Stocks got out of the gate in the negative territory led by major tech downgrades. Shares of both Intel (INTC: Charts, News, Offers) and Advanced Micro Devices (AMD: Charts, News, Offers) fell in respond to the analysts downgrade citing weakening outlook for corporate and consumer IT spending globally. Lower productivity of U.S. nonfarm businesses also weighed down on the stock market. Stocks lingered in the negative for most of the day, but began to stage a come back around 2pm, when investors reacted positively to the news that the Federal Reserve is taking steps to help the worsening economy. The Fed issued a statement that it will use money from its investment in mortgage securities to buy long-term government debt. This could send mortgage and corporate debt rates slightly lower and help the stock market.
Overall, the Dow fell 54.50 points to 10,644.25, the S&P 500 was down 6.73 points to 1,121.06, and the NASDAQ dropped 28.52 points to 2,277.17 — effectively wiped out the meager gains made on Monday.
Bonds rose as the 10-year Treasury yield fell to 2.781%, down 0.41 points from yesterday — but higher than the lowest point of the day. Oil prices also settled lower to the $80.25 per barrel, down by $1.23, after the Fed statement.
Word on the Street
- Apparently there’s another secret about HP (HPQ: Charts, News, Offers). There is a rumor flying around saying that HP is not doing as well as it appears to be and that it would be better off broken up into 3 smaller companies. But the safest bet right now is just to wait and see how this will unfold over the next couple of months. It’s hard to believe that HP will not be able to survive without Hurd.
- Three United Airlines flight sat on the tarmac for more than the 3-hour limit in June, which is a drastic improvement compared to the nearly 300 a year ago. It seems that the airline dealt with the delay the best it could, and there is not decision from the Transportation Department yet, whether a fine will be imposed. The maximum fine under the new rule is $27,500 per passenger. Yikes.
- Toyota Motor (TM: Charts, News, Offers) got a fresh dose of good news today when the National Highway Traffic Safety Administration said in a report that it saw no evidence of electronics-related causes for the accidents in reviewing the vehicle data. In fact, the study revealed that brakes weren’t even applied by drivers in at least 35 of the 58 crashes.
- US bank regulators move to replace private credit ratings issue by companies such as Moody’s (MCO: Charts, News, Offers) and Standard & Poor’s, citing their role in the 2007-2009 financial crisis.
- Morgan Stanley Fined $800,000 for Failure to Disclose Conflicts (MS: Charts, News, Offers)
Interesting Tidbits
- How much money do you need to feel rich? — Wealth is a subjective concept, but one thing is universal in most definitions: being able to live a comfortable life without having to work.
- The Social Security Catch-22 – As the recession forces more jobless Americans to file for Social Security benefits early, more will face the dreaded earnings test if they’re lucky enough to find another job. Be sure you understand the rule that can take away cash today but deliver beefed-up benefits tomorrow.
- What Happens When Your Bank is Seized by the FDIC? — This is a matter of concern because the recession saw quite a few bank closings, and there are still hundreds of banks still on the FDIC watch list for potential failures. As of the end of last month (July 30th: Charts, News, Offers) according to the FDIC, there have been 108 bank closings year to date.
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Stocks Recovered From A Bad Start After Fed Statement (HPQ, TM, MS, INTC, AMD)
By: InvestorGuide Staff, dated August 10th, 2010Stocks got out of the gate in the negative territory led by major tech downgrades. Shares of both Intel (INTC: Charts, News, Offers) and Advanced Micro Devices (AMD: Charts, News, Offers) fell in respond to the analysts downgrade citing weakening outlook for corporate and consumer IT spending globally. Lower productivity of U.S. nonfarm businesses also weighed down on the stock market. Stocks lingered in the negative for most of the day, but began to stage a come back around 2pm, when investors reacted positively to the news that the Federal Reserve is taking steps to help the worsening economy. The Fed issued a statement that it will use money from its investment in mortgage securities to buy long-term government debt. This could send mortgage and corporate debt rates slightly lower and help the stock market.
Overall, the Dow fell 54.50 points to 10,644.25, the S&P 500 was down 6.73 points to 1,121.06, and the NASDAQ dropped 28.52 points to 2,277.17 — effectively wiped out the meager gains made on Monday.
Bonds rose as the 10-year Treasury yield fell to 2.781%, down 0.41 points from yesterday — but higher than the lowest point of the day. Oil prices also settled lower to the $80.25 per barrel, down by $1.23, after the Fed statement.
Word on the Street
Interesting Tidbits
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