3SOF

RIM Rips Nasdaq; Citi, GM Gouge Dow.......

Thursday...6/26/2008


Stocks in New York continued to sink early Thursday as a disappointment from Research In Motion (RIMM:Nasdaq) and a downgrade of banks brought out the sellers.

The Dow Jones Industrial Average was sliding 130 points to 11,681, and the S&P 500 was down 16 points at 1306. The Nasdaq lost 42 points to 2359.

Weighing on the tech sector was RIM, which said after the last close that it didn't meet first-quarter expectations before then offering a soft outlook. Shares of the Blackberry maker were down 10%.

Similarly, business software seller Oracle (ORCL:Nasdaq) dropped 3.6% after its outlook failed to impress investors. Fourth-quarter results were good, but looking to the current quarter, Oracle cautioned that comparisons would be difficult.

Elsewhere, the financial sector was again in focus, in part because Goldman Sachs lowered its ratings on U.S. investment banks to neutral from attractive, a report said. Goldman added Citigroup (C:NYSE) to its "conviction sell" list, predicting $8.9 billion in second-quarter writedowns for Citi. Shares were dropping 5%.

Merrill Lynch (MER:NYSE) could be under pressure during the session after Bernstein cut its estimates on the brokerage, citing concerns about more writedowns.

The financial sector was suffering broadly at the hands of the downgrades. Capitol One (COF:NYSE) and Barclays (BCS:NYSE) were hit especially hard, down as much as 5% in early trading.

Goldman didn't stop with the financials, also lowering its opinion of General Motors (GM:NYSE) . Losing 11%, GM, along with fellow Dow component Citi, led the index downward.

Among the new Day's earnings, Lennar (LEN:NYSE) , the nation's second-largest homebuilder after D.R. Horton (DHI:NYSE) , reported another quarterly loss, although a narrower one than in the year-ago quarter. Prices for homes, along with orders, fell off.

Packaged food maker ConAgra (CAG:NYSE) also beat on earnings thanks to a solid performance by its trading and merchandising business, but delivered guidance that fell below consensus estimates.

Separately, a report in The Wall Street Journal said Budweiser maker Anheuser-Busch (BUD:NYSE) is set to turn down InBev of Belgium's $46 billion takeover attempt. Instead, the company will try to sell some assets to help lift its stock price.

Tire supplier Goodyear (GT:NYSE) announced this morning that it would attempt to cut costs by more than $2 billion by 2009 and work to capitalize on global growth opportunities.

In one bright spot, gold miners Kinross (KGC:NYSE) and Goldcorp (GG:NYSE) led a rally in the materials stocks.

As for the data, the government issued its final reading on first-quarter gross domestic product, saying the economy grew 1% between January and March. That met estimates and was slightly above the 0.9% preliminary figure. Weekly initial jobless claims were little changed at 384,000, but were about 9,000 more than expected.

The National Association of Realtors said existing home sales rose to an annualized rate of 5 million from 4.9 million in April. Updated from 9:40 a.m. EDT

Commodity prices were for the most part higher. Oil was up $3.97 at $138.52 a barrel, and gold was jumping $31.20 to $913.50 an ounce. The dollar was down against the euro, the yen and the British pound.

Long-dated Treasury securities were rising slightly, with the 10-year up 10/32 in price, yielding 4.06%, and the 30-year bond adding 10/32 to yield 4.62%.

Overseas, most major markets fell. In Europe, London's FTSE and Frankfurt's DAX each surrendered more than 1.8%. Tokyo's Nikkei and Hong Kong's Hang Seng also pulled back.

Bank Downgrades, Tech Weakness Crush Stocks....... 


Into the close...Thursday...6/26/2008


U.S. equities plunged Thursday as analyst downgrades of the financials, weakness in technology shares and record-high oil prices drove fear into investors.

The Dow Jones Industrial Average forfeited 358 points, or 3%, to 11,453, its lowest level in more than a year. The S&P 500 was slumped 39 points, or 2.9%, to 1283, and the Nasdaq plummeted 80 points, or 3.3%, to 2321.

Partly to blame for the selloff was the financial sector, a downturn spurred after Goldman Sachs lowered its ratings on U.S. investment banks to neutral from attractive. Goldman added Citigroup (C:NYSE) to its "conviction sell" list, predicting $8.9 billion in second-quarter writedowns for Citi. Shares were dropping 5%, reaching a 10-year low.

Merrill Lynch (MER:NYSE) also sold off after Bernstein cut its estimates on the brokerage, citing concerns about more writedowns.

Other hard hit names included Capital One (COF:NYSE) and Barclays (BCS:NYSE) , both down more than 5% each in recent trading.

The selloff in equities was accompanied by soaring commodity prices. Oil reached an intraday record of $140.05 a barrel and was recently up $4.84 at $139.39. Gold was jumping $34.70 to $917 an ounce. OPEC president Chakib Khelil said that oil could surge beyond $150 a barrel, while Libya announced a potential reduction in its oil production. The dollar was down substantially against the euro, the yen and the British pound.

"Today is kind of wacky," said Phil Roth, chief technical market analyst at Miller Tabak. "The dollar is getting blasted. I can't find a commodity that's down."

"The market is telling the [Federal Reserve] they must raise interest rates," said Paul Mendelsohn, chief investment strategist at Windham Financial. He said Chairman Ben Bernanke needs to refocus on dollar strength. Doing so, Mendelsohn said, will knock short-dollar, long-commodities speculators out of the market and bring prices down. "If [speculators] keep going in that direction, they're going to stall out the economy."

The Federal Reserve had decided Wednesday to leave the fed-funds rate at 2% while signaling that inflation risk was increasing, but the prospect of slowing growth had diminished somewhat. Mendelsohn said that was the wrong move.

Unless the Fed can stop commodity prices, they can't stop this problem, said Mendelsohn. He said the dollar is approaching important support levels and can fall much further if it breaks support. "They have nothing to lose by trying a different approach," he said. "Hard times require tough action. The market is telling me ''this isn't going to be good.''"

The broad selloff is due to analysts'' reduced expectations for the financials'' second-quarter earnings, said Stuart Freeman, chief equity strategist at Wachovia Securities. "Obviously investors have been selling this news over and over again for at least a year now," he said. Freeman predicted a bottom for the market in the coming month as investors begin to look ahead to 2009 and a return to profitability. "It's going to be a slow, u [-shaped] trudge back out of this," he said.

Goldman also lowered its opinion of General Motors (GM:NYSE) . Losing 10%, GM, along with fellow Dow component Citi, led the index downward. Every Dow stock was losing ground.

Weighing on the tech sector was Research In Motion (RIMM:Nasdaq) , which said after the previous session's close that it didn't meet first-quarter expectations before then offering a soft outlook. Shares of the Blackberry maker were down 13%.

Similarly, business software seller Oracle (ORCL:Nasdaq) dropped 3% after its outlook failed to impress investors. Fourth-quarter results were good, but looking to the current quarter, Oracle cautioned that comparisons would be difficult.

"The recovery from the March lows to the May highs was a bear-market rally," said Roth. "I'm expecting another downleg." In a rally, he said, a decline in stock price should be followed by a decline in commodity prices, then a decline in long-term interest rates. "We're in step one" of that process, he said.

For the new Day's earnings, Lennar (LEN:NYSE) , the nation's second-largest homebuilder after D.R. Horton (DHI:NYSE) , reported another quarterly loss, although a narrower one than in the year-ago quarter. Prices for homes, along with orders, fell off.

Packaged food maker ConAgra (CAG:NYSE) also beat on earnings thanks to a solid performance by its trading and merchandising business, but delivered guidance that fell below consensus estimates.

Separately, a report in The Wall Street Journal said Budweiser maker Anheuser-Busch (BUD:NYSE) is set to turn down InBev of Belgium's $46 billion takeover attempt. Instead, the company will try to sell some assets to help lift its stock price.

Elsewhere, Countrywide Financial (CFC:NYSE) shareholders approved a $4 billion buyout of the company by Bank of America (BAC:NYSE) . Countrywide is also facing legal action related to its mortgage lending practices from California, Illinois and Washington State.

Internet company Yahoo! (YHOO:NYSE) announced a major reorganization as it seeks direction after rebuffing a takeover bid from Microsoft (MSFT:Nasdaq) .

In one bright spot, gold miners Kinross (KGC:NYSE) and Goldcorp (GG:NYSE) led a rally in the materials stocks.

Middling economic data failed didn't improve the situation. The government issued its final reading on first-quarter gross domestic product, saying the economy grew 1% between January and March. That met estimates and was slightly above the 0.9% preliminary figure. Weekly initial jobless claims were little changed at 384,000, but were about 9,000 more than expected.

The National Association of Realtors said existing-home sales in May rose to an annualized rate of 5 million from 4.99 million in April. The median price of an existing-home dropped 6.3% year over year to $208,600.

Long-dated Treasury securities were rising, with the 10-year up 15/32 in price, yielding 4.04%, and the 30-year bond adding 20/32 to yield 4.60%.

Overseas, most major markets fell. In Europe, London's FTSE and Frankfurt's DAX each surrendered more than 2%. Tokyo's Nikkei and Hong Kong's Hang Seng also pulled back.

Sellers were firmly in control. Decliners were beating advancers 11-to-1 on the New York Stock Exchange and 7-to-1 on the Nasdaq.

Overnight U.S. Stock News......

June S&Ps this morning are trading slightly higher by +2.00 points on some short-covering after yesterday's steep decline. The US stock market yesterday sold-off sharply and closed near its low (Dow -3.03%, S&P 500 -2.94%, Nasdaq Composite -3.33%).

Bearish factors for stock prices yesterday included (1) the sell-off in the brokerage sector after Goldman Sachs downgraded US brokerages to "neutral" from "attractive," saying the pace of deterioration in the industry "appears to be far worse" than it originally anticipated, (2) the +$5.09 spike in crude oil prices to a record high, (3) the -6.3% loss in Citigroup to its lowest price since 1998 after Goldman Sachs put the biggest US bank by assets on its "conviction sell" list, (4) the 13% tumble in Research in Motion after the company said Q2 earnings will be as low as 84 cents a share, below analysts estimates of 92 cents a share and said they face inceased competition when Apple releases a faster, cheaper iPhone model next month, and (5) the -11% fall in GM to its lowest price since 1974 after Goldman Sachs downgraded the world's largest automaker to "sell" from "neutral," saying the automaker's shares will continue to fall as the sales outlook worsens amid record f uel prices, declining consumer confidence, and tighter credit conditions.

Bullish factors for stock prices yesterday included (1) the rally in gold producers after the price of gold surged to a 1-month high on inflation fears, (2) the +5.9% gain in Parexel International after the provider of research for drugmakers was upgraded to "buy" from "hold" by analysts at Natixis Bleichroeder, and (3) the +4.3% rise in Bed Bath & Beyond as the largest US home-furnishings retailer reported better-than-expected quarterly profit on higher sales of bedding and dishes.

Exxon Mobil (XOM) and ConocoPhillips (COP) are both slightly higher by +0.1% this morning as crude oil posted new record highs.

Accenture (ACN) rallied 2.2% in after-hours trading yesterday after the company announced that its fiscal Q3 earnings were up +36% and raised its full-year guidance due to new outsourcing customers.

The Andersons (ANDE) is likely to show some strength today after the company raised its full-year EPS guidance to $4.40-4.80 from $3.65-4.00 due to improved results from its plant-nutrient unit.

Palm Inc (PALM) is down -2.6% in European trading this morning after the company reported a Q4 loss ex-items of 22 cents a share, which was a larger loss than the market consensus of 18 cents.

AK Steel (AKS) rallied +4.1% in after-hours trading yesterday after S&P said that the steel-maker would replace Countrywide in the S&P 500 as of the close of trading on June 30

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Today's U.S. Market Focus.......

September 10-year T-notes this morning are trading -1.5 ticks on the slightly higher trade in S&Ps. September T-notes yesterday moved higher throughout the day and closed up +28 ticks at a 2-1/2 week high. Bullish factors for T-note prices yesterday include (1) flight-to-quality as the S&P 500 tumbled to a 3-1/4 month low, (2) the exceptional $20 billion 5-year T-note auction that saw the highest demand in 8 months, (3) comments from Fed Vice Chairman Kohn that "higher headline rates of inflation have shown only a few tentative signs of embedding themselves in core inflation or in longer-term inflation expectations," and (4) the rise in weekly continuing unemployment claims to a 4-1/3 year high. Bearish factors for T-note prices yesterday include (1) the unexpected revision up in Q1 core PCE (+0.2 to +2.3% q/q), and (2) a slightly better than expected May existing home sales report (+2.0% to 4,99 mln versus expectations of +1.2% to 4.95 mln).

The dollar is mixed this morning with the dollar/yen down -0.43 yen and the euro/dollar down -0.09 cents. The dollar index yesterday sold-off and closed at a 2-1/2 week low. Bearish factors for the dollar yesterday included (1) the rally in the yen to a 2-week high on unwinding of carry-trades due to the sharp sell-off in the stock market, (2) the rally in the pound to a 7-week high after BOE Governor King said policy makers will do what is needed to stem inflation, (3) euro strength after May German import prices rose by the biggest monthly amount (+2.4% m/m) in over 17-years, and (4) the rise in US continuing unemployment claims to a 4-1/3 year high. Bullish factors for the dollar yesterday include (1) the drop in June French consumer confidence to its lowest level since the series began in Jun 1998, and (2) the upward revision in US Q1 GDP and Q1 core PCE.


August crude oil prices this morning are trading +$1.27 at $140.91 a barrel and August gasoline is trading +1.99 cents a gallon. August crude oil prices yesterday rallied sharply and closed up +$4.45 a barrel and August gasoline closed +6.61 cents a gallon. Aug crude posted an all-time high of $140.39 a barrel yesterday. Bullish factors for crude oil prices yesterday include (1) the comments from OPEC's President that crude oil prices may reach $170 a barrel this summer if the ECB hikes interest rates and the dollar weakens and that a disruption of Iranian crude oil production could push over $200 a barrel to possibly $400 a barrel, (2) the comment from Libya's top oil official that it may cut production in response to a US law that allows terror victims to seize assets of foreign governments as compensation, and (3) the sell-off in the dollar to a 2-1/2 week low.

Top Stories
Consumer Confidence Falls to 28-Year Low


Reuters
Consumers' mood grim in June: survey
Friday June 27, 10:01 am ET


NEW YORK (Reuters) - consumer confidence fell more than expected in June, hitting another 28-year low as surging prices and mounting job losses sapped sentiment, according to a survey released on Friday.


The Reuters/University of Michigan Surveys of Consumers also said five-year inflation expectations remained steady at the peak of 3.4 percent reached in May, which was the highest in 13 years.

Federal Reserve officials have focused on long-term inflation expectations in recent comments and the persistence of strong inflationary pressures heightens the dilemma they face of fighting price growth or supporting a flagging economy.

The Surveys of Consumers said the final June reading for its index of confidence fell to 56.4 from May's 59.8.

The June reading is the lowest since 51.7 in May 1980, which was also the lowest reading ever. The index dates back to 1952, though the survey has been conducted since 1946.

Economists had expected a reading of 57.0, according to a Reuters poll. Their forecasts ranged from 55.9 to 60.0. The final June result is slightly below the preliminary figure of 56.7 released on June 13.

One-year inflation expectations declined to still-elevated 5.1 percent from May's 5.2 percent. May's one-year inflation expectations reading was the highest since 5.2 percent in February 1982.

The index of consumer expectations fell to 49.2 in June -- its lowest since May 1980. This was down from May's 51.1.

Meanwhile, the index of current personal finances fell to 69 in June -- the lowest on record -- from 80 in May.

Mixed, Choppy Going for Stocks.......


Friday...6/27/2008


U.S. stocks were in a holding pattern early Friday, with blue chips narrowly mixed and tech shares creeping to the downside.

The Dow Jones Industrial Average was recently down 35 points at 11,417, and the S&P 500 was tacking on 1 point to 1284. The Nasdaq was down 8 points at 2312.

The U.S. indices were rocked Thursday, in no small part because of a Goldman Sachs downgrade of the domestic investment banks and the firm's negative comments on Citigroup (C:) and General Motors (GM:) . Goldman's comments combined with weakness in Research In Motion (RIMM:) and Oracle (ORCL:) worked to create conditions for a steep selloff.

The Dow plunged 358.41 points, or 3%, and ended at 11,453.42, its lowest level in more than a year. The S&P fell 38.82 points, or 2.9%, to 1283.15, and the Nasdaq slumped 79.89 points, or 3.3%, to 2321.37.

Ahead of the new day, Goldman offered more of the same, this time cutting Wachovia (WB:NYSE) to market perform from outperform. RIM also suffered a JMP Securities downgrade to market perform.

Lehman Brothers also weighed in on Merrill Lynch (MER:NYSE) , saying the brokerage could be facing another $5 billion in writedowns because of its exposure to the bond insurers.

Meanwhile, insurance firm AIG (AIG:NYSE) is bracing for as much as $5 billion in losses related to subprime mortgages, Bloomberg reported.

Among earnings, homebuilder KB Home (KBH:NYSE) posted a widened second-quarter loss that was worse than Wall Street's expectations.

Following the prior close, Bank of America (BAC:NYSE) announced it would eliminate 7,500 jobs after merging with mortgage lender Countrywide Financial (CFC:NYSE) .

In tech, telephone company Ericsson (ERIC:NYSE) led the decline, falling 6% on an announcement that Sony Ericsson, its joint venture with Sony (SNE:NYSE) has seen decreased demand for its mobile phones.

RIM shares continued Thursday's selloff, losing 4%, and VMware (VMW:NYSE) was dropping 5%.

Materials and energy stocks were on the rise. Occidental Petroleum (OXY:NYSE) , Tenaris (TS:NYSE) and Barrick Gold (ABX:NYSE) enjoyed modest gains.

Traders were also monitoring the latest surge in oil, whose run-up this year was given new fuel in the previous session by comments from OPEC's president that $170-a-barrel crude could be a reality this year.

Lately, oil was up 96 cents at $140.60 a barrel. It had previously reached a heretofore unseen price of $141.67. The US Oil (USO:NYSE) ETF was adding 0.8% to $114.01. Gold was up $8.60 at $923.70.

In economic data, the Commerce Department's personal spending number climbed 0.8% from April to May, its biggest increase since November 2007. Personal income rose 1.9% for the month, beating analyst predictions of 0.7%.

Treasury prices were rising. The 10-year note was up 9/32 in price to yield 4%, and the 30-year was up 18/32, yielding 4.57%. The dollar was gaining against the euro, but losing ground to the yen and the British pound.

European markets were mixed, while Asia's exchanges slid. London's FTSE was up 0.6%, and Frankfurt's DAX was down 0.1%. Japan's Nikkei and Hong Kong's Hang Seng were both weaker.

Stocks Finish Mixed.......


Into the close...Thursday...7/03/2008


Major stock indexes finished mixed Thursday, but action in the broader market was decidedly negative in a volatile, pre-holiday session before a three-day weekend.

The U.S. dollar surged, and the euro fell, even though the European Central Bank hiked its benchmark interest rate. Gold futures plunged as the dollar rallied. Oil was up but off a record high of $145.85 reached earlier in the session. Bonds were lower.

In Thursday's holiday-shortened session, the Dow Jones Industrial Average rose 73.03 points, or 0.65%, to 11,288.54. Gainers on the Dow included Exxon Mobil (XOM), Chevron (CVX), JPMorgan Chase (JPM), and United Technologies (UTX).

The broader S&P 500 added 1.38 points, or 0.11%, to finish at 1,262.90. The tech-heavy Nasdaq composite index fell 6.08 points, or 0.27%, to 2,245.38.

NYSE breadth was 20-10 negative. NASDAQ breadth was 16-10 negative. Trading was sluggish.

U.S. equity markets were scheduled to close at 1:00 pm EDT Thursday. Markets will be closed on Friday in observance of the Independence Day holiday.

Traders were debating the impact of June employment data that suggest the U.S. job market is worsening.

The U.S. unemployment rate held at 5.5% in May, but nonfarm payrolls fell 62,000 in June, which was slightly worse than expected. Economists were further troubled by revised April and May figures. An additional 52,000 jobs were lost in those two months.

Separately, U.S. initial jobless claims rose 16,000 to 404,000 last week, from 388,000 the week before.

Both reports "suggest a significant pickup in the pace of deterioration in the labor market," wrote John Ryding and Conrad DeQuadros of RDQ Economics.

The U.S. ISM nonmanufacturing composite index dropped to a 48.2 in June, much weaker than expected, after dipping to 51.7 in May. Weakness was broad-based, reports Action Economics. The business activity index fell to 49.9 from 53.6. The employment component declined to 43.8 versus 48.7. New orders fell to 48.6 from 53.6. Export orders slipped to 52.0 from 54.0. Prices paid jumped to 84.5 after climbing to 77.0 in May.

Also Thursday, the European Central Bank raised interest rates, but the bank did not tip its hand on future rate moves, "which supports our view that the ECB is currently not planning further hikes," Action Economics says. That helped the value of the U.S. dollar on Thursday.

On Wednesday, the Dow and Nasdaq dropped into bear market territory, meaning they have fallen more than 20% from October's highs. All three indexes closed below their lowest closes in March, when stocks hit their lowest levels so far this year. Thursday's trading session is a short one, ending at 1 p.m. for the July 4th holiday.

Oil was climbing higher Thursday. August WTI crude oil futures were up 76 cents to $144.33 at 1:27 pm EDT but below their intraday high of $145.85.

Among stocks in the news Thursday were drug companies announcing regulatory approvals of new products. Abbott Laboratories (ABT) announced the FDA approved the Xience V Everolimus Eluting Coronary Stent System, for the treatment of coronary artery disease.

Nvidia Corp. (NVDA) cut its expectations for second quarter revenue, to a range of $875 million to $950 million. Several analysts downgraded the stock on the news.

WD-40 Company (WDFC) posted earnings of 49 cents, vs. 44 cents a year ago, as sales rose 5.8%. Because of a higher cost of goods, the firm expects fiscal 2008 earnings of $1.78 to $1.85 per share, below analyst expectations of $1.86.

Continental Airlines (CAL) will be forced by a French judge to stand trial for manslaughter, for its role in a 2000 crash of a Concorde jet that killed 113 people in Paris.

Major European indexes finished higher Thursday after the ECB raised the benchmark refi rate one quarter-point to 4.25%, but gave no signals that additional tightenings were coming. In London, the FTSE 100 index gained 0.93% to 5,476.60. In Paris, the CAC 40 index added 1.11% to 4,343.99, while Germany's DAX index rose 0.77% to 6,353.74.

In Asia, Japan's Nikkei 225 moved 0.16% lower to 13,265.40, while Hong Kong's Hang Seng Index fell 2.13% to 21,242.78.

Treasury market Treasury were mixed Thursday. Two-year Treasuries were up 01/32 to 100-19/32 for a yield of 2.56%, while the 10-year note fell 06/32 to 99-04/32 for a yield of 3.98%, and the 30-year bond lost 20/32 to 97-09/32 for a yield of 4.54%.

Stocks fall on worries about financial sector.......


Into the close...Monday...07/07/2008


Stock market declines on worries about financial sector even as oil prices pull back sharply

-- Wall Street lost more ground in extremely volatile trading Monday, as investors recoiled at a cautious economic outlook from a Federal Reserve official and the possibility of more financial troubles of Fannie Mae and Freddie Mac.


The market found only slight solace in retreating oil prices.

San Francisco Federal Reserve President Janet Yellen said in a speech the financial markets remained fragile, and that it will take time for conditions to improve. "My expectation is that market functioning will improve markedly by 2009," she said. "But things could get worse before they get better."

The comments added to concerns raised in a note by Lehman Brothers analysts that Fannie and Freddie may need to raise more capital as the credit crisis continues. Worries about the ailing financial sector deflated a stock rally early in the day that had been fueled by a $4-a-barrel pullback in oil prices.

The market managed, however, to rebound from its lows of the day, when the Dow Jones industrial average sank to its worst level since mid-August of 2006. Some investors bought back into the market to take advantage of the low prices.

"The market is so skittish and so scared that half the people believe that this is just another leg of the down market and the other half believes that we're forming a bottom," said Frank Ingarra, assistant portfolio manager at Hennessy Funds.

The Dow fell 56.58, or 0.50 percent, to 11,231.96. Over the course of the day, the blue chips rallied, tumbled, rebounded, and then fell once more. The Dow fell as much as 167.80 to 11,120.74 -- its lowest trading level since Aug. 15, 2006 -- but was also up more than 100 in early trading.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 10.59, or 0.84 percent, to 1,252.31, and the Nasdaq composite index fell 2.06, or 0.09 percent, to 2,243.32.

The technology-dominated Nasdaq got a modest boost from Yahoo Inc., which rose $2.56, or 12 percent, to $23.91 after Microsoft Corp. expressed support for investor Carl Icahn's effort to oust Yahoo's board next month. Microsoft said a successful rebellion would encourage it to renew its takeover bid for Yahoo, or negotiate another deal.

Light, sweet crude fell $3.92 to close at $141.37 a barrel on the New York Mercantile Exchange, after falling by more than $5 a barrel at times.

The retreat did little to assuage fears about high energy prices, however. Wall Street, which has been hurtling stocks lower for the past few weeks, remains fearful that consumers are trimming their spending to pay for gasoline. With consumer spending accounting for more than two-thirds of U.S. economic activity, a pullback could create big ripples.

Government bonds rose. The 10-year Treasury note's yield, which moves opposite its price, fell to 3.91 percent from 3.98 percent last Thursday.

Volatility on Wall Street, as measured by the Chicago Board Options Exchange's volatility index, on Monday briefly hit its highest point since March, when worries about the financial markets peaked during the buyout of Bear Stearns Cos.

"It indicates that there was more fear entering the market than there had been in previous weeks," said Todd Salamone, director of trading and vice president of research at Schaeffer's Investment Research.

Fannie Mae fell $3.04, or 16.2 percent, to $15.74 and Freddie Mac fell $2.59, or 17.9 percent, to $11.91, after Lehman Brothers analysts said new accounting rules could require Fannie to raise $46 billion more capital and Freddie to raise $29 billion.

Citigroup Inc., JPMorgan Chase & Co., and Bank of America Corp. also saw their shares fall ahead of their earnings reports later this month. Citi fell 42 cents, or 2.5 percent, to $16.40; JPMorgan dropped $1.27, or 3.6 percent, to $34.04; and Bank of America fell 87 cents, or 3.9 percent to $21.53.

In addition to financials, Merck & Co. dragged on the Dow, falling $1.85, or 4.8 percent, to $36.60. A UBS analyst downgraded the drug maker, citing slowing sales of its HPV treatment Gardasil.

Meanwhile, General Motors Corp. is considering cutting more white-collar jobs and getting rid of some brands, according to a person familiar the company's discussions. The person asked not to be identified because no decisions have been made. GM shares, which recently sank to all-time lows, rose 12 cents to $10.24.

Investors haven't been as optimistic lately about the prospects for an economic recovery in the second half of 2008 as they once were. The Dow has fallen the last three weeks while the S&P 500 index and the Nasdaq have logged five straight weeks of declines. With drops of more than 20 percent from their October highs, the Dow and the S&P 500 entered bear market territory last week as rising oil stirred inflation concerns.

Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, said some negative technical indicators on Thursday presaged the market's weakness Monday. Notably, there were no companies that set 52-week highs on the New York Stock Exchange on Thursday, Fullman said. "It's unusual to see a drop-off like that."

On Monday, the dollar traded mixed against other major currencies, while gold prices fell.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange. Consolidated volume came to 5.21 billion shares, up from 3.19 billion shares on Thursday.

The Russell 2000 index of smaller companies fell 7.52, or 1.13 percent, to 658.26.

Overseas, Japan's Nikkei stock average rose 0.92 percent. Britain's FTSE 100 rose 1.85 percent, Germany's DAX index rose 1.97 percent and France's CAC-40 advanced 1.80 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Stocks End Sharply Lower.......
Stocks tumble on uneasiness about financials

Into the close...Wednesday...7/09/2008



Stocks fall as Wall Street remains wary about financials; Dow erases previous day's gain


NEW YORK (AP) -- Wall Street tumbled Wednesday as investors grappled with renewed worries about the soundness of the financial sector. The major indexes fell more than 2 percent, including the Dow Jones industrial average, which lost more than 230 points.
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While many financial services companies logged steep declines during the session, government-sponsored lenders Freddie Mac and Fannie Mae were among those hardest hit. Investors are worried that the mortgage finance companies will have to sell more shares than anticipated to compensate for losses from the housing slump. Merrill Lynch & Co. also dropped, after Fitch Ratings put its long-term credit default rating on watch for a possible downgrade.

With dismal bank and lender earnings expected in the coming weeks, investors were unable to keep buying a day after stocks, including financials, had logged sharp gains. Investors are bracing for financial companies to take another series of major credit-related write-downs, but the uncertainty about how large they'll be is weighing on the market, said Scott Wren, senior equity strategist at Wachovia Securities.

"As we go into earnings season, it's going to be much of the same as the first quarter," Wren said. "Financials are going to suffer the worst comparisons again; consumer discretionary earnings are going to be down, too."

Selling accelerated amid light volume, which tends to skew price moves.

Meanwhile, oil remained a concern although it had dropped by more than $9 a barrel over the previous two sessions. Crude fluctuated before settling up a penny at $136.05 a barrel on the New York Mercantile Exchange.

The Dow fell 236.77, or 2.08 percent, to 11,147.44 a day after rising more than 150 points.

The Standard & Poor's 500 index fell 29.01, or 2.28 percent, to 1,244.69, while the Nasdaq composite index fell 59.55, or 2.60 percent, to 2,234.89.

The pullback again left the indexes in bear market territory, having logged declines of more than 20 percent since their October highs. The indexes have been moving in and out of bear market territory in recent sessions.

Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 5.06 billion shares compared with 5.92 billion shares traded Tuesday.

Bond prices edged higher Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.82 percent from 3.89 percent late Tuesday.

The dollar fell against other major currencies. Gold prices rose.

The Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the "fear index," rose 9 percent in the session.

"Nervousness breeds volatility," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group. "It's a challenging environment."

He contends investors are hesitant to buy before getting a better read on the economy.

Conroy said eventually, investors will start jumping in again -- but it's unlikely to happen until the market gets through more second-quarter earnings and starts to see signs of a pick-up in the housing market.

"That would give the financials a platform to stand on," he said.

Freddie fell $3.20, or 24 percent, to $10.26, while Fannie fell $2.31, or 13 percent, to $15.31. The two companies also dragged the broader stock market lower on Monday as worries arose about their cash levels.

Merrill Lynch fell $3.03, or 9.3 percent, to $29.74.

"I think that news is really causing tarnish in the marketplace," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc., referring to Merrill Lynch.

A negative analyst note about Cisco Systems Inc. weighed on the technology sector. Cisco hit a new 52-week low of $21.54 and ended down $1.30, or 5.7 percent, at $21.58 after an RBC Capital Markets analyst cut his price target on the network equipment maker. The CEO recently said technology spending will recover later than the company originally thought.

In other corporate news, Northwest Airlines Corp. said it will cut 2,500 jobs, or about 8 percent of its work force, and begin charging $15 to check a single piece of luggage in an attempt to offset high oil prices. The stock dropped $1.17, or 16 percent, to $6.30.

The Russell 2000 index of smaller companies fell 18.97, or 2.78 percent, to 663.75.

Stock markets overseas rose. Japan's Nikkei stock average edged up 0.15 percent. Britain's FTSE 100 rose 1.64 percent, Germany's DAX index rose 1.30 percent and France's CAC-40 rose 1.50 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Stock markets were spooked by the collapse of IndyMac, the third largest bank failure in US history, and the sharp fall of Fannie Mae and Freddie Mac over the past week. Massive volume in the last few days indicates the presence of strong buyers who see value at current prices. Entry at this stage would be exceedingly risky, but the stocks are worth watching over the next few weeks.


The Dow is testing support at 11000. Light volume indicates that this level is unlikely to hold.

Long Term: Failure of 11000 would test the June 2006 low of 10700. Money Flow warns of continued selling pressure. If 10700 was to fail, the next major support band is 10000/9700.

Bargin Hunters.......   

Stocks soar on drop in oil, Wells Fargo report
Wednesday July 16, 4:13 pm ET
By Tim Paradis, AP Business Writer 
Dow jumps more than 270 points as drop in oil prices eases some concern about rising inflation


NEW YORK (AP) -- Wall Street has -- at least for the moment -- shrugged off some of its many concerns and bounded higher thanks to a drop in oil prices.
The Dow Jones industrial average has shot up 276 points to the 11,239 level, its biggest jump in more than three months.

Investors were relieved when crude fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange. That brought oil's two-day plunge to more than $10.

Wells Fargo & Co.'s decision to boost its dividend is also alleviating some of the market's concerns about the health of banks.

Stocks soar on drop in oil, Wells Fargo report
Wednesday July 16, 5:51 pm ET
By Tim Paradis, AP Business Writer 
Dow jumps 276 points as drop in oil prices eases some concern about rising inflation


NEW YORK (AP) -- Wall Street at least temporarily shrugged off some of its many concerns Wednesday and bounded higher thanks to a drop in oil prices. The Dow Jones industrial average rose 276 points, or 2.5 percent, posting its best daily gain in three months.


The broader Standard & Poor's 500 index also gained 2.5 percent, while the technology-dominated Nasdaq composite index surged 3.1 percent. Investors exited government bonds and back into stocks as it appeared that the slowing economy will curtail demand for fuel and, in turn, energy costs.

Light, sweet crude fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange, bringing its two-day decline to $10.58.

In addition to sinking oil prices, investors found relief in a decision by Wells Fargo & Co. to boost its dividend that helped counter some of the market's concerns about the health of banks. The San Francisco-based bank's move to raise its payout, along with its tamer-than-expected profit decline, was seen as a bullish sign for the troubled sector.

Still, the Labor Department's report that consumer prices shot up in June at the second fastest pace in 26 years reminded investors that inflation still poses a threat to economic growth.

And Wall Street remains uncertain about the economy and specifically the financial sector. This week has brought fresh attention to potential trouble spots in the mortgage market. Fannie Mae and Freddie Mac, the government-chartered mortgage financiers, are still a concern, as are regional banks that could have bad mortgage debt on their books.

But, for the moment, investors were pleased by the drop in oil from record levels.

"I think the pullback in oil is significant. The market and the market participants clearly had digested what the impact was going to be if oil prices had stayed at that level," said Dan Genter, president and chief investment officer of RNC Genter in Los Angeles.

The Dow rose 276.74, or 2.52 percent, to 11,239.28. It was the blue-chips' biggest one-day gain since April 1, when the index rose 391 points.

On Tuesday, stocks ended mostly lower on continuing worries about the financial sector; the Dow logged its first close below 11,000 since July 2006.

Broader stock indicators also rose Wednesday after fluctuating in the early going. The S&P 500 index advanced 30.45, or 2.51 percent, to 1,245.36, and the Nasdaq rose 69.14, or 3.12 percent, to 2,284.85.

Advancing issues narrowly outpaced decliners by more than 3 to 1 on the New York Stock Exchange, where consolidated volume came to 6.58 billion shares, down from 7.26 billion on Tuesday.

While Wednesday's advance likely indicates some enthusiasm among investors, it could also reflect simple bargain hunting rather than a great change in conviction. With many quarterly reports due in the coming weeks, many investors remain uncertain about the health of the economy.

Bond prices declined. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 3.94 percent from 3.82 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices fell.

Oil prices declined after Energy Department figures showed that domestic inventories of crude oil and gasoline rose last week, rather than declining as analysts had expected.

"I think what you're seeing is people are feeling more confident that civilization as we know it is not going to cease to exist and that we're going to make a landing here," Genter said of the decline in oil. "The negative is there is not much of a catalyst here to really pick us up and get us back in the air."

The Labor Department's report that its Consumer Price Index rose 1.1 percent in June came after economists had expected a gain of 0.8 percent. Two-thirds of the increase is linked to surging energy prices. The core reading, which excludes often volatile food and energy costs, ticked up 0.3 percent.

Wall Street has been concerned in recent months that rising prices for necessities like food and fuel would force investors to curb their spending in other areas. A pullback is a disturbing prospect for investors as consumer spending accounts for more than two-thirds of U.S. economic activity. In addition, rising prices could lead the Federal Reserve to raise interest rates, a move that risks derailing economic growth by making access to capital more expensive.

Beyond the inflation reading, which follows a report Tuesday that showed a 1.8 percent increase in wholesale prices for June, investors examined a Fed report that industrial production rose 0.5 percent in June after declining 0.2 percent in May. The increase was the highest since a 0.6 percent gain in July of last year.

Minutes from the last month's meeting of the Federal Open Market Committee, the arm of the Fed that sets interest rates, indicated that policymakers believed that the next move on rates would be an increase. The Fed in June broke a string of reductions by leaving rates unchanged at its last meeting, a recognition that lower rates had weighed on the dollar and led to increases in commodities such as oil and food.

But given the big developments in the financial system over the past several days, the minutes were largely regarded by the market as old news.

It was a huge day for sectors such as financials and airlines that have seen massive sell-offs recently.

Wells Fargo & Co. said its second-quarter earnings fell 22 percent as more customers at the nation's fifth-largest bank failed to repay loans. But the company's results beat Wall Street expectations, and investors were pleased by Wells Fargo's decision to raise its quarterly dividend to 34 cents from 31 cents. Wells Fargo rose $6.72, or 32.8 percent, to $27.23.

Delta Air Lines Inc. rose $1.24, or 26.6 percent, to $5.91 after reporting that high fuel prices led to a hefty second-quarter loss despite a strong increase in sales. The results topped Wall Street estimates, however, which excluded one-time items.

The Russell 2000 index of smaller companies rose 24.40, or 3.68 percent, to 686.75.

Overseas, Japan's Nikkei stock average rose 0.05 percent. Britain's FTSE 100 fell 0.60 percent, Germany's DAX index rose 1.21 percent, and France's CAC-40 rose 1.26 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Stocks end higher on falling energy prices.......
Stocks extend gains from upbeat corporate profit reports as energy prices show steep declines

Into the close...Thursday...07/17/2008


Wall Street shot higher Thursday, extending its rally into a second session as tumbling energy prices bolstered an already upbeat mood that followed stronger-than-expected quarterly reports from big names like JPMorgan Chase and United Technologies. The Dow Jones industrial average rose more than 200 points, bringing their two-day advance to more than 480.


Investors got a double dose of good news after weeks of angst about the economy. Light, sweet crude fell $5.31 to settle at $129.29 a barrel; oil has dropped more than $15 in just the past three sessions. And early Thursday, three components of the Dow industrials -- JPMorgan Chase & Co., United Technologies Corp. and Coca-Cola Co. -- issued comments that generally indicated that their businesses are holding up despite sometimes difficult economic conditions.

The reports let investors put aside some of their worst fears about the economy. Still, Wall Street has had some up periods in the past few months as optimism grew -- only to fall back into a downturn as worries about the financial sector and the economy have welled back up.

"The sentiment has just been so negative that even a whiff of positive news is driving the markets," said Kevin Dorwin, principal at wealth management firm Bingham, Osborn & Scarborough in San Francisco. "Oil the key factor right now because inflation has been on the top of investors' minds and a reduction in the price of oil signals that perhaps inflation will not get out of hand. That's very positive for both the stock and bond markets."

Beyond oil, natural gas prices also fell sharply Thursday after the Energy Department said domestic stockpiles rose last week -- signaling a drop in demand. While levels remain below those of recent years natural gas fell 86.1 cents to settle at $10.537 per 1,000 cubic feet.

A sustained drop in energy costs would be welcome news for nearly all parts of the economy. Consumers have been hard-pressed by higher fuel and food costs. Wall Street is worried they will pare their spending on discretionary items to make room in their budgets for the higher-priced necessities. A pullback could be troublesome as consumer spending accounts for more than two-thirds of U.S. economic activity.

But the declines in energy and profit reports from marquee names left investors in an acquisitive mood again Thursday. According to preliminary calculations, the Dow rose 207.38, or 1.85 percent, to 11,446.66. The Dow on Wednesday surged 276 points after oil fell and Wells Fargo & Co. posted better-than-expected earnings.

The 4.4 percent advance over two days was the Dow's best two-day percentage gain since October 2002 and the point increase gave the blue chips their best back-to-back point gain since late November last year.

Broader stock indicators also rose Thursday. The Standard & Poor's 500 index advanced 14.96, or 1.20 percent, to 1,260.32, and the Nasdaq composite index rose 27.45, or 1.20 percent, to 2,312.30.

Advancing issues outpaced decliners by nearly 3 to 1 on the New York Stock Exchange, where volume came to 1.96 billion shares compared with 1.73 billion shares traded Wednesday.

Bond prices showed steep declines as investors turned away from the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 4.01 percent from 3.94 percent late Wednesday.

The dollar was mixed against other major currencies, while gold prices rose.

Wall Street also appeared placated by economic figures. A Commerce Department report showed construction of homes and apartments rose in June by 9.1 percent. The gain follows a change in New York laws that has given a boost to apartment building. Construction of single-family homes fell by 5.3 percent to the slowest pace in 17 years. Applications for building permits, one indicator of future activity, rose by 11.6 percent.

The Labor Department said the number of newly laid-off people seeking unemployment benefits rose by 18,000 last week to 366,000. However, the increase was below the number economists expected.

Corporate results helped buoy investor sentiment. JPMorgan Chase posted a 53 percent decline in its second-quarter earnings as mortgage and other loan defaults worsened, but the decline in profits wasn't as steep as Wall Street had feared and the stock rose $4.86, or 13.5 percent, to $40.80.

"There were some better-than-expected numbers out of the banks. I think we're maybe getting a little bit of a sigh of relief rally. Things had gotten so scary there for a few days," said Denis Amato, chief investment officer at Ancora Advisors in Cleveland.

Among other financials that gained, Fannie Mae and Freddie Mac jumped after Fitch Ratings affirmed long-term issuer default ratings on the government-chartered mortgage giants. Fitch cut Fannie's preferred stock rating and put Freddie's on watch for a possible downgrade. Investors have worried in recent weeks that they would run into serious financial troubles because of faltering mortgages. Fannie Mae rose $1.68, or 18 percent, to $10.93, while Freddie Mac rose $1.50, or 22 percent, to $8.33.

United Technologies rose $3.59, or 5.9 percent, to $64.70 after posting an 11 percent increase in its second-quarter profit. The maker of everything from jet engines to ventilation systems reported strong growth at its Otis elevator and Carrier air conditioner divisions. The company also raised its full-year forecast for revenue and per-share earnings.

Coca-Cola's second-quarter earnings fell 23 percent as the world's largest beverage company earned $1.42 billion. While the company's revenue and earnings excluding items topped expectations, analysts said volume growth was lighter than expected. The stock fell $2, or 3.8 percent, to $50.34.

The Russell 2000 index of smaller companies rose 9.88, or 1.44 percent, to 696.63.

Overseas, Japan's Nikkei stock average closed up 1.00 percent. Britain's FTSE 100 jumped 2.63 percent, Germany's DAX index rose 1.88 percent, and France's CAC-40 surged 2.76 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Wall Street Ends Tumultuous Week on High Note

Into the close...Friday...07/25/2008


Stocks end higher following economic readings

Wall Street advances moderately following upbeat readings on home sales, consumer sentiment


Wall Street ended a volatile week with a moderate gain Friday after better-than-expected economic data placated a market pummeled a day earlier by concerns about housing and the financial sector.


Financials fell on continued worries about souring loans, while a surge in profits at Juniper Networks Inc. lifted technology stocks.

The Commerce Department's report on June home sales helped investors shake off some early uncertainty. The government said sales of new single-family homes fell by 0.6 percent to a seasonally adjusted annual rate of 530,000 units; the market expected sales to total 505,000. That report helped offset concerns raised by a weak reading on existing home sales on Thursday.

And there was good news about consumers, whose shyness about spending has troubled Wall Street. The Reuters/University of Michigan index of consumer sentiment for the first part of July came in at 61.2, while economists forecast a reading of 56.4, which was the level hit in June -- a 28-year-low.

The Commerce Department also said orders for durable goods rose 0.8 percent last month, far better than the 0.4 percent decline economists expected. It was the best showing since a 1.1 percent rise in February and reflected strength in demand for heavy machinery, primary metals such as steel and even a slight rebound in the beleaguered auto industry.

Linda Duessel, equity market strategist at Federated Investors, said economic figures such as the durable goods numbers are important because they reveal continued demand from abroad, which could help U.S. companies continue to rake in profits even if the U.S. economy isn't running at full steam.

"That's good news for market participants as we try to find a footing in the market because we really don't want to see our weakness leak outside the U.S.," she said.

According to preliminary calculations, the Dow Jones industrial average rose 21.41, or 0.19 percent, to 11,370.69. The Dow, which fluctuated at times Friday, fell more than 280 points Thursday.

Broader stock indicators also rose. The Standard & Poor's 500 index advanced 5.22, or 0.42 percent, to 1,257.76, and the technology-heavy Nasdaq composite index jumped 30.42, or 1.33 percent, to 2,310.53.

Bond prices moved lower as investors shifted back into stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.09 percent from 4.00 percent from late Thursday.

The dollar was mixed against other major currencies, while gold prices rose.

A barrel of light sweet crude fell $2.23 to settle at $123.26 on the New York Mercantile Exchange. Oil prices have fallen more than $20 in recent weeks, alleviating some of Wall Street's concerns about the impact of inflation consumers' ability to spend.

The stock market's volatility during the week -- rallying Tuesday and Wednesday only to erase those gains Thursday -- illustrates tentativeness behind some of the bets investors are laying, said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. He said the market tends to react to whatever the latest headlines are.

"It's just news sensitive and the real question is 'What's the next news going to be? Good or bad?' That means that the market doesn't have a trend or a direction. It depends entirely on whether the news is going to be good or bad on any given day and that doesn't give you, as an investor, a lot of confidence," he said.

Johnson said the ride for investors will likely remain uneven as Wall Street awaits next Friday's government employment report for July.

"If the consensus is correct they'll have little choice but to leave interest rates unchanged," he said referring to the difficulties Federal Reserve policymakers would have in hiking rates to battle inflation without damaging the economy.

Financial stocks fell as investors worried about the health of their balance sheets given the weakness in the housing sector. Bank of America Corp. fell $1.06, or 3.5 percent, to $29.58, while Wachovia Corp. fell $1.19, or 7.6 percent, to $14.50.

In corporate news, Juniper Networks, the maker of networking equipment, reported a 40 percent increase in earnings for the second quarter, helped by a new product line. Results narrowly surpassed Wall Street projections. The stock surged $4, or 18 percent, to $26.57.

Chemicals maker Huntsman Corp. said it was approached by investors offering funding to help complete its $6.5 billion takeover by Apollo Management. Huntsman rose 75 cents, or 5.7 percent, to $14.02.

Fannie Mae and Freddie Mac declined as investors worried about the government-chartered mortgage finance companies' financial stability. Fannie Mae fell 47 cents, or 3.9 percent, to $11.55, while Freddie Mac fell 54 cents, or 6.1 percent, to $8.27.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 1.29 billion shares compared with 1.65 billion shares traded Thurday.

The Russell 2000 index of smaller companies rose 7.95, or 1.13 percent, to 710.34.

Overseas, Japan's Nikkei stock average fell 1.97 percent. Britain's FTSE 100 fell 0.18 percent, Germany's DAX index slipped 0.06 percent, and France's CAC-40 advanced 0.67 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Stocks fall as financials again pull back.......

Monday July 28, 3:31 pm ET

Wall Street declines on renewed concerns about health of financials; oil prices rebound


NEW YORK (AP) -- Wall Street retreated Monday, taking the Dow Jones industrials down almost 180 points as investors' anxiety about the financial sector had them selling stocks across the market. Bond prices rose, the beneficiaries of investors' latest search for a safe haven.


Financials, which had rallied in recent weeks after logging huge declines, suffered Monday from the same worries about souring debt that caused an abrupt end to their run-up late last week. Wall Street is concerned that a further withering of the housing and credit markets will damage bank balance sheets.

Frederic Dickson, chief market strategist at D.A. Davidson & Co., said investors are still trying to get a longer-term view on the stability of the banking industry, particularly the regional banks.

"Corporate depositors and individual depositors are looking at balances at individual financial institutions. I think that's unsettling some of the banks."

On Friday, federal officials closed branches of the 1st National Bank of Nevada and First Heritage Bank N.A. -- owned by Scottsdale, Ariz.-based First National Bank Holding Co., adding to investors' jitters about the ability of some banks to stay afloat.

In late afternoon trading, the Dow Jones industrial average fell 177.49, or 1.56 percent, to 11,193.20.

Broader stock indicators also fell. The Standard & Poor's 500 index declined 16.76, or 1.33 percent, to 1,241.00, and the Nasdaq composite index fell 40.45, or 1.75 percent, to 2,270.08.

Bond prices jumped as investors again sought the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.04 percent from 4.10 percent from late Friday.

The dollar was mixed against other major currencies, while gold prices fell.

Monday's pall over the market wasn't solely because of flagging confidence in the financial sector. Investors are also waiting to see whether oil prices' sharp drop of recent weeks has come to an end, or is just pausing. Light, sweet crude rose $2.23 to settle at $123.26 on the New York Mercantile Exchange.

The troubles that banks are having with bad debt underscore the difficulty that consumers are facing not only in keeping on top of their mortgages but to make their credit card and car payments. That is leading to worries about the broader economy. Investors should get some insight with big economic reports due at the end of this week.

On Thursday, investors will be looking for the first report on gross domestic product for the second quarter. Economists polled by Thomson Financial/IFR expect the Commerce Department to report that gross domestic product rose thanks in part to the government's tax rebate checks.

Then, on Friday, Wall Street will be awaiting the employment report for June. Often such reports are regarded as the most important economic readings of the month because of the insight into the well-being of the consumer. Their health is important because consumers account for more than two-thirds of U.S. economic activity. The latest Labor Department report is expected to show the seventh month of jobs losses and that the unemployment rate ticked higher.

Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams, said investors were selling off financial shares because of their continued concerns about housing.

"They're taking the financials to the woodshed," he said. "Until the housing market stabilizes you're really not going to see the financials stabilize."

Among financials, Citigroup Inc. fell $1.23, or 6.5 percent, to $17.65, while Morgan Stanley declined $1.82, or 5 percent, to $34.94.

The other corporate news Monday wasn't enough to support the market. Verizon Communications Inc. said its second-quarter profit rose 12 percent, although revenue came in short of Wall Street's forecasts. The company, one of the 30 that comprise the Dow industrials, made some investors uneasy after customers disconnected their landlines faster than before. Verizon fell 76 cents, or 2.2 percent, to $33.69.

Kraft, the maker of Velveeta, Oreo cookies and Maxwell House coffee, said higher prices helped offset rising commodity costs and listed second-quarter earnings nearly 4 percent. The company rose $1.35, or 4.6 percent, to $30.73 after raising its forecast for the year.

Private equity firm Kohlberg Kravis Roberts & Co. said Sunday it plans to go public on the New York Stock Exchange through a takeover of its Amsterdam-listed affiliate investment fund KKR Private Equity Investors LP.

Tyson Foods Inc., the world's largest meat company, fell $1.01, or 6.3 percent, to $15.21 after reporting a 90 percent drop in its fiscal third-quarter profits because of rising cost of grain used to feed chicken.

Amgen Inc. surged $6.13, or 11.4 percent, to $60.05 after the company reported positive trial results for its osteoporosis drug candidate denosumab. Late-stage clinical trial results showed denosumab reduced the incidence of fractured vertebrae in post-menopausal women.

Declining issues outnumbered advancers by more than 3 to 1 on the New York Stock Exchange, where volume came to 779.1 million shares.

The Russell 2000 index of smaller companies fell 14.00, or 1.97 percent, to 696.34.

Overseas, Japan's Nikkei stock average rose 0.14 percent. Britain's FTSE 100 fell 0.75 percent, Germany's DAX index fell 1.33 percent, and France's CAC-40 declined 1.20 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Stocks soar after another drop in oil prices.......


Into the close...Tuesday...07/29/2008


Stocks jump as falling oil prices, upbeat confidence data lift Wall Street's consumer gloom.


NEW YORK (AP) -- Wall Street shot higher Tuesday, gaining back the previous session's sharp losses and then some, after a drop in oil prices and a rise in consumer confidence gave investors some hope for a letup in Americans' financial woes. The Dow Jones industrial average rose 266 points.


Crude oil prices sank $2.54 to $122.19 a barrel on the New York Mercantile Exchange, extending their two-week-long retreat from record highs above $147. The prospect of lower energy costs for U.S. consumers, along with a modest uptick in the Conference Board's July index of consumer confidence to 51.9 from 51 in June, came as welcome news. Consumer spending accounts for more than two-thirds of U.S. economic activity.

"The thinking is that oil prices are heading lower, and that's obviously a positive for the market," said Richard E. Cripps, chief market strategist for Stifel Nicolaus.

A stock bounce was hardly unexpected, though, after the Dow lost nearly 240 points Monday on worries about the sagging financial sector. Wall Street is torn: Energy prices, if they continue on their downward path, could provide big relief to consumers and in turn help the economy, but credit losses keep mounting at the nation's major banks. The result is big swings in the market but little consistent direction.

"We're living from one piece of news to the next," said Alan Gayle, senior investment strategist for RidgeWorth Capital Management. The market's volatility is likely to continue unless it gets further evidence that oil prices are, indeed, on their way down, and that banks have already seen the bulk of their losses.

In a sign that there could be additional asset markdowns for banks, Merrill Lynch & Co. announced late Monday that it was writing down another $5.7 billion and selling assets tied to risky debt at a steep discount to Lone Star Funds, a distressed debt investor.

Still, Merrill's moves at least answered lingering questions about the health of the brokerage's balance sheet. And many analysts said the asset sale could help to finally establish a market for all the hard-to-value securities held by various financial institutions.

"The bad news is, there's going to be write-downs. The better news is, we can estimate those write-downs with better clarity," Gayle said.

The Dow gained 266.48, or 2.39 percent, to 11,397.56.

Broader stock indicators also climbed. The Standard & Poor's 500 index rose 28.83, or 2.34 percent, to 1,263.20, and the Nasdaq composite index rose 55.40, or 2.45 percent, to 2,319.62.

The Dow and the S&P are now less than 20 percent below their Oct. 9 record peaks -- technically out of bear market territory. The Nasdaq is less than 19 percent below its Oct. 31 peak. Still, another downturn will put the market back into bear territory, and some analysts would call an advance like Tuesday's a bear market rally.

Advancing issues outnumbered by nearly 4 to 1 on the New York Stock Exchange. Consolidated volume came to a moderate 5.11 billion shares, up from 4.16 billion shares Monday.

Bond prices fell after advancing a day earlier. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.04 percent from 4.01 percent late Monday.

The dollar was mostly higher against other major currencies, while gold prices fell.

Merrill, which plans to issue new stock to raise $8.5 billion, initially saw its stock drop. But shares later rallied to finish up $1.92, or 8 percent, at $26.25.

Most other financial stocks also bounced higher. Citigroup Inc. rose $1.03, or 5.9 percent, to $18.46; Washington Mutual Inc. rose 46 cents, or 11.7 percent, to $4.40; Bank of America Corp. rose $3.97, or 14.2 percent, to $32.03; and Wachovia Corp. rose $1.98, or 14.5 percent, to $15.61.

Airline stocks also jumped due to slumping oil prices. AMR Corp., the parent of American Airlines, rose $1.47, or 18.4 percent, to $9.47; Delta Air Lines Inc. rose $1.01, or 14.6 percent, to $7.91; and United parent UAL Corp. rose $1.50, or 21.4 percent, to $8.51.

Better-than-expected quarterly earnings helped shore up sentiment as well.

United States Steel Corp.'s profit more than doubled in the second quarter following an increase in demand and pricing. The stock jumped $20.43, or 14 percent, to $165.76.

Colgate-Palmolive rose $5.59, or 8.2 percent, to $74.15 after reporting that its second-quarter earnings rose 19 percent. Price increases helped the consumer products company offset rising input costs.

But on the downside, there was more data pointing to a still sinking housing market. S&P/Case-Shiller said its 20-city index for May fell 15.8 percent from a year earlier -- the sharpest drop since its inception in 2000. The narrower 10-city index is down 16.9 percent, the biggest decline in its 21-year history.

The Russell 2000 index of smaller companies rose 18.44, or 2.65 percent, to 714.55.

Overseas, Japan's Nikkei stock average fell 1.46 percent. Britain's FTSE 100 rose 0.12 percent, Germany's DAX index rose 0.75 percent, and France's CAC-40 dipped 0.09 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com