Minyanville's Market Recap: Housing Ugly, Financials Get Pulled Down, Markets Still Gain
Markets gained but the picture is still not pretty. Foreclosures pull down Housing and Financials
As the health of the nation's economy is the main focus, investors were nervously watching for signs of consumer spending in some of the largest retailers. Wal-Mart (WMT) helped boost the bullish sentiment by reporting better-than-expected sales figures. The world's largest retailer reported August same-store sales increasing by 3.1% vs. its previous predictions of 1-2%. Read more retail analysis with Professor Macke's The Shopping Bag.
Home builders and financials took a beating as a report by the National Association of Realtors showed the number of Americans who may lose their homes to foreclosure rose to a record in the second quarter. In addition late payments by subprime borrowers surged to one out of every seven loans. (From Bloomberg) Hovnanian (HOV) led the way with a loss of -3.7%, followed by Meritage (MTH) -2.4%, and Ryland (RYL) losing -2.7%. Among the financials, Bear Stearns (BSC) lost -1.1%, Lehman Brothers (LEH) lost -0.9%, and Merril Lynch (MER) lost -0.4%. For more analysis, please read Professor Depew's Five Things You Need To Know.
In the tech sector, Apple (AAPL) made headlines as chief executive Steve Jobs issued a letter apologizing after numerous complaints of yestereday's price cut on the iPhone. Jobs stated consumers who bought the iPhone would receive a $100 credit. Professor Udall stated on the Buzz and Banter that this was an excellent response by management and the sell-off presented a good entry point. Read more of what happened on the Buzz with our Buzz Bits. In addition, read Toddo's Morning Round-Up as it summarizes this morning's events.
In economic data today, Initial claims came in better than expected at 318 k vs. 330 k cons. The prior week was revised to 337 k from 334 k. Crude inventories data was released a day late due to Monday's Labor Day holiday. Inventories came in at -3,975 k vs. -2,200 k consensus.
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 short and long term trades by our many Minyanville professors.
Bullish trade or investment ideas: AAPL, ZUMZ, JASO, ASTI, FSLR, GLD, XMSR, TASR, MDVN, COST, JWN, CELG, SSRI, JNPR, ABX, TSO
Bearish trade or investment ideas: AAPL, WMT, CFC, CPU, GOOG, TEX, UA, FMD, TIBX, CSGP, GRMN, MA, AZO, RYL, KFY
Tomorrow's Friday, Minyans. Make sure you review through Minyan Peter's Minyan Mailbag before coming back to work tomorrow as he warns that this is an entirely different market. Rest up! See you bright and early!
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