Minyanville's Market Recap: Credit Worries And Housing Data Take Out Stocks
Credit worries and housing took down stocks. Even Apple's new iPod failed to impress!
After a strong day yesterday, financials took a tumble with Citigroup (C) renewing concerns in the credit markets. The morning started with speculation that Citigroup had as much as $100 bln in conduit exposure. (From WSJ) Citigroup traded down -2.56% with other financials performing just as badly; Morgan Stanley (MS) down 2.14%, Bear Stearns (BSC) down -4.5%, and Goldman Sachs (GS) down -1.6%. Please read Professor Katz' Minyan Mailbag: Three Reasons Credit Levels Will Stay High.
New home sales continued to paint a bleak picture. Month over month figures came in at -12.2% vs. consensus estimates of -2.2%. Later in the day, Senate Banking Chairman Christopher Dodd issued a proposal for legislation shifting more responsibility on mortgage brokers and banning prepayment penalties, requiring escrow, amongst other things. Read Professor Shedlock's More "Ideas" To Fix Housing as he gives his insights on this controversial topic.
The Fed's Beige book was released this afternoon, addressing the effects of the recent credit turmoil but maintaining that it was limited. The Fed also acknowledged that economic activity continued to expand with credit being available to most consumers and firms. Given that all of Wall Street is pondering the Fed's next move, it is worth reviewing through Professor Tafel's Why The Fed Is Stuck.
Apple (AAPL) made headlines today unveiling a new iPod with touchscreen features and Wi-Fi Internet capability. The company also said it partnered with Starbucks (SBUX) to offer free service of the iTunes digital music stores while at participating Starbucks. In addition, Apple CEO Steve Jobs revealed a price cut of $200 lowering the 8GB iPhone from $599 to $399. The stock plunged as investors were concerned about its ability to meet the previous target of 1 mln phones by the end of September. Apple finished down -5.4%. Professor Udall acknowledged the sell-off given the overall pressure in the market yet remained bullish on the stock. For more ideas on other tech stocks, have a look at his 21 Bullish Predictions For Tech.
Below is a recap of the idea flow on today's Buzz & 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, click on our Buzz Bits for more in-depth summaries of what happened real-time.
Some bullish trade or investment ideas: CFC, YHOO, EBAY, AMZN, AAPL, BIDU, AMGN, ALVR, NVT, DTSI, INTC, MRVL, IBB, BRCM, SYNA.
Some bearish trade or investment ideas: GRMN, GS, SPX, CROX, FFIV
It was a hectic day. Make sure you watch Hoofy and Boo's hilarious new video to help you unwind! Have a good night, Minyans! See y'all bright and early!
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