Taking Stock of Wall Street 2008-10-23

The volatile market had a roller-coaster ride today before it settled on positive territory, gyrating up and down. Still, the Nasdaq lagged by a few points.

GLOBAL PICTURE

Sweden cut its benchmark interest rate to 3.75%.

Asian exchanges fell while European exchanges managed to scramble to positive territory.

Bank of England now expects the present inflation rate of 5% to decline to 2% in the coming twelve months. As for UK mortgage situation, £3.6 bln more loans were approved. Mortgage applications also saw a decrease in number.

The Netherlands is merging the troubled Fortis Bank Nederland with ABN AMRO.

45 Asian and European leaders are meeting in Beijing, China to discuss the global financial crisis.meet tomorrow to discuss possible joint efforts to fight the global financial crisis.

Germany says their economy is stagnating after contracting in the first half of the year. They don't expect any rebound before 2009.

European Union (EU) reports that the current account deficit in the 15-member Eurozone has ballooned to 8 bln euros, four times the analysts' forecast 2 bln euros.

Taiwan's regulators have forbidden its financial institutions from buying debt instruments issued by US institutions.

Hong Kong's dollar is strengthening so much that their worried central bank is buying US dollars to counter it..

US ECONOMIC DATA

Weekly Jobless Claims Data for the week ended October 18 - increased by 15,000 to 478,000 more than consensus of 463,000. Most of the claims were from hurricane regions.

The 4-week moving average showed a drop of 4,500 to 480,250 from the previous figure of 484,750. Continuing claims are unchanged at 3.72 mln.

Natural Gas Inventory Data for the week ended October 17 - increased by 70 bcf to 3,347 bcf.

US Foreclosure Data for September - Foreclosure notifications declined 12% from that of August. The number of foreclosures were 81,312.

Money Supply for September - (August figure s in bracket)

M1 = 1453.8 (1394.0), M2 = 7769.3 (7669.9)

Crude oil UP by $1.09 (1.60%) to $69.32

Gold DOWN by -$20.50 (-2.79%) to $714.70.

CBOE Volatility (VIX) was 67.80,back DOWN by 1.85 from Wednesday.

US Dollar Index retreated marginally by -0.46 (0.56%) to 85.69.

STOCK MARKET INDICES

Dow was UP by 172.04 (2.02%) to 8,691.25

S&P 500 UP by 11.13 (1.26%) to 908.11

Nasdaq DOWN by -11.84 (-0.73%) to 1,603.91

NYSE

Daily Volume: 1.67 bln

A/D Ratio: 1195 stocks advanced against 1991 declined

52-week Hi/Lo: 14 stocks climbed to new Highs while 701 went down to new Lows

Nasdaq

Daily Volume: 3.13 bln

A/D Ratio: 832 stocks advanced against 2026 declined

52-week Hi/Lo: 0 stock climbed to new Highs while 556 went down to new Lows

MARKET NEWS

Sony's (SNE) outlook guidance was disappointing: full year profit down by 38%, fiscal year profit down by 57%.

Raytheon (RTN) will be repurchasing $2 bln worth of their shares.

Goldman Sachs (GS) is reportedly bidding for Lehman's private-equity portfolio. Separately, it is reported that they may be cutting 10% of the staff or about 3,250 positions.

ArcelorMittal (MT) announced it may have second thoughts on its $35bln as demand for steel slumped.

M&A NEWS

BHP's (BHP) bid for Rio Tinto (RTP) may face anti-trust scrutiny by European Union regulators.

Russian antitrust regulators disallowed Google's (GOOG) $140 mln bid on ZAO Begun.

Nestle rejected all rumors of a possible bid for Hershey's (HSY).

COMPANY RESULTS

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

Amazon.com (AMZN)Microchip Technology (MCHP), Riverbed Technology (RVBD), Varian Medical Systems (VAR),

Compuware (CPWR), Interactive Brokers (IBKR), Synaptics (SYNA), Western Digital (WDC), AFLAC (AFL), DeVry(DV),

Burlington Northern Santa Fe (BNI), Chubb (CB), Microsoft (MSFT), Juniper Networks (JNPR), Celestica (CLS),

JetBlue Airways (JBLU), US Airways (LCC), Union Pacific (UNP), Level 3 Communications (LVLT) ProLogis (PLD), Zimmer (ZMH), Bristol-Myers (BMY) AM Black & Decker (BDK) R.H. Donnelley (RHD), Celgene (CELG), UPS (UPS), Goodrich (GR),

Raytheon (RTN),Xerox (XRX), Altria (MO), Dow Chemical (DOW), EnCana (ECA)Eli Lilly (LLY), Range Resources (RRC),

Nestle (NSRGY.PK), Potash (POT), 1-800 FLOWERS.COM (FLWS), Starwood Hotels (HOT) and RadioShack (RSH)

* Companies that confirmed market expectations:

Diamond Offshore Drilling (DO), Janus Capital Group (JNS), Coca-Cola Enterprises (CCE) and Thermo Fisher (TMO)

* Those that missed the forecasts:

New York Times (NYT), NII (NIHD), Bunge (BG), Avnet (AVT), Southern Company (SO), Xcel Energy (XEL),

YRC Worldwide (YRCW)Ingram Micro (IM)Cheesecake Factory (CAKE), Synovus Financial (SNV), AU Optronics (AUO),

Elan (ELN), Credit Suisse (CS), Petro-Canada (PCZ), Dr. Reddy's (RDY) and SunTrust Banks (STI).

ANALYSTS' RATINGS

• Stocks upgraded:

GlaxoSmithKline (GSK) , Amazon.com Inc (AMZN),Archer-Daniels Midland Co (ADM), Big 5 Sporting Goods Inc (BGFV), BlackRock Inc (BLK),

Bunge Ltd (BG), Emulex Corp (ELX), GSI Commerce Inc (GSIC), Intercontinental Hotels Group ADR (IHG),

Kellog Co (K), Kimberly-Clark Corp (KMB), MKS Instruments Inc (MKSI), Norfolk Southern Corp (NSC),

Northern Trust Corp (NTRS), Overstock.com Inc (OSTK), Pentair Inc (PNR), The Pep Boys- Manny, Moe & Jack (PBY),

Salesforce.com Inc (CRM), Silgan Holdings Inc (SLGN), VASCO Data Security International Inc (VDSI),

Whole Foods Market Inc (WFMI) and Wyeth (WYE).

• Downgraded stocks are:

AEGON NV ADR (AEG), Allegheny Technologies Inc (ATI), Anadigics Inc (ANAD), B&G Foods Inc (BGS),

Baker Hughes Inc (BHI), Colonial BancGroup Inc (CNB), BJ Services Inc (BJS), Cadence Design Systems Inc (CDNS),

Con-way Inc (CNW), Covance Inc (CVD), CyberOptics Corp (CYBE), Dover Downs Gaming & Entertainments Inc (DDE),

Ensco International Inc (ESV), Foundation Coal Holdings Inc (FCL), Lam Research Corp (LRCX),

Lennox International Inc (LII), Natl Oilwell Varco Inc (NOV), Noble Corp (NE), Phoenix Technologies Ltd (PTEC),

Providence Service Corp (PRSC), Scotiabank (BNS), Sigma Designs Inc (SIGM),United Community Banks Inc (UCBI) and Weatherford International Ltd (WFT).

HOW MUCH TRUST BANKS HAVE IN EACH OTHER'S CREDIT WORTHINESS?

Overnight lending rate increased from 1.12% to 1.21%.

The 3-month Libor is unchanged at 3.543%.

POINTERS TO THE FUTURE

New York Fed expects up to 78,000 job losses on Wall Street. Salaries also may see a cut up to 25%.

But, that is nothing compared to the job and income losses they indirectly created.

FDIC boss Sheila Bair wants the government to help banks further troubled loans into affordable mortgages by shouldering the losses on these new ones.

How about new job creation that will help delinquents to pay up the whole thing without bothering the government?

The dollar is riding two-year high. Foreigners are buying dollar as a safe-haven!!!

As a patriot, that boosts my ego.

But, when I realize that recent rise in dollar was due to pure reciprocal technicals and not due to fundamentals, I cringe at the prospect of their dumping the greenback back on me later.

Oil was in the 150s in July. Now, it is in the 60s, almost down by 50%. OPEC is convening an emergency meet tomorrow.

Saudi Arabia is likely to receive some flak for not agreeing to price cuts earlier. Experts expect it to go with the demand of fellow members of the OPEC this time. Or, the only way is to agree tomorrow and then renege on that commitment later.

Goldman Sachs is a beneficiary of the recent bailout using taxpayers' money. But then they issued another SELL advice on Citi shares.

I am not a Citi investor but I am a taxpayer. So I don't want a run on Citibank as the government has sunk more billions into Citibank. Probably after taking the taxpayers' money, GS is back to the old game of killing competitors. But, that they should do only after both banks return taxpayers' money.

You may remember, the first rumblings of the present crisis started in the last quarter of 2007, when all of Citi's competitors including the now dead Bear Sterns and Lehman tried to kill Citi by issuing SELL advisories on Citi's shares repeatedly. But Citi survived by selling off its foreign assets, which it had in plenty. And we saw Bear Sterns and Lehman dying.

So, I am not surprised that even now these games are being played. But, all of them should remember that they are all NOW responsible to taxpayers and should do nothing that will cause harm to taxpayers.

How come Goldman Sachs forgot so soon that government has sunk 25 bln taxpayers dollars into Citi? Will GS undertake to return the Citi depositors and taxpayers if Citi goes down under?