Market Wrap-Up

January 10, 2008

DOW 12,853.09 +177.78 (+0.92%) S&P 500 1,420.33 +11.20 (+0.79%) NASDQ 2,488.52 +13.97 (+0.56%) 10yr Bond 3.887% +0.096

The market opened lower today driving the declines were December same-store sales which came in weaker than expected. Although Wal-Mart (WMT) $48.40 +1.50 (+3.20%) had a nice report.

CapitalOne (COF) $42.92 -0.43 (-0.99%) shares traded lower after the company lowered their outlook citing loan delinquencies. This made many traders question whether the credit card companies were the next sector to get hit by the fallout from housing.

American Express (AXP) $48.92 -0.16 (-0.33%) said the company will raise its reserves for loan losses by $440 million. The announcement also said that cardmember spending last month dropped well below levels for the previous two months of the quarter.

In a speech today Federal Reserve Chairman Bernanke said that additional policy easing may well be necessary, and that the Fed is willing to take "substantive additional action" if needed. The market now is expecting a 90% chance that the Fed will lower interest rates by 50 basis points at their next meeting. I have been calling for this for weeks.

The market rallied on the Bernanke news, but soon gave up those gains. It didn’t push back into positive territory until news came out that Bank of America (BAC) $39.30 +0.56 (+1.45%) was in advanced talks to acquire troubled Countrywide Financial (CFC) $7.75 +2.63 (51.37%).

The financial and telecom sectors were today’s top performing sectors up 2.3% and 1.7% respectively.

I am expecting more chopping trading to occur tomorrow as traders close out the week.