Abysmal Showing at Wall Street
March 7, 2008
(Long Island, N.Y.) Wall Street absorbed heavy losses yesterday as investor’s initial fears of dreadful economic figures translated into reality earlier this week to help drive off activity trading and keep optimism in check.
Several determining forces handed the Stock Market a devastating blow which included surging numbers for home foreclosures threatening to break record levels during the last quarter of 2007 which the Mortgage and Bankers Association reported last Wednesday. Another factor heavily affecting Wall Street are concerns coming out from the Credit industry involving Thornburg Mortgage Inc. and a Carlyle Group bond fund after it revealed bad investments backed by mortgages. Both companies failed to meet marginal figures, which are payments to guarantee much larger future debt or investments.
“I think these are near-term, unfortunate events that if they had the luxury of time and capital they could probably weather but unfortunately with this leverage-based system we have, time is a very expensive luxury,” Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said in reference to the difficulties at Thornburg and Carlyle.
The Dow Jones Industrial soaked up the most damage after it conceded majority of their gains earlier in the week in losing 214.60 points on Thursday’s trading which is a mind-numbing 1.75 percent decrease from the previous day to settle with 12040.39 points. Broader indexes Standard & Poor 500 and NASDAQ composites also experienced declines after S&P 500 lost 29.36 points or 2.20 percent lower to finish at 1,304.34 points while NASDAQ fell 52.31 points a 2.30 percent decrease and end with 2,220.50 points.
Meanwhile, Sweet and Crude Oil maintained above the $105 mark as it closed down at $105.47 a barrel on Thursday in the New York Mercantile Exchange. Earlier in the day, OPEC rejected a US government request to increase production after a surprising decline in US Oil supplies which drove oil prices surging further.
“There are expectations that the dollar will go lower, and that’s driving money into commodities,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “Traders now have this mantra: sell the dollar and buy oil, or buy commodities.”
Wall Street Rallies to Cut Large Deficit
March 5, 2008
(Long Island, N.Y.) The Stock Market opened up weak on Tuesday as reports of Merrill Lynch and Intel Corp. lowering its expectations for their first quarterly income reports brought down investor’s trading activity but staged a slight rally after CNBC news announced positive developments on the negotiations to save troubled bond insurer AMBAC financials.
Volatility seems to be the perfect description of Wall Street these days as investor’s are on constant alert for any positive or negative economic developments that could help our economy break off recession and inflation threats or completely succumb to it. The Dow Jones Industrial lost 45.10 points for a negative 0.37 percent change to finish with 12213.80 points. The NASDAQ composites shared volatility concerns as it gained a slight increase of 1.68 points to end with 2260.28 while the Standard and Poor 500 decreased 4.59 points and end the day’s trading with 1326.75 total points.
“What we’re seeing is a very nervous market, and nervousness breeds volatility, it took years to put this stuff on their books — it’s not going to come off quickly.” Said Anthony Conroy who is the managing director and head trader for BNY ConvergEx Group.
Financial experts and Wall Street analysts hope for another interest rate cut to be implemented by the Federal Reserves later this month that would give both the housing and construction industry markets a much needed boost as indicated by Fed’s chairman Ben Bernanke in an earlier statement made at Capitol Hill regarding the current state of economy. Another contributing factor for any optimism will be the pending release of tax-rebates issued by the government in an effort to help the struggling US economy.
“The soft economy creates a difficult profit environment for most firms. And with investors’ skepticism at high levels, they are quick to sell,” said Alan Gayle, senior investment strategist at Trusco Capital Management referring to Wall Street investors fear which trigger the up and down market.
Wall Street Struggles
March 4, 2008
(Long Island, N.Y.) Wall Street closed trading yesterday negatively mixed after highly optimistic gains last week which saw the market elevate its total investor activity level only to be pulled back by weak economic numbers coming out of the Labor and Commerce Department on Monday.
The Dow Jones Industrial was down 7.49 points or a 0.06 percent change from the previous days trading to finish with 12258.90 points. The NASDAQ composites also declined by 12.88 points which is a 0.57 percent change to settle at 2258.60. Meanwhile, the Standard and Poor 500 gained weakly after closing down with a 0.71 point increase from Friday’s trading to end with 1331.34 points which is a 0.05 percent positive move.
Key economic figures which financial experts hoped to have given the market a boost came out gloomy for Wall Street as the Commerce Department announced a 1.7 percent decrease; a 14 year low in total construction spending for the month of January, a figure which further delivers a blow to an already weakened housing industry.
Also on Monday, The Institute for Supply Management’s index of U.S. manufacturing activity reported a 48.3 level which surpasses expert’s expectations at 48.1.
Peter Cardillo who is the chief market economist at the New York-based brokerage house Avalon Partners Inc said “The two economic numbers that came out today were still rather on the negative side and they point to further weakness in economic activity,”
The market struggled as investors decided to decline market activity after the figures came in which coincides with meteoric Oil price increases at New York Mercantile Trading. Also last week, the Federal Reserve chairman Ben Bernanke undermined the threat of inflation and a sparkling possibility of stagflation in the US economy, a sentiment many experts disagree. “It didn’t play well the first time, and it’s not playing well the second time, the truth is, the price for everything, except for maybe soft goods and electronics, is going up,” said a market insider referring to Bernanke’s comments.
Oil Prices Flirt with $103 Barrel Mark
February 29, 2008
(Long Island, N.Y.) For a brief moment yesterday, Sweet crude and Oil prices at the New York Mercantile Exchange surged above $103 a barrel which set an all-time high for in-day trading in the US oil market before settling down to close at $102.52 for deliveries in April.
As the US dollar weakens against most major currencies worldwide, more traders see it as an opportunity to invest in the oil market rather than in monetary currency which is highly volatile right now, giving the Oil market fresh new investments coming in. Another key component for the recent oil price hike at the NYME was Federal Reserves chairman Ben Bernanke’s comment with President Bush on Thursday in its efforts to stave off stagflation and the Feds plan to further cut interest rates.
“It seems that further interest rate cuts, additional dollar weakness and more investment buying will anchor oil to higher prices,” energy risk management firm Cameron Hanover said. “It can’t go on forever, but it looks like it can go on for a while.”
On Monday, Federal Reserve’s Chairman Ben Bernanke appeared at Capitol Hill to testify in front of the House Financial Services Committee on the current state of the US economy and announced his bureau’s intentions of slashing down interest rates yet again if the economy calls for it. This statement drove fear to investors as interest rate cuts mean a parallel decrease in the US currency.
“Due to the weakening dollar and the rising fear of inflation, investors have put money into commodities, oil included,” said Victor Shum, an energy analyst with Purvin & Gertz. “Commodities, as tangible assets, do not face as much inflationary threat as opposed to holding a currency, even though the value of money is changing, the asset continues to have an intrinsic value. We’ve seen seven straight weeks of builds in crude oil inventories. The oil market fundamentals are softening and yet we see record highs being set, day in and day out.”
Wall Street Manages to Edge Wednesday on the Up
February 28, 2008
(Long Island, N.Y.) Wall Street investors’ reluctance to continue trading and stay active through the day cost the market earlier gains but still managed a slight increase as Wednesday’s trading closed down making it four sessions in a row with positive results for Wall Street and the stock market.
The Dow Jones Industrial received a respectable raise in earning 9.36 points or a 0.07 percent change from Tuesday’s trading deadline to settle at 12694.28 points. The NASDAQ composites also gained a 8.79 point increase for a 0.37 percent change upping its total points to 2353.78 while broader index Standard and Poor 500 retreated 1.27 points which is a 0.09 percent decrease from previous day trading to end with 1380.02 points.
Wednesday’s trading started well enough for Wall Street as news of the US government lifting an earlier restriction on Fannie Mae and Freddie Mac business portfolio gave a much needed boost to the troubled home loans sectors. Federal National Mortgage Association (FNMA) or more popularly known as Fannie Mae and Federal Home Loan Mortgage Corporation (FHLMC) known as Freddie Mac are the biggest financing arm for US home loans industry. Both companies are government-sponsored enterprise (GSE) and as a GSE, both are stockholder-owned corporation authorized to make loans and loan guarantees.
Financial experts agree that lifting financial restrictions to Fannie Mae and Freddie Mac would marginalize the losses incurred by the struggling home loan sector and give optimism to investors “The government is trying to do their part,” said Todd Leone, managing director of equity trading at Cowen & Co. “Together, this helps put a little more faith in the economy.”
Another key factor working for Wall Street was Federal Reserves chairman Ben Bernanke’s appearance at Capitol Hill in front of the House Financial Services Committee in which he expressed his agency’s intentions of slashing down interest rates by the middle of next month if that’s what it takes to stave of inflation for the US economy. “Act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.” Bernanke said.
Wall Street Continues Momentum Tuesday
February 27, 2008
(Long Island, N.Y.) Despite meteoric oil price increases in the New York Mercantile Exchange, Wall Street prevented losses after a slow start in the day’s trading to sustain its three day momentum and keep optimism high in the market in spite of recession and inflation threats to the US economy.
The Dow Jones Industrial gained 114.70 points for a 0.91 percent change from previous day trading to end with 12684.92 points. Broader indexes and composites NASDAQ and Standard & Poor 500 remained unchanged in points for the day.
Wall Street’s increase was fueled by IBM’s announcement of a proposed $15 Billion stock buyback which gave hope to investors and proved that some companies still possess the ability to spend heavily despite a savage torn market. IBM’s news was a fresh injection of optimistic help after negative economic figures trickled down Wall Street from the Labor Department of a higher than expected core wholesale prices in the US and the waning confidence of consumer to spend.
“The market is kind of overcoming negative news, which is potentially a next step toward higher prices,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “At least in the short-term, it’s a nice change here.”
Other key factors which negated the negative effects of Labor Department’s announcement came from retailers such as Target Inc. which announced a higher than expected fourth quarter profits. Rite Aid also expressed a jump in its quarterly report as its shares per stock rose 17 cents, or 6.5 percent, to $2.78. Another company on an upswing is RadioShack Corp. which had a better fourth quarter earnings report than predicted earlier by market experts.
At the New York Mercantile Exchange, Oil Prices recorded a new all-time high as it concluded the day trading at $101.70 a barrel which surpasses the record set earlier this month at $100.10 a barrel which was the first time Oil Prices finished a day above the $100 mark.
Wall Street Closes Week on High Note
February 23, 2008
(Long Island, N.Y.) Wall Street closed Friday with impressive gains to upend a volatile week and preserve nervous optimism among investors with numerous newsworthy reports expected to be filed by fortune 500 companies and economic numbers handed out by the Department of Commerce and the Fed.
The Dow Jones staged a remarkable comeback after being down 140 points by mid-afternoon DJI reversed its fortunes by gaining over 225 points in the last hour of trading after CNBC announced that bothered bond insurer Ambac Financial Group Inc. have released a plan to rescue the troubled company. Dow Jones ended the day gaining 96.72 points or a 0.79% increase from previous day trading to end with 12381.02 points for the week. NASDAQ also made a modest rally to rise 3.57 points and end with 2303.35 points while Standard and Poor 500 increased 10.58 points and concluded the week with 1353.11 points.
Jim Herrick, manager of equity trading at Baird & Co.said of Ambac’s rumor “There’s probably some validity to the rumors with the overall financial crunch we’ve experienced, this brings new confidence in the sector.”
News of a bailout plan to save Ambac Financials reached Wall Street late in the day’s trading which proved to be crucial as it injected higher optimism among investors to stay active in the market. The proposed plan was hatched by a consortium of banks such as Citigroup Inc., UBS AG, Wachovia Corp. and Royal Bank of Scotland Group PLC and with the participation of New York State Insurance Department. Their goal is to infuse cash into the company which would allow Ambac financials to retain its “AAA” rating which is essential in receiving new businesses.
“We continue to be engaged in and fully supportive of the bond insurers’ ongoing efforts to resolve their current problems,” said Andrew Mais, director of public affairs at the New York State Insurance Department. “As insurance regulators, it is our responsibility to protect policyholders and ensure a healthy, competitive market for insurance products. We are encouraged by any developments that further these goals in this important market.”
Wall Street Rebounds from Tuesday Losses
February 21, 2008
(Long Island, N.Y.) Investors undermined their concerns of economic declines in the country to fuel Wall Street in avenging a disappointing loss last Tuesday which saw the market gaining momentum in early trading only to falter at the latter stages of the day conceding the short-term gain.
The Dow Jones Industrial Indexes recovered with 90.04 points gained yesterday which is 0.73% higher than the closing on Tuesday and finished with 12427.26 points. The Nasdaq composites also increased 20.90 points which is a 0.91% gain and ended the day with 2327.10 points while broader trading Standard and Poor 500 added 11.25 points to close at 1360.03 points for a 0.83% gain.
Wall Street’s rally was mainly attributed to a positive income report announced by Hewlett Packard for their first quarterly statement which propelled optimism for some investors to stay actively involved throughout the day as more companies filed their own statements. Also, other factors that triggered Wall Street’s rise was the monumental increase in oil prices which gave energy stocks a much needed boost though not an earful of good news for consumers.
Oil prices extended a new record on Wednesday in the New York Mercantile Exchange as it flirted above the $101 mark before it settled at $100.74 a barrel up from previous day trading with $100.01 which was the first time in history that oil prices reached the triple digit mark. “The Fed was the catalyst to get us going here, this is unbelievable,” said Phil Flynn an analyst for Alaron Trading Corp. which represents the interest of the energy sector.
Meanwhile, a new economic forecast was released by the Federal Reserve which underlines the growing concern of recession as “avoidable” but nonetheless predicted slower economic growth than earlier expected due to concerns with the Housing sector and bad creditors. “With no signs of stabilization in the housing sector and with financial conditions not yet stabilized, the committee agreed that downside risks to growth would remain even after this action,” according to minutes of the Fed’s January 29th -30th closed door meeting.
Wall Street: Stocks Fall as Oil Prices Soar
February 20, 2008
(Long Island, N.Y.) Wall Street conceded an early advantage by mid-day trading as news of soaring oil prices in the New York Mercantile Exchange reached the market in the latter stages of the day which defused early momentum gained by major indexes and composites in the market.
The Dow Jones Industrial had a promising start which saw them gathering a possible triple digit gain by mid-afternoon. That would have been a welcoming sign for investors although the day ended up losing 10.99 points and closed at 12337.22, a 0.9% decline. The NASDAQ composites also fell 15.6 points to end with 2306.20 while the Standard and Poor 500 lost a minimal 1.5 points to finish with 1348.78.
Other key issues for investors are worries with the upcoming release of the Labor Department report for its January consumer pricing which is a meteoric barometer for inflation. Richard Sparks a senior equities analyst at Schaeffer’s Investment Research in Cincinnati says, “I think there are still a lot of worries in the market that we have this stagnant growth in the economy and higher prices.”
Wall Street analysts and experts hope to end the week on the positive side to assist our economy against inflation. Traders are concerned that if our economy ends up with a high inflation rate, it might affect the outcome of the upcoming March 18th meeting for the Federal Reserve as Wall Street expects another yet Interest rate cut by the Central Bank which could prove advantageous for the market.
“Can these financial stocks get to the bottom of their questions of soundness in asset quality? We have to reach a tipping point here,” said Richard Cripps, chief market strategist for Stifel Nicolaus. “That’s the part that I think has to occur for this market to have a sustained advance.”
Wall Street Expects Little Consistency as Trading Week Opens
February 18, 2008
(Long Island, N.Y.) Amidst a brazen economic conundrum, Wall Street hopes to instill stability in a so far volatile market to start the week with hopes of upturning a weakened economy and finally establishing a positive trend to help fend off threats of recession.
Investors are playing a waiting game with the market before they increase their activity; a move exemplified in last week’s showing as traders where busy during the first 3 days with positive gains heading their way. As the week progressed, external factors such as negative quarterly reports from major companies and pessimistic expectations from Federal Reserve chairman Ben Bernanke factored in heavily as the market lost momentum last Thursday.
“We may not have hit the bottom, but people seem to be looking for things to buy rather than things to dump, things might get worse before they get better, but you’ve got to buy stock when things look worst.” said Alexander Paris an economist and market analyst for Barrington Research in Chicago.
As a whole, Last week’s trading netted positive gains for Wall Street. The Dow Jones Industrial finished 1.36 percent higher than the previous week while the Standard and Poor 500 rose 1.40 percent and the NASDAQ composites gained 0.74 percent by week’s end.
The slight increase in last week’s trading was reflective to some positive developments concerning the US economy. The US Labor Department announced a lower unemployment claim rate which enthralled investors early on the week while the Department of Commerce chimed in with its own positive report of a higher sales report for the month of January. Wall Street needs similar reports this week to continue a commendable run.
Meanwhile, the Federal Reserve last week released reports of their January 29th-30th meetings which netted interest rates cut by the Central Bank. The announcement indicated a weakening in employment rates in the US, tightening of credit for businesses and households and seemingly stressed financial markets.
“It seems to be, as the data unfolds, they’ll have no choice but to cut further. Though, that given how much policy makers have already slashed rates and their persistent worries about inflation, they don’t have much more to go.” ,” said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co.
