Someone help!!! The bear is eating the market and its participants. Today is just further evidence of a full blown bear market, and the recession isn't even yet officially underway. The short sale ban in financial stocks has ended, and that appears to have allowed some acceleration to the selling.
Brunswick Corporation (NYSE: BC) accelerated layoffs and forecast losses for the year today. Shares were down 19% at $8.05 right before the close to 18-year lows.
Alcoa Inc. (NYSE: AA) missed earnings estimates and was put on S&P credit watch "negative" after the severity of the miss. Alcoa was down almost 14% at $12.67 immediately before the close.
General Motors Corp. (NYSE: GM) was available to be short-sold yet again, and S&P put it on negative credit outlook today. Shares went to lows not seen since 1950 from back when cars cost something like $3,000.00 brand new. GM probably made more per car then, too. GM was down 30% at $4.79 immediately before the close.
Morgan Stanley (NYSE: MS) fell yet again on fears that its Japanese financing isn't going to come through and as short sellers pounced on the stock. Shares were down 24% at $12.51 right before the close.
General Electric Co. (NYSE: GE) fell 6% to $19.38 immediately before the close ahead of Friday morning's earnings report. It is impossible to expect anything great.
Today's market moves almost felt irrational and counter-intuitive. We had a global coordinated rate cut from the U.S., Canada, the U.K, The ECB, Switzerland, and China. Some might have thought this would create a 1,000 point rally, but many sellers are still winning out and the intra-day volatility was more than present.
The DJIA opened down around 200 points, rallied to being up roughly 200 points, went negative again to roughly the same levels, and then staged an afternoon rally. And then the selling came on again at the end of the day. Historically, this is what traders would look for as capitulation. Unfortunately, these are extremely unusual times and history books are of little use.
Bank of America Corp. (NYSE: BAC) sold its 455 million shares secondary offering at $22.00, yet selling took shares down to under $20.00 early in the day. Shares were down almost 8% at $21.95 right before the close.
TheStreet.com's Jim Cramer says you can use the bounce today to sell names with earnings troubles.
A suggestion: If you know that your company has earnings problems, you are going to get a lift today that will allow you to get out at a better price. What do I mean about earnings problems? Let's consider Alcoa (NYSE: AA) (Cramer's Take). That was a dismal quarter. The stock would not be up if it weren't for the rate cuts.
Or how about the financials? We learned last night that MetLife (NYSE: MET) (Cramer's Take) needed a lot more capital. We have to presume all insurance companies need more capital. So get ready or sell and buy lower. Citigroup (NYSE: C) (Cramer's Take) is in the same boat. It is not going to have a good quarter and it needs to do a capital raise. You are going to get a terrific opportunity to sell today.
I also feel the same for most retailers. We have to be very careful here because unless you are in a retailer that picks up share in hard times, you need to use the strength to sell.
What can be held? I think that you can keep the stocks with good dividends that are able to pay them. You can certainly buy stocks that are trading near their cash.
The current earnings season officially got under way last night as Alcoa (NYSE: AA), the first DOW stock to report, released its third quarter numbers, and the results were not too pretty.
Going into last night's earnings release, analysts had been expecting Alcoa to earn 53 cents per share in its third quarter, but the company reported much lower actual numbers -- 33 cents per share for the quarter, or $268 million. Weak demand, coupled with falling aluminum prices were the main culprits during the quarter.
During the same period last year, the company showed earnings of 63 cents per share, or $555 million.
Since hitting an all time high in July, aluminum prices have been pulling back sharply over the past few months, and have dipped around 32% from the highs set over the summer.
The company also announced that it would be trying to preserve its cash by suspending its stock buyback plan. Previously, the company had approved a 25% buyback of its outstanding stock, and had already purchased 12%, but will stop the buying for the time being.
Shares of the company are trading down a little over 3% this morning in the premarket.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
U.S. stock futures turned higher Wednesday after the Federal Reserve, in a coordinated move with other central banks, cut rates by half a point to 1.5%, in an effort to help credit markets and boost financial markets. Before the rate cut, futures were lower as Wall Street was about to join global markets in a world-wide plunge that saw the Nikkei down 9.4% and European main markets down 5-6%. On the economic front, August pending home sales released later today might crimp the mood somewhat.
Alcoa Inc. (NYSE: AA) kicked off earnings season after the close Tuesday. The world's third-largest aluminum producer reported a 52% drop in third quarter profit as sharply lower aluminum prices and lower demand hurt results. AA shares are down 4% in pre-market trading.
American International Group Inc. (NYSE: AIG) -- in what could only be described as unbelievable nerve, days after the $85 billion federal bailout loan, AIG spent $440,000 on a posh California retreat for its executives that included spa treatments and much more. Lawmakers were enraged over the thousands of dollars AIG spent on executives even as the company was staving off bankruptcy. It seems it is morally bankrupt. AIG stock is recovering 5.4% this morning after the rate cut.
7 Great Companies for $7 or Less These battered stocks are ripe for a rebound. They include Animal Health International, Build-a-Bear Workshop, Blockbuster, Global Cash Access Holdings, Great Wolf Resorts, Hackett Group and Spansion. http://www.kiplinger.com/magazine/archives/2008/11/7_cheap_stocks.html Biggest Losers: 15 Stocks That Have Plummeted This Year The following list is of selected familiar names and large stocks that have plunged significantly over these time periods. It does not include the obvious names such as AIG, Wachovia, GM and the likes, but decent stocks we all liked and knew over the years. Among them are Alcoa, American Express, Apple, Boeing, Citigroup, Dell, eBay, General Electric, Google, Merck, Motorola, Sprint Nextel, Research in Motion, Sirius XM and Whole Foods are all down significantly more than 25% which is what the Dow is off in 2008. http://www.bloggingstocks.com/2008/10/06/big-losers-15-large-stocks-that-have-plummeted/
U.S. stock futures were higher Tuesday morning, after stocks on Monday plummeted to lows not seen since in years as the Dow closed below 10,000 for the first time in four years. After Australia's central bank cut interest rates by the largest amount speculation regarding an interest rate cuts from central banks around the world helped alleviate some worries. Meanwhile, oil rebounded to around $90 a barrel Tuesday in Asia after plunging to an 8-month low Monday, and Bank of America issued a profit warning. Alcoa will unofficially kick off earnings season today.
Bank of America (NYSE: BAC) shares are trading 9.6% lower in pre-market action after it said Monday its third-quarter profit slid 68% to 15 cents a shares, below analysts' estimates of 61 cents a share. BAC also announced a dividend cut and raise $10 billion in stock offering. Analysts from Robert W. Baird and Deutsche Bank proceeded to cut their own estimates.
Advanced Micro Devices Inc. (NYSE: AMD) shares are jumping 18% in pre-market trade after it confirmed plans to spin off its manufacturing operations to a new joint venture, Foundry Co., with an Abu Dhabi investment firm. The other part will be focused on designing microprocessors.
After Monday, there are probably no more doubters left. We are in a bear market and we are in a recession and anyone arguing otherwise is living in a made-up world. The only thing left to argue over is how to get out of this dire situation, and how long it will last. Looking at stocks since the beginning of the year, and over the past month since the feds seized Fannie and Freddie, the picture isn't pretty. Many familiar names have vanished, many -- luckily -- have just seen their market value cut about in half. What once were some large stocks are now some of the smaller ones, including some DJIA components.
The following list is of selected familiar names and large stocks that have plunged significantly over these time periods. It does not include the obvious names such as AIG, Wachovia, GM and the likes, but decent stocks we all liked and knew over the years. By comparison, the Dow industrials is down 25% year-to-date, the S&P 500 down 28% during the same time and the Nasdaq Composite down nearly 30%. Over the past month (since the Fannie/Freddie rescue), the Dow declined over 11%, the S&P 500 declined nearly 15% and the Nasdaq declined over 17%.
Alcoa (NYSE: AA) -- aluminum giant Alcoa is feeling the pains of a global economic slowdown and higher costs even as aluminum prices remain high. Alcoa shares hit a 10-year low Monday. YTD, AA market value has been cut in half, and over the past month alone Alcoa lost 36% of its value.
American Express (NYSE: AXP) -- the credit card company had large exposure to bad loans that affected its results. With analysts expecting credit card debt to be the next shoe to drop, AXP may see its stock fall more than the 42.2% it already has YTD. It plunged 23.68% this past month.
Apple (NASDAQ: AAPL) -- even this consumer tech darling couldn't escape the claws of the bears as worries over demand for its products increased. AAPL, one of the stocks that actually had a positive day Monday and closed at $98.14, is down 50.45% YTD, 38.73% this past month.
On October 24 2003, the Dow closed at 9,582.46. It was the last time the Dow Jones Industrial Average closed below 9,600. Today, it revisited that territory when it plunged 753 points to 9,572.08, and came within striking distance of its biggest one-day point decline from last week -- 778.
While last week blue chips suffered from fears Congress wouldn't pass the bailout package, this week stocks plunge despite the approved -- and enlarged -- rescue plan. As the global financial crisis deepens, its effects cascade to more areas and over more industries.
Fears of a global economic slowdown further aggravated mood on the Street and markets are seeing stocks in a free-fall. It seems that realization has hit for how long it would take for the bailout to allow some relief, how long it would take for the housing market to recover, while all along economic fundamentals such as the job market are deteriorating.
All 30 of the Dow's components were in the red, with Alcoa (NYSE: AA) taking the dubious title of the Dow stock that's declining most -- down over 12%. Following closely are Citigroup (NYSE: C), American Express (NYSE: AXP) and Boeing (NYSE: BA) -- each down more than 10%.
The Nasdaq composite is meanwhile down nearly 160 points, or over 8%, to 1,787. The S&P 500 down nearly 7.5%, or over 81 points to 1,016.
The Dow Jones Industrial Average plunged 336.43 points, or 3.26%, to below 10,000 -- 9988.95 -- for the first time in four years, since Oct. 29, 2004. Similarly, the S&P 500 dropped 3.66% and the Nasdaq declined 3.97%. As investors looked for safety they sold stocks and piled into government bonds.
As expected, Wall Street joined a global selloff today as the financial crisis seemed to have deepened, especially in Europe. In addition, fears of a global economic slowdown dampened investors mood further. The expected boost from the $700 billion bailout plan approved Friday was non-existent as the weekend was full of news from Europe regarding the cascading financial crisis.
The financial crisis and the economic slowdown are now hitting the next set of stocks like Aluminum giant Alcoa Inc. (NYSE: AA) -- down about 8% -- or Caterpillar (NYSE: CAT) -- down over 5% -- both companies expected to have difficulties either accessing funds or suffer from the global economic slowdown, or both. News of eBay (NASDAQ: EBAY) -- down 5.5% -- laying off over 1,000 employees didn't help, only served as a reminder of the bad employment numbers from Friday and the expected worsening conditions in the jobs market.
Alcoa Inc. (NYSE: AA) kicks off the new earnings seasons when it reports third quarter results on Tuesday. The Pittsburgh-based aluminum producer, which celebrated its 120th anniversary with the launch of its website, is expected to post a profit of 54 cents per share, down 15.6% from the same quarter of last year, on revenue of $7.2 billion, down 2.1%. While Alcoa has tended to fall short of estimates in recent quarters, in the second quarter it did offer a positive surprise of almost 3%. Its long-term earnings per share growth forecast is 14.8%, a little less than the S&P 500, and analysts polled by Thomson Financial on average recommend buying Alcoa, and have for more than 90 days. Shares reached a new 52-week low last week, and are down 48.9% from a year ago.
General Electric Co. (NYSE: GE) is also expected to report a slip in earnings this week. Analysts anticipate that the conglomerate will post a third-quarter profit of 45 cents per share, down just 6.3% from a year ago, on revenue of $47.7 billion, which is up 12.1%. GE has tended to eke out small positive surprises in recent quarters, by less than 1% in the second quarter. GE's long-term earnings per share growth forecast is only 11.0%, which is less than the sector average and the S&P 500. The consensus recommendation has recently swung to hold GE, but Warren Buffett has bought in to the tune of $3 billion. GE also reached a new 52-week low last week as the markets tumbled. GE shares are down 48.1% from a year ago.
TheStreet.com's Jim Cramer says without the Paulson plan, every component is in trouble. Let's take a look.
Without the Paulson plan, or if the plan is so watered down and delayed, I have been saying all bets are off and we could be in for a huge swoon. How huge?
I like to sit down and noodle on the actual components of the Dow Jones Industrial Average to give you a real sense of what can go wrong. And there is so much going wrong. The credit markets are vanishing, the earnings are vanishing and the only hope is a plan that ignites credit markets, forces money off the sidelines and gets this economy and the worldwide economy moving again.
Not long ago, I postulated that this market is literally repealing all of the moves since the Brazil-Russia-India-China emergence that gave us better markets to sell into than just the U.S. With the collapse of Chinese growth -- they have simply ceased to be importers since the summer -- the inflation in India, the war in Russia and a U.S.-led slowdown in Brazil (although that remains a robust market) BRIC is more like having a brick around your neck than a wind at your back.
Meanwhile, the peak in energy and the collapse of the financial system have left both of those groups in disarray with valuations simply too difficult to pin down, so you retreat to worst-case scenarios where you can at least find some terra firma -- mainly where stocks were last time things were this bad.
U.S. stock futures edged lower Wednesday morning after the government announced late Tuesday it would help save AIG. Investors may be relieved with the action on AIG and even the Federal Reserve decision not to move Tuesday, leaving room for a future rate cut, there are still big concerns about the state of financial markets. Investors today will also get data from on building permits and housing starts for the month of August. Oil rebounded today ahead of inventory report to over $93 a barrel.
The Federal Reserve said late Tuesday that it would to lend $85 billionAmerican International Group (NYSE: AIG), taking a 79.9% stake in the company. AIG shares are still sinking 30% in pre-market trading.
Meanwhile, as the government refused to help Lehman Brothers (NYSE:LEH) and the company filed for Chapter 11 Monday, Barclays PLC (NYSE: BCS) said it would buy Lehman's banking and capital markets business for $250 million. Barclays walked away from the deal a few days ago, perhaps waiting for a better price, in what many say BAC should have done with Merrill. BCS shares are up over 5% in pre-market trading, LEH's down over 25%.
Morgan Stanley (NYSE: MS) reported its quarterly earnings early to calm investors, posting better-than expected results. It seems the last two major independent investment houses, Morgan and Goldman Sachs (NYSE: GS), which also reported earning Tuesday, both posted third-quarter profits despite continued chaos in the financial markets.
J.P. Morgan Chase (NYSE: JPM) is reportedly in advanced talks to make a bid for Washington Mutual (NYSE: WM).
TheStreet.com's Jim Cramer says until they begin buying again, these stocks are in for a lot of pain.
It's China, stupid. We have to stop kidding ourselves that the only reason commodity plays are going down is because of selling by hedge funds. Sure, it's exacerbating and speeding it up and taking it to levels where it may not even matter whether China exists, but it is all China, or more specifically, the absence of China.
Take steel. An article in the Financial Times about steel consumption last week stated point-blank that it is going to slow "markedly" in the second half of this year. When you combining tight central banks in Europe -- totally as ridiculous as the tight money in the U.S. while it was obvious what was going to happen -- with China missing from the steel market, you get U.S. Steel (NYSE: X) (Cramer's Take) down into the $80s pretty fast, because you get an inventory buildup quickly, and that leads to an endless series of price cuts as the world was going full-tilt not that long ago. U.S. Steel benefits because at least it didn't lock in sky-high iron ore prices --sell that Cleveland-Cliffs (NYSE: CLF) (Cramer's Take) if you are still in -- but still how do you value a company that could have its earnings cut in half? That's how steel trades.
Someone help!!! The bear is eating the market and its participants. Today is just further evidence of a full blown bear market, and the recession isn't even yet officially underway. The short sale ban in financial stocks has ended, and that appears to have allowed some acceleration to the selling. 
The current earnings season officially got under way last night as 
U.S. stock futures turned higher Wednesday after the Federal Reserve, in a coordinated move with other central banks, 
After Monday, there are probably no more doubters left. We are in a bear market and we are in a recession and anyone arguing otherwise is living in a made-up world. The only thing left to argue over is how to get out of this dire situation, and how long it will last. Looking at stocks since the beginning of the year, and over the past month since the feds seized Fannie and Freddie, the picture isn't pretty. Many familiar names have vanished, many -- luckily -- have just seen their market value cut about in half. What once were some large stocks are now some of the smaller ones, including some DJIA components.
Alcoa Inc.
Comfort Zone Investing: How this all might play out
Stock picks and pans for troubled times: AAPL, COST, EWBC, IBM, YUM, PG ...
NYU's Roubini: 'All fronts' approach necessary to end global financial crisis 
