Taking Stock of Wall Street 2008-10-06

Today's was a global sell off that started early in the east and then spread to the west with the sun.

Tradings in Russian and Brazilian stock exchanges were temporarily halted.

Many experts have started to worry about China's stability with the target countries for her exports in or soon to be in a recession. This, despite Chinese Premier Wen Jiabao's repeated assurances that China is safe whatever happens to her trading partners.

With strong opposition from Germany for a combined EU bailout, individual members have started rescuing financial institutions in their own countries.

May be UK should be happy that it was thrown out of the ERM when George Soros brought down the sterling pounds. Now, she can take monetary actions independently without waiting for Germany's approbations.

But Germany's high-handed treatment of fellow members may soon make pan-European unity a distant dream. Unity when it suits them is just opportunism.

France has requested an emergency G8 nations to coordinate remedial actions of major central banks.

Back home, close on the heels of the bailout bill, the US Fed made available another tranche of $900 bln to depository institutions to ease liquidity problems further.

Oil dipped by -$6.07 (-6.47%) to $87.81.
Gold advanced by $33 (3.96%) to $866.20.

Despite all this turmoil, US dollar is having a heyday: Again rose by 1.5% against a basket of major world currencies.

Dow had descended to previous lows of -800 points but sufficiently recovered to make up half of that by the session's end. It was a remarkable recovery as foreign market's fell by greater percentages.

CBOE Volatility Index (VIX) soared by another 10 points to 56.0.

Market indices:

Dow fell DOWN by -369.88 (-3.58%) to 9955.50
Nasdaq DOWN by -84.43 (-4.34%) to 1862.96
S&P 500 DOWN by -42.34 (-4.01%) to 1056.89

NYSE

Daily Volume: 1.87 bln
A/D Ratio: 243 stocks advanced against 3038 declined
52-week Hi/Lo: 1 stock topped new Highs while 1675 fell to new Lows

Nasdaq

Daily Volume: 3.47 bln
A/D Ratio: 472 stocks advanced against 2583 declined
52-week Hi/Lo: 6 stocks scaled new Highs while 1127 dipped to new Lows

For the first time in four years, Dow broke down through the 10,000 mark.

Online auctioneer EBay (EBAY) is laying off 1,000 workers, roughly 10% of its staff. It also issued lowered guidance of earnings for the next quarter. That brought down its stock prices.

As for the triangular Citibank-Wachovia-Wells Fargo imbroglio, FDIC is trying its best to avoid protracted legal battles by dividing Wachovia between the two biggies. It is reported that Wachovia's CEO had submitted a sworn affidavit before the New York trial court that Wachovia did consult with FDIC before switching from Citi to Wells Fargo.

Fitch Ratings downgraded the credit default ratings of National City (NCC) and Hartford Financial (HIG).

Bank of America (BAC) is allocating up to $8 bln to settle 400,000 claims arising out of Countrywide Financial's mortgages.

M&A News:

Spain's BNP Paribas (BNPQY) is buying the stricken Fortis bank for $19.8 bln.

Eli Lilly's (LLY) buyout of ImClone (IMCL) is approved for $6.1 bln.

Scotiabank (BNS) is acquiring a 37.6% stake in CI Financial(Canada) for $2.3 bln.

German insurer Allianz (AZ) is buying a 20% stake in Hartford for $2.5 bln.

First Choice Holidays is acquiring the balance 50% stake of Royal Caribbean (RCL) in Island Cruises

EBay is buying Bill Me Later for $945 mln and two Danish classified advertising sites for $390 mln.

ING (ING) is bidding for a higher stake in China's Bank of Beijing.

Company Results:

All companies that published their results today had lower than expected earnings -
SAP (SAP), Netflix (NFLX), Bank of America (BAC), Ebay (EBAY), and Hartford Financial (HIG).

Analysts' Ratings:

The following company stocks received upgrades:

Amylin Pharmaceuticals (AML), Jabil Circuit Inc (JBL), Landstar System inc (LSTR), Marten Transport Ltd (MRTN),
Novo-Nordisk A/S (NVO), Supervalu Inc (SVU) and Wells Fargo & Co (WFC).

The stocks downgraded include:

Adobe Systems (ADBE), Arcelor Mittal SA (MT), Benchmark Electronics Inc (BHE), Blackbaud Inc (BLKB), Celestica Inc (CLS),
Coca-Cola Co (KO), Deltek Inc (PROJ), Ecolab Inc (ECL), Emulex Corp (ELX), Fairchild Semiconductor Inl (FCS),
Heidrick & Struggles Intl (HSII), Illinois Tool Works Inc (ITW), Intersil Inc (ISIL), Omniture Inc (OMTR), RF Microdevices Inc (RFMD),
TrueBlue Inc (TBI), VMware Inc (VMW), Varian Medical Systems (VAR) and Polycom Inc (PLCM).

Interbank Rates:
Overnight loan rate again rose above the fed funds rate of 2% to 2.37%
In contrast, the three-month Libor rate fell to 4.29%.