Market Wrap-Up

December 28, 2007

Dow 13,365.87 +6.26 +0.05% NASDAQ 2,674.46 -2.33 -0.09% S&P500 1,478.49 +2.12 +0.14% 10yr Bond(%) 4.09% -0.10

The market opened strong today after overreacting to yesterday’s news that Pakistan's former Prime Minister Benazir Bhutto was assassinated.

Warren Buffet’s Berkshire Hathaway (BRKB) $4685.00 +112.00 (2.45%) made news today. The company announced it was starting a bond insurance company. Shares of MBIA (MBI) $18.74 -3.53 (-15.85%) and Ambac (ABK) $25.12 -4.02 (13.80%) fell on the news, since Berkshire stands to take business away from these companies. Berkshire also announced it is buying a reinsurance unit from ING.

Also helping stocks was the release of the Chicago PMI which came in better than economist had expected.

Stock then started to retreat when the Dept of Commerce reported that new home sale fell 9% to 647k, economist had expected new home sales to come in at 714k. New home sales are now down 53% from their all time high reached in July 2005.

Retailer Macy’s (M) $25.48 +0.44 (1.76%) announced that it was closing nine underperforming stores sending the shares higher on the news.

Not surprisingly the worst performing sectors for the day were the homebuilders (-3.2%) and the thrifts & Mortgages (-3.0%)

Next week should be a quite one with only a few companies reporting earnings. Companies reporting of interest are Monsanto (MON), Bed Bath & Beyond (BBBY), and Texas Industries Inc. (TXI)

Economic reports of importance out next week are: the December ISM Index, the minutes from the most recent FOMC meeting and the December Employment report.