in almost five years, stating third quarter net losses at $715 mln and exceeding analyst estimates. In addition, the bank's CEO Marcel Rohner said the continued slump of the U.S. housing market will likely not allow UBS to achieve a profit for the fourth quarter. Shares of UBS actually turned positive for a brief moment during the trading day but proceeded to close -0.26% to $53.11. Other performances were in synch with Merrill Lynch (MER) down -2.76%, Bear Stearns (BSC) -1.55%, and Citigroup (C) -1.36%. Toddo wondered with such large writedowns, why were the markets breathing a sigh of relief? For more of his thoughts, read Answers I Really Wanna Know.

In the housing sector, home builders performed well today even after the S&P/Case-Shiller home price index showed a 4.4% decline in the 12 months that ended in August. The figure came in greater than the 4.2% economists had estimated. (From Bloomberg). Nonetheless, the Philadelphia Housing Sector Index (HGX) added +0.24%. Ryland Homes (RYL) added 3.28%, Meritage Homes (MTH) added +7.3%, and Hovnanian (HOV) added +7.73%. For more on the S&P/Case Shiller index, read Professor Depew's Five Things You Need To Know.

In commodities news, oil plunged -$3.15 a barrel to $90.38 after a note appeared on the Buzz & Banter that Goldman Sachs (GS) was advising clients to take profits after oil's recent surge. After the drop, commodity-led stocks followed suit including the shippers. Professor Cooper noted on the Buzz DryShips (DRYS) and Excel Maritime Carriers (EXM) giving up gains after recent "spikage." Professor Bloudek chimed in, stating there were differences in the stocks but the whole sector was hit hard because "sellers don't care about these differences and just shoot 'em all – they'll sort out the bodies later." DRYS closed -16.2%, EXM fell -20.02%, and Genco (GNK) fell -13.9%. For more summaries on the Buzz & Banter, click on Minyanville's Buzz Bits.

Here's a quick recap of earnings results from today:

U.S. Steel (X) reported $2.50 EPS versus $2.63 consensus on revenues of $4.35 bln versus $4.36 bln consensus.

BJ Services (BJS) reported 4Q $0.64 EPS versus $0.60 consensus on revenues of $1.28 bln versus $1.22 bln consensus. The company issues downside guidance for 1Q sees EPS of $0.58-0.60 versus $0.63 consensus.

Ceradyne (CRDN) reported 3Q $1.16 EPS versus $1.36 consensus on revenues of $191.6 mln versus $189.2 mln consensus.

Under Armour (UA) reported 3Q $0.40 EPS vs. $0.34 cons on revs of $186.90 mln vs. $170.97 cons.

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: GOOG, SNDK, SLE, DFS, LULU, MAN, BIDU, AAPL, GOOG, AMZN, RIMM

Some bearish trade or investment ideas: K, GPS, AMG, DRYS, EXM, SPX, XLE, CSGP, JLL, OIH, CMBX, QQQQ

Hope y'all had a great day. Have a great night!
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