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Minyanville's Market Recap: Stocks Fall, Housing, Financials Paint Ugly Picture

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Stocks fall, Financials and housing led the way in today's slow trading day.

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Stocks declined in what was a relatively slow trading day. The Dow lost 56.74 points to finish at 13,322, S&P lost 12.6 points to close at 1466, and the Nasdaq lost 13.89 points to finish at 1947.

The decline in the S&P was largely led by the financial sector. The bearish sentiment was due to Lehman Brothers (LEH) shooting itself in the foot publishing a report downgrading Countrywide's (CFC) estimates. In downgrading Countrywide's preferred stock, Lehman cited "continued extraordinary weakness in secondary market pricing for non-conforming loans…" Lehman's stock closed down over 4%. Other notable laggards were JPMorgan (JPM) down 2.3%, Bear Stearns down over 4%, and Goldman Sachs (GS) down almost 1%. Please have a look at Toddo's Random Thoughts as he warns of the performance of the financials.

The homebuilders took a large beating today as well. A report of existing home sales declined 0.2% during July, and the national median selling price slipping further, another 0.6% on a y/y basis. In addition, Reuters reported that job losses due to continued weakness in housing could number as much as 1 mln. Among the carnage were Meritage (MTH) losing 9%, D.R. Horton (DHI) losing 5%, and Ryland (RYL) finishing down 6.5%. For more insight, please read Professor Depew's Five Things You Need To know.

Home Depot (HD) was another story that weighed heavily on the minds of Wall Street. More details of the sale were released today showing Home Depot agreed to an $8.5 bln figure, 18% less than previously negotiated. Please read Professor Ford's The Liquidity Addiction for more of an understanding of today's market behavior.

In some merger news, U.S. Steel (X) agreed to acquire Canadian steelmaker Stelco for $1.1 bln. Analysts expect the deal to strengthen U.S. Steel's position in North America. (From WSJ).

Below is a recap of the idea flow on today's Buzz and 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 please click on our Buzz Bits for more in-depth summaries of what happened real-time during today's trading session.

Some Bullish trade or investment ideas: SYNA, IOM, ANAD, SPX, AOB, ESRX, BIOS, MO, NILE, RHB

Some Bearish trade or investment ideas: XLV, PPH, IYR, OIH, BKX, CFC, AAPL, MA, FLS, BCSI, TOFC, PSA, FXI

The tape is expected to be thin all week. Toddo warns to trade light when eating thin mints. In addition always be wary of market sentiment as Professor Katsenelson warns in his article, Why Good Companies Aren't Always Good Buys. Have a good night, Minyans! See you bright and early tomorrow morning!
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.

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