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Week in Review: January 25, 2008

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A look back at the week that was...

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Market Recap

Markets opened sharply lower on Tuesday but were able to cut losses later in the session after the Fed announced a surprise 75 basis point rate cut. Also rattling investors Tuesday was tech bellwether Apple (AAPL) after it missed earnings expectations after the bell. After gaping down on Wednesday, the bulls made a stand, creating a tradable bottom especially given the oversold nature of the tape.

On a technical front, the SPX support now stands at 1270 with resistance lying at 1370. With the current volatile conditions investors will be looking for a clear direction in the market over the coming sessions, with all eyes on the pivotal Fed meeting next week. A rate cut of 25 basis points will be viewed with disappointment, while a cut of 50 basis points will receive a positive reaction.


The Four Sisters Performance




ETF Watch


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Top Headlines

The Fed made an emergency rate cut early Tuesday morning, taking 75 basis points off both the Fed Funds and Discount Rate. Rates now stand at 3.5% and 4% respectively. (1/22)

Markets pointed to another poor open on Wednesday as Apple pressured futures lower after missing Q1 earnings estimates. (1/23)

France's second largest bank, Societe Generale, shocked the public after announcing that a rogue trader had cost the bank over $7.1 bln in fraud. With the reputation of the bank now severely damaged, experts are now speculating about possible a possible takeover from competitors. (1/24)

Existing home sales fell 2.2% for in the month of December to an annual rate of 4.89 million, its lowest level in nine years. (1/24)

Congress and the White House agreed on an economic stimulus package in the face of looming recessionary fears this week. The plan calls for over 117 mln American families to receive tax rebates up to $1200 each. (1/24)


Earnings Snapshot

Bank of America (BAC) reported a 29% decline in 2007 net income. The CEO said that despite this past year's poor results, the company is cautiously optimistic about growth in 2008. (1/22)

Motorola (MOT) disappointed investors with their earnings report as the tech giant saw sales decline 38% from the same quarter last year. (1/23)

Capital One (COF) announced earnings of $1.6 bln for 2007, up from $2.4 bln in 2006. (1/23)

Microsoft (MSFT) reported an 81% rise in earnings for Q4. The company cited strong sales of windows software for their performance. (1/24)

Caterpillar (CAT) profit jumped 11% compared to the same quarter a year ago. The Dow component also confirmed its 2008 forecast of 5% to 15% growth. (1/25)


Market Movers: Winners & Sinners


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No positions in stocks mentioned.

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