Portfolio Crafter
11-20-2007, 12:41 AM
End of Day Market Summary - Monday, November 19, 2007
by Portfolio Crafter (http://www.wealthpire.com/cmd.php?Clk=1838416)
Stocks accelerated their losses to trade at three-month lows with investors disheartened by Goldman Sachs' downgrade of Citigroup Inc. and the broker's projection of more credit-related hits ahead at the banking powerhouse. Forecasts of a weak holiday shopping season added to market fears of a U.S. recession down the road.
The Dow Jones industrial average closed down 218.35 or 1.66% to 12,958.44, the broader S&P 500 closed down 25.47 or 1.75% to 1,433.27, and the tech-fueled Nasdaq composite closed down 43.86 or 1.66% to 2,593.38.
Market breadth was negative. On the New York Stock Exchange, losers topped winners over five to one on volume of 1.7 billion shares. On the Nasdaq, decliners topped advancers by more than four to one on volume of 2.2 billion shares.
Downgrading of Citigroup sent the overall market lower, as investors were reminded that the breadth of the credit market fallout is not really known and could be a lot worse than has been expected. This was compounded by bets that consumer spending will be ho-hum. Weak results and a disappointing forecast from Lowe's added to worries about the consumer's ability to keep spending, ahead of Black Friday, the day after Thanksgiving and the unofficial kickoff to the holiday shopping period.
Another industry report showed that home builder confidence remained at record low levels in November. Additionally, the Fed hasn't been talking liberally enough since the last meeting about lowering interest rates again. Therefore, there's a fear that they could be getting behind the curve.
Shares of Citigroup closed down $2.00 or 5.88% to $32.00, after Goldman Sachs moved the company to "sell" from "neutral" and said the bank will likely have to take $15 billion in write downs over the next two quarters due to bets on risky debt. On Nov. 4, Citigroup had expected to write down $8 billion to $11 billion in the fourth quarter, following a write down of more than $6 billion in the third quarter.
Stock of Freddie Mac closed down $3.22 or 7.91% to $37.50, after Credit Suisse said that the company could take up to $5 billion in losses due to its bets on risky debt.
In M&A news, shares of Celgene closed down $0.90 or 1.39% to $64.00, after it stated that it will buy Pharmion for around $2.9 billion in cash and stock. Shares of Pharmion closed up $15.84 or 32.14% to $65.12.
Shares of Xerox Corp. closed up $0.26 or 1.64% to $16.08, after it announced its first dividend in six years along with a robust outlook, because of higher demand for its color-copier equipment and services. Xerox last paid a share quarterly in 2001 as it wrestled with an accounting scandal in its Mexico operations, high costs and junk-rated debt. It also predicted 2008 earnings of $1.31 to $1.35 a share, and 2009 earnings of $1.45 to $1.50 a share.
U.S. light crude oil for January delivery rose 80 cents to $94.64 a barrel on the New York Mercantile Exchange.
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by Portfolio Crafter (http://www.wealthpire.com/cmd.php?Clk=1838416)
Stocks accelerated their losses to trade at three-month lows with investors disheartened by Goldman Sachs' downgrade of Citigroup Inc. and the broker's projection of more credit-related hits ahead at the banking powerhouse. Forecasts of a weak holiday shopping season added to market fears of a U.S. recession down the road.
The Dow Jones industrial average closed down 218.35 or 1.66% to 12,958.44, the broader S&P 500 closed down 25.47 or 1.75% to 1,433.27, and the tech-fueled Nasdaq composite closed down 43.86 or 1.66% to 2,593.38.
Market breadth was negative. On the New York Stock Exchange, losers topped winners over five to one on volume of 1.7 billion shares. On the Nasdaq, decliners topped advancers by more than four to one on volume of 2.2 billion shares.
Downgrading of Citigroup sent the overall market lower, as investors were reminded that the breadth of the credit market fallout is not really known and could be a lot worse than has been expected. This was compounded by bets that consumer spending will be ho-hum. Weak results and a disappointing forecast from Lowe's added to worries about the consumer's ability to keep spending, ahead of Black Friday, the day after Thanksgiving and the unofficial kickoff to the holiday shopping period.
Another industry report showed that home builder confidence remained at record low levels in November. Additionally, the Fed hasn't been talking liberally enough since the last meeting about lowering interest rates again. Therefore, there's a fear that they could be getting behind the curve.
Shares of Citigroup closed down $2.00 or 5.88% to $32.00, after Goldman Sachs moved the company to "sell" from "neutral" and said the bank will likely have to take $15 billion in write downs over the next two quarters due to bets on risky debt. On Nov. 4, Citigroup had expected to write down $8 billion to $11 billion in the fourth quarter, following a write down of more than $6 billion in the third quarter.
Stock of Freddie Mac closed down $3.22 or 7.91% to $37.50, after Credit Suisse said that the company could take up to $5 billion in losses due to its bets on risky debt.
In M&A news, shares of Celgene closed down $0.90 or 1.39% to $64.00, after it stated that it will buy Pharmion for around $2.9 billion in cash and stock. Shares of Pharmion closed up $15.84 or 32.14% to $65.12.
Shares of Xerox Corp. closed up $0.26 or 1.64% to $16.08, after it announced its first dividend in six years along with a robust outlook, because of higher demand for its color-copier equipment and services. Xerox last paid a share quarterly in 2001 as it wrestled with an accounting scandal in its Mexico operations, high costs and junk-rated debt. It also predicted 2008 earnings of $1.31 to $1.35 a share, and 2009 earnings of $1.45 to $1.50 a share.
U.S. light crude oil for January delivery rose 80 cents to $94.64 a barrel on the New York Mercantile Exchange.
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