Minyanville's Market Recap: Stocks End Down Except Tech Heavy Nasdaq
Tech Markets shined today pushing up the Nasdaq. Financials and other stocks suffered.
Tech stocks were the bright spot of the day allowing the tech-heavy Nasdaq to push higher. Apple (AAPL) which has performed well all week gained 1.86%. Cisco (CSCO) added 1.48%, and Intel (INTC) added almost 1%. Professor Katz talked about tech stocks and mentioned these companies and described a possible sector rotation in Breaking Down The Tech Sector.
Financials were dealt another blow this morning as a Lehman analyst (LEH) cut estimates of Goldman Sachs (GS), Morgan Stanley (MS), Merrill Lynch (MER), and Bear Stearns (BSC).
Compounding the problem late in the day, Bear Stearns appeared on the headlines as a judge denied U.S. bankruptcy protection. The ruling is interpreted to basically open up all hedge funds to lawsuits (From Bloomberg)
Barclays (BSC) was reported for the second time in less than two weeks to utilize the Bank of England's standing lending facility, typically a method of late resort for expensive funding. The controversy led Barclays to defend itself saying the method was used due to a technical breakdown as can be the case occasionally.
Thornburg Mortgage (TMA) also made headlines with its decision to raise $500 mln through a sale of convertible preferred stock. Professor Zucchi mentioned on the Buzz and Banter, "there seems to be a rather large disconnect between Thornburg Mortgage stock/preferred stock, and the debt. Either the former is screaming a buy, or the latter is overpriced." Have a look at what started it all by clicking on our Subprime Slime package for in-depth coverage of all the subprime issues. In addition, Professor Depew gives great insight in his daily Five Things You Need To Know by clarifying the term "credit crunch."
Today's economic data didn't seem to affect the markets too much. GDP figures came in slightly below consensus at a 4% annual rate and initial claims came in at 334 k vs. 320 k with the prior revised upwards by 3 k to 235 k. Markets shook off the data as it seemed to be more focused to tomorrow's speech by Fed Chairman Ben Bernanke. Other events on the radar are as follows:
8:30 Personal Income: 0.3% cons
8:30 Personal Spending: 0.4% cons
8:30 Core PCE Inflation: 0.2% cons
9:45 Chicago PMI: 53.0
10:00 Factory Orders: 0.9%
10:00 Mich Sentiment-Rev: 84.0
Below is a recap of some of the idea flow on today's Buzz and Banter. Please note that stocks may appear on both bullish and bearish categories due to long and short term trades by our many Minyanville professors. In addition, please click on our Buzz Bits for more detailed summaries that occurred real-time during today's trading session.
Some bullish trade or investment ideas: HD, AAPL, NMX, ICE, CME, OIH, XLE, VRTX, UA, ILMN, SYNA, CIEN, TLAB, AAPL
Some bearish trade or investment ideas: MA, COP, XOM, MOR, VLO, UPL, APA, CHK, SWN, RIG, SLB, HAL, MIND, DWSN, FMD
There's one more day till the weekend. Tomorrow is a pivotal day before the 3 day weekend. Before you sleep, have a look at Professor Cooper's article Bulls' Hope Springs Eternal as he warns "follow through is key." Have a good night, Minyans!
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