Market Recap: The Florida Freeze, Tech Slips...
Stocks closed all mixed up while tech finished with a black eye.
The big news was from Florida, where officials suspended withdrawals for an investment fund for schools and local governments. This came after redemptions sparked by downgrades of debt held in the portfolio reduced assets by 44%. $3.5 bln were withdrawn, bringing the fund's assets down to $15 bln. Prof. Shedlock chimed in today with three questions he'd like to ask: "Don't you have to sell something to make payments? Can you sell something if it's frozen? Does it make any difference if the vote is oral versus written?" Mish also noted that the people still left in the fund who didn't withdraw will bear the brunt of the losses. See his article, Freeze Is On In Florida.
The tech sector dipped today with Dell (DELL) leading the charge. After a disappointing earnings report last night in which the computer maker commented on slowing demand for technology, it lost 13% during today's session. Research in Motion (RIMM), after a report from Piper Jaffray detailing slowing sales of the BlackBerry Pearl, traded down 6.8% today. Toddo followed this sector throughout the day on the Buzz and you can read about the possible sector-wide rotation out of tech in today's Random Thoughts.
Shipping giant FedEx (FDX) announced today it will raise its rates for ground shipping by an average of 4.9% during the 1Q of 2008, essentially matching the rate change made by its primary rival, UPS (UPS). According to the Wall Street Journal, earlier this month, skyrocketing fuel costs and flat freight volumes forced FedEx to lower its profit forecast for the current quarter and the full year. In today's Five Things, Prof. Depew notes that it's still probably cheaper to mail yourself home for the holidays rather than fly conventionally. Read about it here!
Enjoy the time off and we'll pick it up fresh and new on Monday!
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