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Minyanville Market Recap: Deutsche Bank Admits To Huge Writedowns, Markets End Lower


Stocks were weak today. Deutsche Bank gained on the day even after disclosing huge writedowns. Homies continued to rally.

Stocks ended the session lower today. The Dow Industrials fell -0.56% to 13,968, the S&P 500 fell -0.45% to 1,539, and the Nasdaq Composite fell -0.61% to 2,103.

The morning started off with major banks continuing a trend in disclosing large write-downs. Deutsche Bank (DB) stated 3Q profits rose 13% while admitting to $3.1 bln in write-downs on fixed-income securities and loans used for leveraged buyouts. The markets looked at the transparency favorably as DB rallied throughout the day. DB ended the day up +1.28%. Not all financials received the same treatment, however. Bear Stearns (BSC) and Goldman Sachs (GS) lost almost 0.3% each, and Lehman Brothers (LEH) led to the downside losing -1.02%. Please read Minyan Peter's A Look Inside Citigroup's Writedowns for more context into the financial sector. Also continue to watch the levels of the BKX and XBD as Toddo noted in his Random Thoughts for today.

Homebuilders continued to add to their gains. The Philadelphia Housing Sector Index (HGX) finished the day up +1.53%. Rylan Group (RYL) added +5.0%, and Lennar (LEN) added +4.45%. Professor Sedacca reaffirmed his belief on the Buzz that the "homies could be putting in a bottom" and proceeded to watch the XHB.

In some other stock-specific action, a number of professors had been watching the iShares China 25 Index (FXI). Some couldn't resist shorting the ETF yesterday as it had gained over 75% since the August low. Professor Udall noted the ETF could lose another 20 points and still be considered in a strong bull trend. Nontheless, the trade proved to be a good one as FXI ended down -5.2%. Read Mr. Practical's article, The Reflation Game for some insight into the volatile Chinese markets. Also Have a look at Professor Depew's daily column Five Things You Need To Know for a humorous, yet informative look into the region.

Micron (MU) was another notable stock today. Toddo noted on the Buzz, "After trading up 12% into its earnings release, Micron has given more than half that back on the report. Professor Macke chimed in, saying "like the market and a fist-full o' others…[it] may have earned a little break in light of the rally it's put in lately." For more summaries of what happened on the Buzz, click on Minyanville's Buzz Bits.

In economic data today, the ADP jobs report showed an increase of 58,000 jobs in September, down slightly below the 60,000 forecast. ISM Services also came in at 54.8 vs. 55.0 cons.

In commodities action, crude oil fell below the $80 mark as the weekly crude inventories report showed an increase of 1,138 k barrels. Crude fell by $0.30 to $79.75 a barrel. Copper futures ended the day strong adding $4.25 to $375.35, a gain of 1.15%. And Gold fell $2.20 to $734.10. Please read Professor Lewis' new article What Will Gold Do Next for more insight into gold's future.

Below is a recap of some 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: EEM, CIEN, XHB, NSTK, BRCM, ISRG, ARAY, TTPY, CSGP, VMW, CHK, NBI, MSFT, HGX

Some bearish trade or investment ideas: INTC, FXI, BKUNA, WYNN, BIDU, LVS, ZNH, LDK, CF, TEX, RTI

For tomorrow, investors will be looking at initial claims numbers to be released at 8:30 AM EST and Factory Orders figures at 10:00 AM EST. Click here for the full weekly trading radar.

Check out Hoofy & Boo's new video if you haven't had the chance. Also check out our new book recommendations by our Minyanville professors. We hope you had a great day. Good night, Minyans!
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