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Week in Review: January 11, 2008

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A look back at the week that was...

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Market Recap

Stocks attempted to plant their foot this week but were once again met with volatility and lingering recessionary fears. AT&T (T) shook the Street on Tuesday after it announced weakness in its broadband segment as investors took this as a sign of overall economic weakness. Markets attempted to put in a bottom Wednesday as the four sisters shook off early weakness to rally into the close. Stocks received further support from Fed chairmen Bernanke as he stated on Thursday the FOMC was ready to react aggressively to deteriorating conditions.

On a technical stance SPX support now stands at 1378 with resistance at 1430. With so much bearish sentiment we expect to see a bounce in the four sisters over the coming sessions.
The week wrapped up with news of Bank of America's (BAC) purchase of Countrywide (CFC), and a major write-down from American Express (AXP). Investors should remain prepared as this volatile New Year shows little indication of slowing down.


The Four Sisters Performance




ETF Watch


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Top Headlines

Stocks plummeted in afternoon trading on Tuesday after AT&T (T) announced a softening in its broadband business. Investors took this as a broad indicator of current economic conditions, prompting a sharp sell off. (1/8)

Pending home sales fell 2.6% in November, displaying a continued weakness in the U.S. housing market. Home sales are now down 19.2% in the past year. (1/8)

Goldman Sachs (GS) announced Wednesday morning that it expects the U.S. economy to fall into a recession in 2008, with real GDP contracting by 1% in both the 2nd and 3rd quarter of the year. (1/9)

Federal Reserve Chairman Ben Bernanke said in a speech on Thursday that the Fed is standing at the ready to cut rates in the face of further economic weakness. Investors were pleased by the announcement, resulting in a midday rally on Thursday. (1/10)

Bank of America (BAC) announced that it would purchase Countrywide Financial (CFC) to create the nation`s largest mortgage lender. The deal will be financed entirely through $4 bln in stock. (1/11)


Earnings Snapshot

Family Dollar Stores (FDO) reported a 2.8% rise in earnings for the quarter ended December 1, as the company credits weakening economic conditions for increased store traffic. (1/8)

Great Atlantic & Pacific (GAP) pleased investors as they saw net income increase an astounding 41% to $57.3 mln. Shares were on the move higher after the announcement this week. (1/8)

KB Homes (KBH) suffered a $773 mln loss this past quarter as the homebuilder continued to struggle in a very bleak housing market. (1/8)

Mosaic (MOS) handily beat earnings expectations as the fertilizer company saw an EPS of 89 cents versus an expect 73 cents. (1/9)

Alcoa (AA) saw profits climb 76% in the face of rising costs. The Dow component benefited greatly from the sale of its packing and consumer business. (1/10)


Market Movers: Winners & Sinners


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