Taking Stock of Wall Street 2008-10-20

For the first time in recent weeks, the market rallied to the statements of a top official. Bernanke's suggestion for stimulus package to taxpayers was the shot in the arm it needed. The recent trend was to fall immediately after official statements. That was reversed today.

GLOBAL PICTURE

For the first time in many days, all global markets made a concerted rally, be it Asia or Europe.

Global governments continued their efforts to infuse liquidity in their markets.

South Korea will begin to guarantee some of the foreign debt held by its banks

Netherlands is investing $13 bln in ING bank.

Sweden announced its bailout plan worth $271 bln.

US GOVERNMENTAL ACTIONS

President Bush said will host an international summit next month possibly in New York.

The White House said it is open to a second stimulus package for taxpayers.

Treasury Secretary Paulson encouraged all eligible banks to apply by the deadline on November 14 for governmental assistance. It will be Tier 1 equity participation by the government.

Federal prosecutors also have joined the NY attorney general's investigation

into whether the unregulated credit default swap (CDS) market was used to manipulate the stock market.

US ECONOMIC DATA

U.S. Leading Indicators for September - U.S. leading indicators increased by 0.3% compared to August decline of -0.9% . Economists' forecasts were for a decline of -0.1

The Dollar Index is up 1.0%, against a basket of six foreign currencies.

Crude oil was up by $1.44 (1.94%) to $75.69

Gold rose by $2.30 (0.29%) to $804.50.

CBOE Volatility (VIX) 52.97 down by 17.36 from Friday.

STOCK MARKET INDICES

Dow went UP by 411.46 (4.65%) to 9,265.43

S&P 500 UP by 44.85 (4.77%) to 985.40

Nasdaq UP by 58.74 (3.43%) to 1,770.03

NYSE

Daily Volume: 1.22 bln

A/D Ratio: 2697 stocks advanced against 530 declined

52-week Hi/Lo: 18 stocks climbed to new Highs while 49 went down to new Lows

Nasdaq

Daily Volume: 2.03 bln

A/D Ratio: 1972 stocks advanced against 947 declined

52-week Hi/Lo: 2156 stocks climbed to new Highs while 757 went down to new Lows

MARKET NEWS

Market's rally today was supported by all its ten sectors led by energy stocks. The worst performers today were the financial stocks.

COMPANY NEWS

Yahoo! (YHOO) is now a far cry from the heady days of Microsoft's (MSFT) bid. Now we hear that another 1000 jobs are to be cut as part of a greater austerity exercise.

Circuit City (CC) may close 150 stores to ward off bankruptcy.

M&A NEWS

EDF Exelon (EXC) has made a bid for NRG Energy (NRG) for a 30% premium at $26.43 per share.

Toshiba (TOSBF) will buy 65% of SanDisk's (SNDK) semiconductor production.

Carlos Slim may increase his 6% stake in New York Times (NYT).

ING (ING) is selling its Taiwan Life insurance division to Fubon Financial for $600 mln.

COMPANY RESULTS

* Companies that exceeded market's expectations on quarterly earnings:

American Express (AXP), Halliburton (HAL), Hasbro (HAS), Eaton (ETN) and Ericsson (ERIC).

* Those that missed the forecasts:

Texas Instruments (TXN), SanDisk (SNDK), Novartis AG (NVS), Mattel (MAT) and Sun Microsystems (JAVA).

ANALYSTS' RATINGS

* Following company stocks were upgraded:

Amcol International Corp (ACO), Anadarko Petro Corp (APC), Apache Inc (APA), Archer-Daniels Midland (ADM),

BP ADR (BP), Cablevision Systems Corp (CVC), Cabot Oil & Gas Corp (COG), Chemed Corp (CHE),

Chevron Corp (CVX), Cisco Systems Inc (CSCO), Comstock Resources Inc (CRK), ConocoPhillips (COP),

Devon Energy Corp (DVN), EOG Resources Inc (EOG), Exxon Mobil Corp (XOM), Freightcar America Inc (RAIL),

Frontier Oil Inc (FTO), Gildan Activewear Inc (GIL), Hess Corp (HES), IDEX Corp (IEX), Kraft Foods Inc (KFT),

Kroger Co (KRLM) Ericsson Telephone ADR (ERIC), Mariner Energy Inc (ME), MDC Holdings Inc (MDC),

Murphy Oil Corp (MUR), Noble Energy Inc (NBL), Open Text Corp (OTEX), Pfizer Inc (PFE),

Pioneer Natural Resources Co (PXD), Plum Creek Timber Co Inc (PCL), PMC-Sierra Inc (PMCS),

Quidel Corp (QDEL), Replidyne Inc (RDYN), Republic Bancorp Inc. KY (RBCAA), Ritchie Brothers Inc (RBA),

Royal Dutch Shell (RDS.A), Scientific Games Corp (SGMS), Sunoco Inc (SUN), Symantec Corp (SYMC),

TAM SA (TAM), Tesoro Corp (TSO), Valero Energy Corp (VLO), Ventas Inc (VTR) and XTO Energy Inc (XTO).

* Downgraded stocks are:

Adobe Systems Inc (ADBE), Bill Barrett Corp (BBG), Caterpillar Inc (CAT), Central Garden & Pet Co (CENT),

Delta Petroleum Corp (DPTR), Forest Oil Corp (FST), Global Industries Ltd (GLBL), Helen of Troy Ltd (HELE),

Hess Corp (HES), Libbey Inc (LBY), Marathon Oil Corp (MRO), Monster Worldwide Inc (MNST),

Pioneer Natural Resources Co (PXD), POZEN Inc (POZN), Quicksilver Resources Inc (KWK), Sasol Level 2ADR (SSL),

Sonoco Products Co (SON), Spherion Corp (SFN), Tempur-Pedic International (TPX), Terex Corp (TEX),

Ultra Petroleum Corp (UPL) and Viacom Inc (VIA).

FED TALK

Federal Reserve Chairman Ben Bernanke:

- further interest rate cuts are possible.

-country's economic weakness could last for some time

-another round of government stimulus is appropriate but should be well targeted and well timed.

Atlanta Federal Reserve President Dennis Lockhart:

-weakness in the U.S. economy maycontinue well into 2009.

-inflation pressures have dissipated. (He does not agree that massive liquidity injections by the Fed

and the resultant increase in money supply will not flare up prices ).

-credit markets must thaw first for a recovery to take place

-he is sure Federal Reserve's actions will stem the crisis and credit markets will gradually improve.

- slower global economic growth will affect impact U.S. growth, especially exports until 2009.

Federal Reserve Board Governor Randall Kroszner:

- banking institutions need to be prepared for regulatory changes.

-banks should develop risk management framework for better control of debts

DAILY SCORECARD

Today definitely was the day of the bull. But we may have to wait till the weekend to see whether the weekly slide too has abated.