Portfolio Crafter
11-10-2007, 02:25 PM
End of Day Market Summary - Friday, November 9, 2007
by Portfolio Crafter (http://www.wealthpire.com/cmd.php?Clk=1838416)
Stocks fell for a fourth day out of five, ending a dismal week that saw the Nasdaq Composite Index drop almost 7% and financial stocks take a hammering as bigger sub-prime mortgage losses were revealed almost every day. Mortgage-induced losses at Wachovia and Fannie Mae riled traders already nervous the woes could spread to the wider economy.
The Dow Jones industrial average closed down 223.55 or 1.69% to 13,042.74, the broader S&P 500 closed down 21.07 or 1.43% to 1,453.70, and the tech-fueled Nasdaq composite closed down 68.06 or 2.52% to 2,627.94. For the week, the Dow closed down 4.1%, the S&P lost 3.7% and the Nasdaq was down 6.9%.
Market breadth was negative. Losers topped winners by 3 to 1 on the New York Stock Exchange as 1.8 billion shares traded hands. Decliners beat advancers by 2 to 1 on volume of 3 billion shares.
There is an unprecedented number of negatives coming at the market. These include the triple threat of restricted access to credit, a downturn in the housing sector and near record oil prices. Investors worried about the wider economic impact of losses at financial companies and the growing ranks of consumers saddled with expensive mortgages and high energy bills.
On the economic front, the EU has forecast a weak growth which is likely to slow to 2.4% next year and in 2009. The University of Michigan report on consumer sentiment came in well below estimates. The only positive news was that the trade deficit fell to the lowest level in 28 months as a falling dollar helped boost exports.
Shares of Wachovia closed up $0.35 or 0.87% to $40.65, after stating that the complex debt instruments it held in its portfolio declined in value by an estimated $1.1 billion before taxes in October, leading to a $600 million loan-loss charge for the current quarter. It had reported $1.3 billion in pre-tax losses in the third quarter tied to pools of debt backed by home loans. As of Sept. 30, Wachovia had $1.8 billion in CDO exposure; after the latest write downs, the exposure is now $676 million.
Stock of Fannie Mae closed down $0.80 or 1.61% to $49.00, after stating that its profits fell by half over the last nine months. It had an EPS of $1.17, down from $3.16 in the same period last year.
Shares of Citigroup closed down $0.20 or 0.61% to $33.10, as it expects to write down a further $8 billion to $11 billion in the fourth quarter due to credit- and mortgage-related problems.
Stock of Merck closed up $1.13 or 2.06% to $55.90, after announcing that it will pay $4.85 billion to resolve most of the 27,000 claims involving its pain medication Vioxx. The company will pay the money into a fund, and people who claim they were hurt by Vioxx can petition for money.
Oil prices resumed their assault on $100 a barrel. U.S. light crude for December delivery rose 86 cents to settle at $96.32 a barrel on the New York Mercantile Exchange.
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by Portfolio Crafter (http://www.wealthpire.com/cmd.php?Clk=1838416)
Stocks fell for a fourth day out of five, ending a dismal week that saw the Nasdaq Composite Index drop almost 7% and financial stocks take a hammering as bigger sub-prime mortgage losses were revealed almost every day. Mortgage-induced losses at Wachovia and Fannie Mae riled traders already nervous the woes could spread to the wider economy.
The Dow Jones industrial average closed down 223.55 or 1.69% to 13,042.74, the broader S&P 500 closed down 21.07 or 1.43% to 1,453.70, and the tech-fueled Nasdaq composite closed down 68.06 or 2.52% to 2,627.94. For the week, the Dow closed down 4.1%, the S&P lost 3.7% and the Nasdaq was down 6.9%.
Market breadth was negative. Losers topped winners by 3 to 1 on the New York Stock Exchange as 1.8 billion shares traded hands. Decliners beat advancers by 2 to 1 on volume of 3 billion shares.
There is an unprecedented number of negatives coming at the market. These include the triple threat of restricted access to credit, a downturn in the housing sector and near record oil prices. Investors worried about the wider economic impact of losses at financial companies and the growing ranks of consumers saddled with expensive mortgages and high energy bills.
On the economic front, the EU has forecast a weak growth which is likely to slow to 2.4% next year and in 2009. The University of Michigan report on consumer sentiment came in well below estimates. The only positive news was that the trade deficit fell to the lowest level in 28 months as a falling dollar helped boost exports.
Shares of Wachovia closed up $0.35 or 0.87% to $40.65, after stating that the complex debt instruments it held in its portfolio declined in value by an estimated $1.1 billion before taxes in October, leading to a $600 million loan-loss charge for the current quarter. It had reported $1.3 billion in pre-tax losses in the third quarter tied to pools of debt backed by home loans. As of Sept. 30, Wachovia had $1.8 billion in CDO exposure; after the latest write downs, the exposure is now $676 million.
Stock of Fannie Mae closed down $0.80 or 1.61% to $49.00, after stating that its profits fell by half over the last nine months. It had an EPS of $1.17, down from $3.16 in the same period last year.
Shares of Citigroup closed down $0.20 or 0.61% to $33.10, as it expects to write down a further $8 billion to $11 billion in the fourth quarter due to credit- and mortgage-related problems.
Stock of Merck closed up $1.13 or 2.06% to $55.90, after announcing that it will pay $4.85 billion to resolve most of the 27,000 claims involving its pain medication Vioxx. The company will pay the money into a fund, and people who claim they were hurt by Vioxx can petition for money.
Oil prices resumed their assault on $100 a barrel. U.S. light crude for December delivery rose 86 cents to settle at $96.32 a barrel on the New York Mercantile Exchange.
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