Minyanville's Market Recap: A Bear Push Lifts The Markets?
Markets were lifted late in the day as Buffett was rumored to be interested in Bear Stearns.
Rumors of various parties interested in Bear Stearns (BSC) helped give a lift to Financials for much of the day. Late in the day, the NY Times broke the news that Bear Stearns was in serious talks with legendary investor Warren Buffett. Although fading in the last minutes before the bell, the stock surged over 11% on the story. Toddo warned Buzz readers, "…the last time we heard this chatter, it was in Hovnanian (HOV). And after the initial, euphoric spike, we all know what happened to the homies." Bear Stearns finished with a +7.6% gain. Other notables include Goldman Sachs (GS) gaining +1.7%, Lehman Brothers (LEH) gaining +1.8%, and Morgan Stanley (MS) gaining +2.6%. Click here to read the rest of Toddo's thoughts in The Bear Stare.
Not all financials were positive today. Goldman Sachs released a note revising Merrill Lynch's (MER) estimates to the downside. The firm cited a possibility in Merrill's quarter for "multibillion-dollar losses" due to turmoil stemming from this summer's credit, subprime, and liquidity crisis. MER lost -0.51% for the day. Read Minyan Peter's latest Financial Services Highlights: The Race Is On as he gives an update on the sector.
Bears failed to take the market even as economic data released this morning showed signs of a slowing economy. Durable orders declined greater than economists had expected. Durable Goods fell -4.9% vs. consensus estimates of -4.0%, while Durable Goods Orders less transportation fell -1.8% versus a consensus of -1.0%. Professor Katz noted on the buzz, "I can see there's a lot of frustration on the short side," and emphasized "there seems to be little attention being paid to the GDP number schedule for tomorrow and estimates for a 3.8% annualized growth." Professor Sedacca agreed, chiming in with "a market that disregards the economic numbers (awful) and embraces Buffett… is not sound footing."
Gold continued its decline falling $3.30 points to $735.00. Sentiment was depressed in part by Newmont Mining (NEM) announcing costs would be higher than expected again. Professor Michael said it was a pretty negative statement but emphasized his commitment to the sector by including Goldcorp (GG), Pan-American (PAAS), Golden Star (GSS) and Gold Fields (GFI) on his shopping list. Our Gold specialist Professor Lewis also reaffirmed his commitment on Newmont, stating the announcement by the company was simply "news" and "not a warning." Professor Lewis viewed the weakness as a good opportunity to add to the position.
Oil futures also moved higher even as the weekly crude inventories report showed a gain in inventories of 1.8 mln versus estimates of -2.15 mln. Professor Michael noted crude's strength and warned Buzz readers not to game the weekly report. "I can't tell you how many people ask me each week why the reason for the constant bid in crude… I'm sure it will become all too obvious in a few months." For more in-depth summaries of what happened on our Buzz & Banter, please click on our Buzz Bits.
For tomorrow's trading session investors will have more hints on the health of the economy. See below for the preview and click here for the full trading radar.
8:30 Chain Deflator-Final: 2.7% cons
8:30 Initial Claims: 311 k previous
10:00 Help-Wanted Index: 24 cons
10:00 New Home Sales: 830 k cons
Below is a recap 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: RHT, FIG, HOKU, VRTX, YHOO, OPTM, INFN, NEM, AMLN, NHWK, AAPL, SHW, GG, PAAS, SLW, GSS, GFI, RVBD
Some bearish trade or investment ideas: SPX, GS, AAPL, GOOG, BIDU, NEM, LEH, MS, DFS, RIMM, CROX
Oy, Minyans! Seemed like a pretty long day. We hope you had a laugh with Hoofy & Boo's new video. We'll see you bright and early in the morning. Goodnight!
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