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Market Recap: Stocks Fight Off Financials, Markets Close Up


Stocks fought off the worries from the financials and rallied despite surging crude. Markets close higher.

Stocks fought off disconcerting news from the financial sector to rally late in the trading session. The Dow Industrials gained 117 points, or +0.87% to 13660, the S&P 500 gained +18 points, or 1.20% to 1520, and the Nasdaq composite gained +30 points, or +1.07% to close at 2825.

Major indexes fell in the early part of today's trading session. Concerns over asset quality continued to weigh on the minds of investors. Citigroup (C) extended its losses for the week, closing down -2.28%. The WSJ reported the banking giant failed to calm Wall Street's nerves, stating it could only estimate the number of write-downs the bank would need to take. This came as reports of the bank's structured investment vehicles (SIVs) stated they had already drawn $7.6 bln out of $10 bln in liquidity lines. Read Professor Shedlock's Citigroup Fighting For Its Financial Life.

Morgan Stanley (MS) was another victim in today's trading, losing -1.94% after an analyst estimated the investment bank would need to take down as much as $6 bln in write-downs. Other financials, however, recovered by day's end. Goldman Sachs (GS) finished +2.18%, Bear Stearns (BSC) added +2.09%, and Lehman Brothers (LEH) added +1.42%. For more context, read Toddo's Level III Assets Broken Down and Professor Depew's Special Five Things You Need To Know.

Energy stocks rose as crude oil reached new highs. Exxon Mobil (XOM) rose +3.10% to $90.38. The drillers also performed well with the Oil Service Index (OSX) rising +3.15%. Notable stocks include Transocean (RIG) and GlobalSantaFe (GSF) reaching new highs, both adding almost 5%. Halliburton (HAL) added +2.21%. Read Professor Adami's Exxon Mobil Moving With Crude.

In the tech sector, Yahoo (YHOO) CEO Jerry Yang made headlines testifying in front of a congressional committee apologizing and answering questions about doing business in China. Professor Macke stated on the Buzz he wasn't loving the price-action of this "back-from-the-dead dot-com name." Professor Udall, however, reaffirmed on the Buzz his bullish position and stated "I'll add more YHOO under $28.50 should the opportunity arise."

In commodities, crude oil finished +2.72 to 96.70. Toddo noted on the Buzz that the $100 level was more "a matter of time at this point" than if. Gold added +12.60 to 823.40. Silver surged +0.59 to 15.380, and copper finished +3.950 to 334.15.

For more summaries, please click on Minyanville's Buzz Bits and Professor Tuttle's Winners & Sinners.

Earnings Review

Blue Nile (NILE) reported 3Q $0.18 EPS versus $0.16 consensus; revenues rose to $67.4 mln versus $67.8 mln consensus. Company issued in-line guidance for 4Q with EPS of $0.40-0.45 versus $0.44 consensus and revenues of $109-115 mln versus $113.77 mln consensus.

Chesapeake Energy (CHK) reported $0.69 EPS versus $0.61 consensus on revenues $2.027 bln versus $1.923 bln consensus.

DryShips (DRYS) reported 3Q $2.38 EPS versus $2.34 consensus on revenues $150 mln versus $140.2 mln consensus.

Idea Flow

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: MOS, CF, TXCO, COST, BKC, MCD, CY, CSCO, FSLR, STP, DECK, SPX, gold

Some bearish trade or investment ideas: GOOG, NILE, TNH, C, LEH, MS, AAPL, BIDU, VMW, LVS. MA, YHOO, NILE, WYNN, WB, COF, SPWR

Have a great night, everyone! See y'all in the morning.
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