The Bush Economy, 19NOV08, World Markets Continue Plunge
- From: Curly Surmudgeon <curlysurmudgeon@xxxxxxxx>
- Date: Thu, 20 Nov 2008 08:39:19 -0800
DOW -427.47 -5.07%
Nasdaq -68.15 -5.90%
S&P 100 -24.40 -5.86%
FTSE 100 -202.87 -4.82%
DAX -225.38 -4.92%
CAC 400 -129.51 -4.03%
=====
Market Overview
4:25 pm : Wednesday marked an ugly session on Wall Street, with the S&P
500 and Nasdaq tumbling to their lowest levels in five years and the Dow
dropping to a five-year closing low. Concerns over the fate of U.S.
automakers, disappointing economic data, a dour outlook from the Fed and
the market's inability to hold its lows fueled the selling interest.
The major indices ended the session at their worst levels, in above
average volume. The Dow, Nasdaq and S&P 500 fell 5.1%, 6.5% and 6.1%,
respectively.
October CPI fell by the largest amount on record, which is good news in
terms of the inflation outlook, but also represents the weakness of the
economy. Specifically, CPI fell 1.0% month-over-month as energy prices
plummeted 8.6%. Prices also declined outside of energy, indicating weak
demand -- core CPI fell 0.1% as used car prices dropped 2.4% and apparel
prices fell 1.0%.
The latest new residential construction data fell to the lowest levels on
record, and provide another weak point for fourth quarter GDP
calculations. October housing starts declined 4.5% month-over-month to a
seasonally adjusted annual rate of 791,000, which was slightly higher than
the consensus estimate of 780,000. Building permits dropped 12% to a
seasonally adjusted annual rate of 708,000, which was worse than the
consensus estimate of 774,000.
The Federal Reserve's 2008 and 2009 projections, released today in the
FOMC Oct. 29 meeting minutes, mirrored the latest economic data, with the
Fed reducing forecasts for GDP growth and inflation. For 2008, the Fed
expects the economy will grow between 0.0% and 0.3%, down sharply from its
previous forecast of 1.0% to 1.6%. The 2009 forecast now calls for growth
between -0.2% and 1.1%, down from the previous forecast of 2.0% to 2.8%.
The Fed also raised its unemployment forecast.
The minutes hinted at the likelihood of further monetary easing, as some
FOMC members saw potential for further rate cuts.
Although weakness was broad-based with losses posted by all ten sectors
and 492 of the 500 components within the S&P 500, the financial sector got
hit the hardest with a decline of 11.5%.
Citigroup (C 6.45, -1.91) tumbled 23% to its lowest level since 1995. Citi
said it will buy the remaining $17.4 billion in structure investment
vehicles it advised.
Automakers (-21.2%) got clipped as executives from General Motors (GM
2.77, -0.32), Ford (F 1.27, -0.41) and Chrysler, and the head of the UAW
testified before the House Financial Services Committee in an attempt to
secure a government loan. There were plenty of opponents in the House,
which was similar to views that were expressed by Senate Banking Committee
members yesterday. GM's CEO said on CNBC that the company is doing
everything it can to avoid bankruptcy, as he sees a high risk that a
Chapter 11 filing (restructuring) could turn into a Chapter 7
(liquidation). Reports that Toyota Motor (TM 59.64, -3.61) is going to cut
North America production also weighed on automakers.
A risk aversion trade lifted Treasuries, with the 30-year bound rallying 3
points to yield 3.94% -- marking the lowest yield since the 30-year bond
was introduced in 1977. The 10-year note rose 44 ticks to send its yield
down to 3.36%.
In commodity trading, crude prices fell 2.4% to $53.10 per barrel. The
government's weekly energy inventory showed a larger-than-expected build
in crude and gasoline stockpiles, indicating decreased demand.DJ30 -427.47
NASDAQ -96.85 NQ100 -5.9% R2K -7.9% SP400 -7.4% SP500 -52.54 NASDAQ
Adv/Vol/Dec 2519/2.36 bln/298 NYSE Adv/Vol/Dec 187/1.63 bln/2998
3:30 pm : The major indices fall to session lows as financials (-8.9%) get
clipped.
The S&P 500, at 823.98, the Nasdaq at 1418.63, and the Dow at 8166.85, are
poised to close at their lowest levels since 2003. The S&P 500 is only a
few points above its 5-year intraday low of 818.69.
Citigroup (C 6.541, -1.86) is getting hammered, down 22.6% on the day and
at its lowest level since 1995. Citi, which said earlier today it will
buy $17.4 billion in SIV assets it advised, is one of the most heavily
traded stocks this session.
Tomorrow, economic data will be in focus with initial unemployment claims
set for release at 8:30 AM ET and the leading indicators and Philadelphia
Fed reports both being released at 10:00 AM ET.DJ30 -268.70 NASDAQ -69.64
SP500 -35.14 NASDAQ Adv/Vol/Dec 415/1.84 bln/2375 NYSE Adv/Vol/Dec
249/1.10 bln/2916
3:00 pm : Stocks catch a decent bid from session lows, with the S&P 500
paring its loss by about one percentage point.
Defensive-oriented sectors are outperforming on a relative basis,
including utilities (-0.6%), consumer staples (-1.0%) and healthcare
(-1.7%).DJ30 -191.63 NASDAQ -49.25 SP500 -26.87 NASDAQ Adv/Vol/Dec
476/1.65 bln/2298 NYSE Adv/Vol/Dec 305/991 mln/2841
2:30 pm : Stocks trade at or near session lows in broad-based weakness.
Within the S&P 500, 484 stocks are posting a loss, with 152 falling to
fresh 52-week lows. Ford (F 1.28, -0.40) is one of the largest percent
losers with a decline of 24%DJ30 -226.12 NASDAQ -58.85 SP500 -31.80 NASDAQ
Adv/Vol/Dec 416/1.46 bln/2349 NYSE Adv/Vol/Dec 260/875 mln/2881
2:05 pm : Stocks try to recover some losses, but are back on the decline
after the Fed slashed its growth forecast.
The Fed just released its Oct. 29 meeting minutes. Some FOMC members saw
potential for further rate cuts, with some predicting the economy will
shrink through mid-2009.
The Fed does not expect normal growth until 2011. It expects the economy
to grow from 0.0% to 0.3% in 2008, down sharply from its previous
expectation of 1.0% to 1.6% growth. For 2009, the Fed forecast GDP growth
will range from -0.2% to 1.1%, down from its previous guidance of 2.0% to
2.8%.
The Nasdaq composite, down 3.7%, fell to its lowest intraday level in
since April 2003. The other major indices have yet to breach their
multi-year lows. The Dow's low of 7882.51 was reached on Oct. 10 and the
S&P 500's low of 818.69 was hit on Nov. 13.DJ30 -218.16 NASDAQ -55.35
SP500 -31.18 NASDAQ Adv/Vol/Dec 435/1.34 bln/2313 NYSE Adv/Vol/Dec 304/802
mln/2822
1:30 pm : Stocks prices remain depressed in broad-based weakness.
Decliners outpace advancers by nearly 9-to-1 on the NYSE and on the Nasdaq
by 16-to-3.
The FOMC will release the minutes for its Oct. 29 meeting in about thirty
minutes. At the meeting, the FOMC cut the target fed funds rate by 50
basis points to 1.00%, noting increased economic risks and decreased
inflation risks. Since the meeting, the effective fed funds rate has
averaged 0.29% as the Fed pumped massive amounts of liquidity into the
system to stave off a financial market collapse.DJ30 -194.74 NASDAQ -53.20
SP500 -27.63 NASDAQ Adv/Vol/Dec 429/1.18 bln/2293 NYSE Adv/Vol/Dec 314/705
mln/2789
1:00 pm : Stocks trade near recently reached session lows. Treasuries
continue to rally. The 10-year note is up 38 ticks, sending its yield
down to 3.39%. The 30-year bond is up more than two points, sending its
yield to 3.99%.
Gold prices are up only 0.4% to $735.40 per ounce after trading with a
gain of 4.4% at $764.80 per ounce earlier this session. Gains were pared
as the dollar recovered to the unchanged mark from a loss of 1.4%.DJ30
-158.66 NASDAQ -50.31 SP500 -25.22 NASDAQ Adv/Vol/Dec 419/1.08 bln/2276
NYSE Adv/Vol/Dec 300/645 mln/2790
12:30 pm : The major indices extend their declines, with the S&P 500 down
more than 3% in broad-based weakness.
Shares of Yahoo! (YHOO 10.11, -1.44) extended losses after Microsoft's
(MSFT 18.92, -0.70) CEO said the company is no longer interested in
acquiring Yahoo, but is open to looking into a possible search
collaboration. Yahoo shares gained 8.2% yesterday on news that Yahoo CEO
Jerry Yang was stepping down, raising speculation that MSFT may show
renewed interest.DJ30 -207.80 NASDAQ -51.22 SP500 -28.84 NASDAQ
Adv/Vol/Dec 426/956 mln/2228 NYSE Adv/Vol/Dec 300/579 mln/2785
12:05 pm : Stocks are down sharply at midday as economic worries and
speculation over the fate of U.S. automakers keeps buyers on the
sidelines.
October CPI fell the most on record, which is good news in terms of the
inflation outlook, but also represents the weakness of the economy.
Specifically, CPI fell 1.0% month-over-month as energy prices plummeted
8.6%. Prices also declined outside of energy, indicating weak demand,
with core CPI falling 0.1% as used car prices dropped 2.4% and apparel
prices fell 1.0%.
The latest new residential construction data fell to the lowest levels on
record, and provide another weak point for GDP calculations. October
Housing starts declined 4.5% month-over-month to a seasonally adjusted
annual rate of 791,000, which was slightly higher than the consensus
estimate of 780,000. Building permits dropped 12% to a seasonally
adjusted rate of 708,000, which was worse than the consensus estimate of
774,000.
All ten of the economic sectors are posting a loss, ranging from consumer
staples (-1.0%) to financials (-6.7%).
The financial sector fell to a fresh 52-week intraday low. Selling
interest is broad-based, with 83 of its 84 components posting a loss.
Automakers (-19.4%) extended losses as executives from General Motors (GM
2.65, -0.43), Ford (F 1.38, -0.30) and Chrysler, and the head of the UAW
testify before the House Financial Services Committee in an attempt to
secure a government loan. Similar to views Senate Banking Committee
members expressed yesterday, there are plenty of opponents in the House.
Reports that Toyota Motor (TM 61.01, -2.24) plans to cut North America
production is also weighing on automakers.
In commodity trading, oil prices ($53.90, -0.9%) reversed early gains
after the government's weekly data showed larger-than-expected builds in
crude oil and gasoline stockpiles.DJ30 -194.02 NASDAQ -45.86 SP500 -25.95
NASDAQ Adv/Vol/Dec 458/839 mln/2159 NYSE Adv/Vol/Dec 355/511 mln/2695
11:30 am : The S&P 500 extends its decline to nearly 3% as selling
pressure picks up. The financial (-6.6%), material (-3.5%) sectors have
both hit fresh 52-week lows. Retailers (-4.1%) have also fallen to a new
52-week low.
General Mills (GIS 65.12, -0.21) reaffirmed its fiscal year 2009 guidance
of earnings between $3.81 and $3.85 per share, which is short of the $3.90
consensus estimate.
Automakers (-16.1%) continue to decline as the House Financial Services
Committee testimony continues. Reports that Toyota Motor (TM 61.00,
-2.25) is cutting North American production is also weighing on U.S.
automakers.DJ30 -188.05 NASDAQ -35.94 SP500 -24.85 NASDAQ Adv/Vol/Dec
512/686 mln/2072 NYSE Adv/Vol/Dec 337/433 mln/2665
11:00 am : Oil prices ($53.97, -0.8%) reverse into the red after both
crude oil and gasoline inventories rose by a larger than expected amount.
Stocks also go on the retreat. Selling interest is broad-based, with all
ten sectors posting a decline.
The financial sector (-5.1%) remains under pressure, with Hartford
Financial Services Group (HIG 7.37, -2.29) down 23.6%. The financial
sector has hit a fresh multi-year intraday low.
As stocks slip, longer-term Treasuries rally as investors seek safety.
The 10-year note is up 23 ticks and the 30-year bond is up 55 ticks.DJ30
-134.45 NASDAQ -26.78 SP500 -19.12 NASDAQ Adv/Vol/Dec 634/538 mln/1872
NYSE Adv/Vol/Dec 436/342 mln/2508
10:35 am : Stocks briefly recover into positive ground, but renewed
selling interest sends the stock market back into the red.
Just hitting the wires, the Department of Energy said that crude
inventories increased by 1.6 million barrels during the week ended
November 14, which was more than the expected increase of 1 million
barrels. Gasoline inventories rose by 539,000 barrels. Oil prices were
up 1.2% to $55.05 per barrel just prior to the announcement.
Gold futures are in rally mode, climbing 3.6% to $758.80 per ounce. Gold
is benefiting from a 1.2% drop in the dollar.
U.S. automakers are currently testifying before the House Financial
Services Committee, which follows their appearance before the Senate
Banking Committee yesterday. Both Ford (F 1.49, -0.19) and General Motors
(GM 2.75, -0.34) have fallen to multi-decade lows this session as many
lawmakers are showing resistance to giving the automakers aid.DJ30 -36.00
NASDAQ -2.46 SP500 -4.39 NASDAQ Adv/Vol/Dec 934/414 mln/1487 NYSE
Adv/Vol/Dec 780/269 mln/2106
10:00 am : The major indices extend their opening decline, largely due to
a 4.0% drop in the financial sector.
Citigroup (C 7.87, -0.51) is down 6.0%. The company said in order to
wind-down Citi-advised structured investment vehicles, it has committed to
acquire the remaining assets of the SIVs at their current fair value,
which is estimate to be $17.4 billion, net of cash. Citi said it will be
a nearly cashless transaction.
The utilities (+0.4%) and consumer staples (+0.3%) sectors stand alone in
positive territory.DJ30 -51.53 NASDAQ -5.77 SP500 -6.54 NASDAQ Adv/Vol/Dec
914/205 mln/1332 NYSE Adv/Vol/Dec 736/152 mln/2046
09:35 am : The stock market opens with modest losses.
Consumer prices fell by the largest amount since at least 1947, fueled by
a sharp drop in energy prices. Prices outside of energy also fell,
reflecting the weak economy, and resulting in core CPI falling 0.1%.
Oil is up 1.2% to $55.05 per barrel as the dollar falls 1.0%. The
government will release its weekly energy inventory data at 10:35 AM
ET.DJ30 -32.90 NASDAQ -5.24 SP500 -3.03
09:14 am : S&P futures vs fair value: -5.10. Nasdaq futures vs fair value:
-2.80. Futures recover from their worst levels, but still suggest a lower
start. Oil futures are down 0.2% to $54.28 per barrel ahead of the
government's weekly energy report at 10:35 AM ET.
09:01 am : S&P futures vs fair value: -11.10. Nasdaq futures vs fair
value: -9.00. Stock futures fall to session lows. The Dow components
that are trading in the premarket are all posting a loss, with General
Motors (GM) down 6.2%. Dow futures are 103 points below fair value.
08:35 am : S&P futures vs fair value: -6.00. Nasdaq futures vs fair value:
-3.30. Futures get a slight boost as two economic reports hit the wires.
October CPI fell 1.0% month-over-month, which was a larger-than-expected
decrease compared to consensus estimate of -0.8%. Core CPI, which excludes
food and energy, fell 0.1%, versus the expected increase of 0.1%. On a
year-over-year basis, CPI is up 3.7% and core CPI is up 2.2%. Separately,
there were 791,000 housing starts in October on a seasonally adjusted
annual basis, which was better than the expected reading of 780,000.
There were 708,000 building permits, which fell well short of the
consensus estimate of 774,000.
08:02 am : S&P futures vs fair value: -9.00. Nasdaq futures vs fair value:
-7.30. Futures suggest a lower open and are approaching session lows
ahead of the new residential construction and CPI reports at 8:30 AM ET.
After the close yesterday, GM (GM), Ford (F) and Chrysler testified before
the Senate Banking Committee in an attempt to secure government loans for
the struggling automakers. On a related note, Toyota (TM) said it will
cut output by by stopping all production at its North American factories
for two days next month, according to Reuters. Boeing (BA) is adding as
much as 10 weeks to its original delivery date for all jetliners in its
backlog as it recovers from its machinists strike, according to the Wall
Street Journal's sources. Citigroup (C) is liquidating a hedge fund, which
managed $4.2 billion at its peak, after it lost 53% of its value, the
Financial Times reports. Best Buy (BBY) had its credit rating downgraded
to BBB- from BBB at Standard & Poor's, citing the its belief that Best Buy
will be more challenged than previously expected due to the weak economic
environment.
06:39 am : S&P futures vs fair value: -5.90. Nasdaq futures vs fair value:
-3.50.
06:39 am : Nikkei...8273.22...-55.20...-0.70%. Hang
Seng...12815.80...-100.10...-0.80%.
06:39 am : FTSE...4139.41...-69.10...-1.60%.
DAX...4537.55...-41.90...-0.90%.
http://finance.yahoo.com/marketupdate/overview?u
=====
Dow Plunges 400 to Below 8,000 as S&P 500 Skids to 5-Year Low- AP
Wall Street hit levels not seen since 2003, with the Dow Jones industrial
average falling below the 8,000 mark, as the fate of Detroit's Big Three
automakers and the economy disheartened investors. ...
http://us.rd.yahoo.com/finance/news/topnews;_ylt=AlMnF4Zak3X.VGvArWpQJzC7YWsA/
*http://biz.yahoo.com/ap/081119/wall_street.html
=====
Consumer prices drop record 1 percent in October Wednesday November 19,
2:26 pm ET
By Martin Crutsinger, AP Economics Writer Consumer prices drop by largest
amount in past 61 years as energy prices see record plunge
WASHINGTON (AP) -- Consumer prices plunged by the largest amount in the
past 61 years in October as gasoline pump prices dropped by a record
amount.
The Labor Department said Wednesday that consumer prices fell by 1 percent
last month, the biggest one-month decline on records that go back to
February 1947. The drop was twice as large as the 0.5 percent decrease
that analysts had been expecting and marked the third straight month that
prices had either fallen or been unchanged. ...
http://biz.yahoo.com/ap/081119/economy.html
=====
Holiday retail traffic predicted to decrease 9.9%
* Julianne Pepitone, CNNMoney.com contributing writer * Wednesday
November 19, 2008, 2:02 pm EST
....
http://finance.yahoo.com/news/Holiday-retail-traffic-cnnm-13621861.html
=====
Citi shares hit 15-year low as analyst cuts view Citi shares plummet to a
15-year low as analyst predicts more write-downs, cuts estimate
* Stephen Bernard, AP Business Writer * Wednesday November 19, 2008,
4:13 pm EST
....
http://finance.yahoo.com/news/Citi-shares-hit-15year-low-as-apf-13623867.html
=====
Fed sharply lowers forecasts, hints of rate cut Fed sharply lowers
economic forecasts for this year, 2009; signals another rate cut coming
* Jeannine Aversa, AP Economics Writer * Wednesday November 19, 2008,
3:13 pm EST
....
http://finance.yahoo.com/news/Fed-sharply-lowers-forecasts-apf-13621937.html
=====
--
Regards, Curly
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