Market Wrap-Up

February 6, 2008

DOW 12200.10 -65.03 (-0.53%) S&P 500 1326.45 -10.19 (-0.77%)
NASDQ 2278.75 -30.82 (-1.35%) 10 Year Bond 3.614% +0.027

The Market opened higher this morning on news that Walt Disney (DIS) $31.50 +1.43 (4.76%) posted better than expected earnings. Time Warner (TWX) $15.71 +0.31 (+2.01%) also had a nice report today

Future exchange companies CME Group (CME) $485.25 -103.55 (-17.59%) and NYMex (NMX) $87.88 -18.78 (-17.61%) both got killed today after it was reported that U.S. Dept. of Justice is calling for an end for futures exchanges being able to own or control clearing functions.

BHP Billiton's (BHP) $66.10 -3.38 (-3.16%) offer to acquire Rio Tinto (RTP) $409.37 -12.13 (-2.88%) for $147.4 billion was rejected today. The company said that the offer did not reflect the value of the company and its prospects for expansion.

Today’s downturn in the market can be attributed to Philadelphia Fed President Plosser. Mr. Plosser expressed concerns about inflation and said that the Fed's credibility is weakening. The market had positive returns up until his comment.

The energy sector also got hit today (-1.58%) on the Department of Energy report showing that crude stockpiles rose 7.05 million barrels. Economist has been looking for only a 2.6 million barrel increase. This also caused the price of crude to drop today.

After hours today, Cisco Systems (CSCO) $23.08 -0.18 (-0.77%) reported earnings in line with estimates. The company reported earnings of $0.38 per share. Revenues rose 17.0% year-over-year to $9.8 billion, which also met estimates. The shares are under pressure in after hours trading.

I would expect more volatility in the market tomorrow.

Market Wrap-Up

January 31, 2008

DOW 12650.36 +207.53 (+1.64%) S&P 500 12650.36 +22.74 (+0.18%)
NASDQ 2389.86 +40.86 (+1.71%) 10 Year Bond 3.639% -0.094

The market opened up lower today after the Labor Department said jobless claims for the week ended Jan. 26 jumped to 375,000 from 306,000. Economists had expected 320,000 new claims. Although it is only one week’s worth of data it is something to be watched to see if a trend develops.

In other economic news the Chicago PMI, a survey of regional manufacturing came in weaker than expected at 51.5. Economist has been looking for a reading of 52.0. It was also a decline from December’s reading of 56.4.

MasterCard (MA) $207.00 +18.00 (+9.52%) had a nice gain today after the company reported better than expected earnings. MasterCard's earnings came in at $0.89, beating Wall Streets estimate of $0.72. The company’s revenue increased 27.8% year over year.

MBIA (MBI ) $15.50 +1.54 (+11.03%) reported larger than expected losses. The bond insurance company had an operating loss of $3.38 per share in the fourth quarter. The company’s CEO said that the 80% decline in the share price was unjustified and that the company will exceed all AAA rating requirements.

Bristol-Myers Squibb (BMY) $23.02 -0.24 (-1.03%) missed its earnings expectations and issued lower guidance today, while Procter & Gamble (PG) $65.42 +0.33 (+0.51%) topped their earnings estimates.

Leading sectors today were Financials and Retailers which is expected after the recent Fed cuts. The question remains will they continue to recover from their recent slides.

Market Wrap-Up

January 30, 2008

DOW 12442.83 -37.47 (-0.30%) S&P500 1355.81 -6.49 (-0.48%)
NASDQ 2349.00 -9.06 (-0.39%) 10 yr Bond 3.733% +0.075

The stock market opened lower on a weaker than expected GDP report. Fourth quarter GDP came in at 0.6%, when economist has been looking for the economy to grow 1.2%. However, the economy did manage to stay out of recession territory, but not by much.

Altria (MO) $76.50 +0.38 (+0.50%) announced earnings that beat estimates by $0.03 and announced the spin-off of Phillip Morris effective March 28.

Yahoo! (YHOO) $19.05 -1.76 (-8.46%) reported earnings that beat Wall Street estimates, but the street was disappointed with the company’s guidance going forward.

Shares of bond insurers MBIA (MBI) $13.96 -2.02 (-12.64%) and AMBAC Financial (ABK) $10.85 -2.08 (-16.09%) were hit hard today after CNBC reported that Bill Ackman, an activist investor, wrote the NY State Insurance Commissioner stating that the insurers situation is much worse than previously stated.

Additionally, CNBC ran a story stating that a rating agency was going to lower its rating on one of the insurers. Fitch also lowered its rating on FGIC Corporation and its subsidiaries.

The most important news of the day had to be the Federal Reserve lowering rates again. This time they lowered rates 50 basis points to 3.00%. In their statement they did note the slowdown in growth and hinted that they would be open to more rate cuts to keep the economy growing.

The market was higher on the Fed cut today, but lost its steam as traders digested the news about the bond insurance companies. The thought is the problems with the insurers could translate into more billion dollar write downs in the financial sector.

Overall, the rate cut today is very positive for the economy and stocks. With the miserable rates on Treasuries the thought is money will now flow back into the stock market looking for values.