When you have a trading day like today and it comes after a week like this week, it is hard to determine if you are happier that the rally came on at the end of the day or if you are happier that the closing bell came to end the week. The markets closed down today but today felt like a win when you consider the 400 point move higher off of late day lows in the last hour. There are hopes of a coordinated G7 announcement this week along with some fresh hopes that the Treasury will make new banking injections and help in the LIBOR woes. The bond traders left at 2:00 PM early for Columbus Day, and the bond market is closed Monday.
Here are the unofficial closing bell levels, and remember that the exchange takes much longer to find actual close levels right now: DJIA 8,477.40 -101.79 -1.19% NASDAQ 1,649.51 +4.39 +0.27% S&P500 901.24 -8.68 -0.95% 10YR T-NOTE 3.861% +0.027% Top Analyst Upgrades
Barclays plc (NYSE: BCS) fell on reports that the financial bank giant is considering raising capital as part of the government's bailout package in the UK. Shares were down 9% at $14.66 in the final minutes before the close.
This is part of a weekly series about the car business. The auto industry plays an important role in the global economy, and record-high oil prices and a global slowdown have contributed to a crisis in the sector. This column will highlight some of the interesting stories that emerge as that crisis plays out.
And I thought things looked bad last week (Car Biz: Dark days in Detroit and beyond). The skies do indeed look dark in Detroit and the auto industry as a whole. But now instead of weak sales and slow growth, we are looking at plummeting sales and the very real possibility of bankruptcy and further consolidation throughout the industry.
Yesterday, as Zac Bissonnette noted, General Motors (NYSE: GM) dropped like a stone to a 58-year low. This earlier low point came before the Korean War, when gas cost less than 30 cents a gallon. Looking back, of course, we can see that GM had some great years ahead of it. If only the future looked so bright now.
Today, an S&P analyst quoted on Bloomberg said that the Big Three could face bankruptcy as macroeconomic factors "overwhelm them." This follows yesterday's comment from S&P that debt from GM and Ford Motor Company (NYSE: F) may have to be downgraded again, even deeper into junk status.
GM has replied to S&P's comments, saying that while it does indeed face "unprecedented challenges," it does not consider bankruptcy an option at this time. But then again, what else are they going to say?
TheStreet.com's Jim Cramer says the safety theme will come back if only because these companies' earnings will be good in six months.
Editor's note: Jim Cramer will present his 2009 stock outlook for the first time at TheStreet.com Investment Conference on Saturday, Oct. 25. Click for details.
Now they come after the Procter & Gambles (NYSE: PG) (Cramer's Take) and the General Mills (NYSE: GIS) (Cramer's Take) and the like, betting that the action will be better in the cyclicals with all of this money being printed worldwide.
Commodities are also coming back because of reflation. And we have to feel that many of the infra and ag names are finally sold out by the hedge fund redemptions.
Here I am speaking of a Freeport McMoRan (NYSE: FCX) (Cramer's Take), with its good yield and a belief that the hedge funds are at last done.
I don't buy it. I like a balanced portfolio, but I want to buy the GIS/PG all the way down because we are going into a recession, not going out of one. These companies pay dividends, raise dividends and have great commodity tailwinds.
U.S. stock futures were significantly lower Friday morning, a day after the Dow industrials had already plunged 678 points. The Dow dropped 21% in the past 10 days. U.S. stock markets are looking to join the plunge in global markets as Japan's Nikkei 225 fell 9.6%, Hong Kong Hang Seng dropped 7%, London's FTSE 100 declined 5.5% and the German DAX 30 was down 8% to name but a few that have managed to remain open. Some global markets actually had to close today, prompting the name "Black Friday."
Wednesday's coordinated rate cut didn't seem to loosen frozen credit markets as investors seem to completely lose confidence in the world's financial system. Finance officials from the G7 are meeting in Washington Friday to address the financial meltdown. On the economic front, August trade data and September import prices will be released. Oil prices plummeted to a one-year low of $82 a barrel.
General Electric (NYSE: GE) -- meanwhile this morning, GE reported results that met the lowered expectations. GE's profit fell 22% to $4.3 billion, or 43 cents per share, compared with $5.56 billion, or 54 cents, a year earlier. GE's revenue climbed 11% to $47.23 billion. Analysts polled by Thomson Reuters forecast earnings of 45 cents a share on revenue of $47.34 billion. GE recently got a $3 billion infusion from Buffett's Berkshire and raised $12.2 billion through a stock offering. Shares of GE are down about 1% in pre-market trading.
Ford Motor Corporation (NYSE: F) will see its Volvo Car division shed 3,300 jobs as the American automaker continues dealing with a huge slowdown in sales in the U.S. as well as other global markets. The auto industry is not in a death spiral at the moment (although it's been described that way), but expect the largest restructuring of one of the largest industries ever in the last 50 years. Ford will help lead the way, unfortunately.
Volvo announced that 2,700 of the positions will be eliminated in its home country of Sweden while 700 additional positions will be cut globally. The company said in a statement this week that "to meet the rapidly deteriorating market situation in the global car industry, the management team at Volvo Car Corporation has decided to initiate further structural changes in all parts of the business." That is light language for "the sky is falling."
The Swedish company will also get rid of contracts with 700 consultants. As it makes these cuts, they can't be the last, I'd expect more announcements in 2009 from Volvo as well. Consumers continue flocking to vehicles with smaller prices, smaller engines and larger MPG figures. Volvo, which makes great cars, just doesn't have the product mix to fit that description. That is the price for inflexibility not only in the U.S. market, but for all global consumer markets that are under extreme duress at the moment. Everyone hopes it gets better soon, but your guess is as good as mine.
The value of the shares in VW, Europe's largest car company, may have passed those of Toyota (NYSE: TM) for some of the wrong reasons, but it has become the world's most valuable car company nonetheless. VW is facing a possible buyout from its largest shareholder, Porsche, and that may be keeping its shares high.
However, the fact of the matter is that Toyota's share are down. And for good reason. According to Bloomberg, "Toyota has fallen 56 percent since its peak at 8,340 yen in February 2007. By contrast, Volkswagen rose to all-time high at 304 euros on Sept. 18."
The facts behind the reversal may be fairly simple and they may not go away soon. Toyota has substantial exposure to the moribund U.S. market where auto sales are dropping as much as 25% some months. While VW would like to be in North America with more market share, it may be lucky to be a bit player for now.
To demonstrate how tough the US car environment is, shares in Ford (NYSE:F) dropped to to $2.92 yesterday, a multi-decade low, and down from a 52-week high of $9.24.
It used to be that having a big market share in the U.S. was the most desirable thing in the world for an international car company. Having almost no share may be better now.
Douglas A. McIntyre is an editor at 247wallst.com.
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.
This market just won't quit and we even went through yesterday's lows on the DJIA to levels not seen since 2003. The world has determined that all of the efforts by the federal government aren't going to stop the bleeding enough or in time. The coordinated moves from the G8 nations aren't happening fast enough. This is called bear market selling. Cheap stocks get cheaper. Fundamentals don't matter. Technicals don't matter. Bernanke saying rates will be cut didn't matter. Sorry if it sounds depressing, but that is the climate.
Bank of America (NYSE: BAC) was down as it had trouble selling its $10 billion stock offering and as talk of counterparty demands over its Merrill Lynch ties have increased. Shares were down 23% at $24.77 in the final minutes before the close.
Morgan Stanley (NYSE: MS) was the subject of rumors again today with today's rumors being that the Mitsubishi UFJ investment was not going to close. Both sides did refute this, but the damage was done. Shares were down 23% at $18.00 in the final minutes before the close.
Ford Motor Co. (NYSE: F) saw a massive hit on ongoing share sales and on fears that it cannot borrow for short-term operations. Shares were down 19% at $2.98 in the final minutes before the close.
Advanced Micro Devices (NYSE: AMD) was one of the few real winners today after it announced it was selling its fab-operations to Abu Dhabi in an effort to streamline operations and cut costs. Shares were up almost 11% at $4.68 in the final trading minutes.
First Solar Inc. (NASDAQ: FSLR) is a reminder of how dangerous some high-flyers can be. It was downgraded by Goldman Sachs from "Buy" to "Sell" over lower average selling prices and over fears of a supply glut. Shares were down over 19% at $128.28 in the minutes before the close.
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/
TheStreet.com's Jim Cramer says the end-of-day bounce was just shorts afraid of a worldwide rate cut.
The shorts must have just gone on "ease watch." You can tell what that is. Some devastating news will come out, say, about once-proud Royal Bank of Scotland (NYSE: RBS) (Cramer's Take), some ratings downgrade, and boom, Britain is hit for a full percentage point decline. Then, as if by magic, it rallies almost back to unchanged as the shorts don't want to be hung before worldwide rate cuts.
I always thought this behavior was curious because I don't know of a short-seller who thinks that intervention even matters, or says it doesn't matter, for that matter!
In fact, though I think it can matter not so much to our country, it does matter to those countries in Europe that really would be doing well if money weren't so tight. Our markets lost a ready source of cash and business when Europe went away, particularly upon the disappearance of China from the world's economies.
Now, of all of the new measures I like hearing, the commercial paper intervention is intriguing as the government substitutes itself for buyers for this important funding. But again, I come back to the notion that we can't really be two sides of everything, can we?
Today was a great day in anticipation of the bailout, up until the point that traders sold the news. There is still a fear of holding anything into the weekend where bad news comes in the form of takeunder mergers on Monday. Today's jobless rate was 6.1% and the non-farm payrolls posted 9 consecutive declines.
Here are today's unofficial closing bell levels: DJIA 10,325.70 (-157.15; -1.50%) NASDAQ 1,947.39 (-29.33; -1.48%) S&P500 1,099.24 (-15.04; -1.35%) 10YR T-Note 3.644% (-0.002%) 52-Week Lows Top Analyst Downgrades
The big news of the day was rather complicated. Wells Fargo (NYSE: WFC) has decided to step in and merge with Wachovia Corp. (NYSE: WB) in an all stock transaction for the entire company. Wachovia closed up nearly 60% at $6.21 on over 250 million shares.
Citigroup Inc. (NYSE: C) bit the dirt today. It is the potential loser in the Wells Fargo-Wachovia deal and it paid the big price today. Citigroup fell more than 18% to $18.35 on the news and it traded nearly 300 million shares.
General Growth Properties Inc. (NYSE: GGP) got a a lift this morning on what many would otherwise consider bad news. The REIT has replaced its chief financial officer and suspended its dividend. Shares were up 27% at $9.70 right at the close today an more than 16 million shares.
Ford Motor Company (NYSE: F) fell almost 5% to $4.14 after it announced plans to sell up to $500 million worth of stock to buy back debt from its credit arm to help shore up its bottom line.
U.S. stock futures are higher, indicating stocks will likely continue their wild ride today, but perhaps end the week on a positive note. All this as Wachovia found another buyer, and ahead of the vote in the House on the bailout plan and payroll data. Economists expect payrolls to have dropped 110,000 in September, while unemployment rate should stay at 6.1%. September non-manufacturing ISM will also be released today.
Wachovia Corp. (NYSE: WB) dumped Citigroup (NYSE: C) and the deal arranged by the FDIC, instead announcing it signed a definitive agreement for a merger with Wells Fargo & Company (NYSE: WFC) that includes all of Wachovia's banking operations. WB shares are jumping 66% in pre-market trading, WFC up 2.4%, C down 6.6%.
UBS (NYSE: UBS) - fitting that on a day when payrolls are expected to show such a big drop UBS said it is cutting another 2,000 jobs at its troubled investment bank and closing most of its commodities business.
Yahoo! Inc. (NASDAQ: YHOO), however, said Thursday it isn't considering job cuts. But the comany continues to struggle in the current environment, looking for ways to further cuts costs and restructure operations. So job cuts may be on the agenda after all. YHOO stock set a new 52-week low of $15.54 Thursday, but this morning is up 2.7% in pre-market trade.
Alan Mulally, the CEO of Ford Motor Company (NYSE: F), voiced an unequivocally gloomy opinion about the future of the auto industry at the Paris Auto Show. After reporting a 34% plunge in auto sales for the month of August, Mulally warned reporters that "2009 is not going to be better than 2010. We won't see a recovery until 2010." He added, "The [economic] downturn is longer and deeper than we foresaw a year ago."
The auto exec added that it now expects the Russian market to stagnate next year; previously, Russia was the fastest-growing European market for Ford. Mulally sighed, "The problems of subprime and credit crunch are now all over the world." However, he clarified that the automaker's European production plants have the "flexibility" to withstand the expected downturn, and Ford generally has "the liquidity to deal with it."
As proof of that sufficient liquidity, Ford on Wednesday repaid $1.5 billion in debt as part of a routine transaction. Morgan Keegan analyst Pete Hastings told the Detroit Free Press, "It means they paid with cash," rather than drawing on a credit line. Hastings noted, "In a normal credit market, this wouldn't even merit a mention. But it isn't, so we're trying to interpret every little move."
Despite Ford's apparently stable cash position, investors today seem to be erring on the side of caution. The stock is down about 4% this afternoon to trade at $4.37. Today's plunge extends the equity's slump beneath staunch resistance from its 10-week and 20-week moving averages.
This is part of a weekly series about the car business. The auto industry plays an important role in the global economy, and record-high oil prices and a global slowdown have contributed to a crisis in the sector. This column will highlight some of the interesting stories that emerge as that crisis plays out.
U.S. stock futures were significantly lower Friday morning, a day after the Dow industrials had already plunged 678 points. The Dow dropped 21% in the past 10 days. U.S. stock markets are looking to join the plunge in global markets as Japan's Nikkei 225 fell 9.6%, Hong Kong Hang Seng dropped 7%, London's FTSE 100 declined 5.5% and the German DAX 30 was down 8% to name but a few that have managed to remain open. Some global markets actually had to close today, prompting the name "Black Friday."
U.S. stock futures turned higher Wednesday after the Federal Reserve, in a coordinated move with other central banks, 
Alan Mulally, the CEO of 
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