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Buzz Bits: Dow and Nasdaq End Lower

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Your daily Buzz & Banter highlights.

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Bell Buzz! - Todd Harrison - 3:36 p.m.

  • Minyan David asks "With Bank of America (BAC) trading recently at $37.10, each share of Countrywide (CFC) would be would be worth $6.76 if the deal closed today. CFC is trading at a 25% discount to where it will when the deal closes in the 3rd quarter. Seems to me that the market is saying that the deal doesn't get done?" I don't have an answer off the top of my head but it's a worthy question to ask.

  • You know what stock trades dry? Wachovia Bank (WB). All day long.

  • Tapes that are weak all day (with 2:1 negative internals) tend to end that way. The lack of improvement in market breadth (during the Snapper attempt) was the tell-tale sign that it was time to cut bait on a trading basis.

  • We can discuss how the structural machination got to this point until we're blue in the face (cumulatively, with some greed sprinkled in). The truth, right here and right now, is that hundreds of trillions of dollars tie together ever-changing underlying collateral assets moving in many directions at the same time.

  • It's virtually impossible--yes, impossible--to know how far the fuse runs, which is why such massive two-sided risk remains. It's also why guys like Jeff Immelt, Stan O'Neal, Chuck Prince and Warren Specter didn't see the fuse lit in the first place and by the time they did, the multiplication of risk made it impossible to stamp out.

  • Wow, another 70-odd points and the entire Tuesday "we're out of the woods!" rally will have been shoved back in the woods. As a wise man once said " Hope is a dangerous thing. Hope can drive a man insane." It's no coincidence that that man was named Red.

  • Fare ye well into the bell, Minyans, and remember that risk is a two-sided discussion.

    R.P.

Position in WB


The General Pain Spreads - Jeff Macke - 1:21 p.m.

Hello from New York where, no, I don't have any type of stock agreement with my "other employer"; a relationship that bothers me some days more than others. Here's what else I'm watching as I wait for Masters coverage to begin:

  • Want another reason not to love the long side? How about this: the S&P has dropped more than 5% in the one month "reporting season" for each of the last three quarters. We're down 2% for this week which marks the kick-off of Q1 reporting.

  • U of Michigan consumer sentiment falls to the lowest level since 1982. Making matters worse for the Wolverines, the UM hockey team was eliminated from the Frozen Four by Notre Dame last night. Yup, Notre Dame is now a hockey school.

  • Airline stocks continue to rally as more and more flights get canceled. With the airline business model it seems to me that grounding the entire fleet would send AMR Corp. (AMR) to about $100 per share. Barring that fleet grounding, I regard an open market as a chance to sell airline stocks.

  • Specialty retailers are giving back yesterday's gains today after some downgrades that seem rather timely to me. Abercrombie (ANF) and others are on the hit parade. I've said it before, I'll say it again: I'll take Costco (COST), Wal-Mart (WMT) and Home Depot (HD) against the rest of the retail field for 2008.

With that I'm off to don the shirt and tie for my last show of the week. Make it a great and safe weekend, Minyans. We'll see you back here on Monday.



The Friday Ticks - Quint Tatro - 11:06 a.m.



What I like:

  • Financials and Transports have turned green as noted by the XLF and IYT.
  • Solars are catching a speculative bid.
  • China momentum is seeing the same bid.
  • It's Friday.

What I don't like:

  • Breadth is over 2-1 negative.
  • We're less than two hours in.
  • General Electric (GE) lowering guidance.

What I've done:

  • Took some Wachovia (WB) and flipped some into the pop.
  • Added some Alternative Energy ETF (GEX).
  • Took Research in Motion (RIMM) April 120 Calls (will sell into strength for sure).
  • Had WAY too much coffee.

What I'm watching:

  • Ags: Agrium (AGU), Monsanto (MON), Terra Nitrogen (TNH) all look god and may be starter worthy.
  • XLF, GEX, RIMM calls, AGU



No Signs of Slowing? - Minyan Peter - 10:38 a.m.

Financials are holding up far better than you might think given the General Electric (GE) news - and as I write, Citi (C) is up more than a point. And the SKF is now trading below yesterday's high.

To me the most interesting comment out of GE was "Oil and Gas, Energy, Transport and Aviation all had double digit profit growth - with no signs of slowing." Maybe I'm twisted but whenever I hear "no signs of slowing" my ears perk up - particularly contrasted with the news over the past two weeks of four U.S. airline bankruptcies and weakening U.S. consumer demand for gasoline.

In summary - feels to me like it a whole lot of bad news has already been priced into financials right now, but nothing is priced into a potential slowdown in energy.

Position in DUG, DUG options


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