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Minyanville's Market Recap: Stocks Fall On Investment Bank Earnings, Bernanke/Paulson Combo Fail To Convince Investors

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Stocks fall on earnings reports from Goldman and Bear. Markets were unconvinced by Bernanke and Paulson

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Stocks failed to follow through today. The Dow Industrials lost -0.35% to 13,766, the S&P 500 lost -0.67% to 1,518, and the Nasdaq Composite lost -0.46% to 2654.

Investors had been waiting all week to see results from the investment banks. The remaining two, Goldman Sachs (GS) and Bear Stearns (BSC), reported with mixed results. Bear Stearns missed expectations with 3Q EPS coming in at $1.16 vs. $1.78 con and revenues of $1.13 bln vs. $1.64 bln cons. Goldman Sachs beat estimates with 3Q EPS of $6.13 vs. $4.37 cons. Revenues came in at $12.33 bln vs. $9.57 bln cons. Goldman's stock popped up on the open; however, Toddo was not impressed as he mentioned on the Buzz, "my inclination is to nibble on some puts for a pure trade…." Get more insight into this trade in his Random Thoughts: Playing Poker With Hank Paulson.

Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke both appeared before the House this morning to testify on the state of the financial system. Both maintained the current state was "relatively strong" despite recent market turbulence. Professor Depew wondered what economy they were referring to. Please read his Five Things You Need To Know for more on Bernanke and Paulson's testimony. In addition Professor Reamer provides great color on the event with his article Bernanke Stumped By Representative Ron Paul.

Gold was a hot topic on the Buzz today in addition to the dollar making new lows. Mr. Practical noted "when the central bank creates too much "fake" money (credit), real money (gold) rallies." As investors began to wonder whether gold was beginning to be a crowded trade, Professor Lewis reaffirmed his bullish stance on the precious metal citing ASA Ltd. (ASA), a closed-end fund, trading 15% below its NAV.

Also on the Buzz, Dr J took note of Q Logic (QLGC) mentioning unusual options activity. There were earlier rumors of EMC (EMC) "kicking the tires over" the company which caused a spike. Professor Udall first mentioned this stock the other day in his article Harmonic Rising To The Occasion In Tech.

For more summaries of what happened on the Buzz and Banter, please click on our Buzz Bits.

In economic data, weekly initial claims came in less than expected at 311 k vs. 321 k cons. Leading Indicators fell -0.6% vs. 0.0% cons and the Philadelphia Fed was reported at 10.9 vs. estimates of 2.6.

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.

Some bullish trade or investment ideas: CMCSA, VZ, CTXS, GLD, SLV, QLGC, ASA, T, HUM, AKAM, BRCD, GFI, XAU, TXN, ANAD, BRCM, M

Some bearish trade or investment ideas: GS, MS, HGX, SPX, PIR, SHRP, DXY

Tomorrow's radar is light with only Novamerican Steel (TONS) reporting before the bell. There are no economic events scheduled.

It's Thursday night, one of the best nights of the week. Be safe and Have a good night! Wooha!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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