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| Weekly Wrap Up |
As was to be expected of the economy, the end of day markets closed on another wild week. On Friday, the Dow Jones Industrial Average closed upwards but ended the week at a decline compared to the previous week. Broader market indices also followed suit as the S&P, NYSE and Nasdaq closed upwards on Friday, but generally downwards from the previous week’s close. The Dow Jones Industrial Average closed at 8,046.42 while the S&P closed at 800.03 and the Nasdaq at 1,384.35. The general markets all saw a decline on Monday, Wednesday and Thursday but saw a slight rise on Tuesday and then a larger gain on Friday. These general declines were a product of weak housing reports and a 1% decline in the consumer price index in October. The Federal Reserve also released lower expectation projections on the immediate future of the US economy. Notable companies that made headlines last week included Citigroup (C: Charts, News, Offers) and how they announced they were laying off another 52,000 employees bringing the company’s total layoffs to 75,000. Hewlett-Packard (HPQ: Charts, News, Offers) also made headlines on Monday as they released their earnings report but maintained their outlook. Rival company Dell (DELL: Charts, News, Offers) did not follow suit however and ended up posting a 5 percent drop in net income with a 3 percent decline in revenue. Among some of the better economic news though, Heinz (HNZ: Charts, News, Offers) reported a rise in their 3Q profit and both Lowe’s (LOW: Charts, News, Offers) and Home Depot (HD: Charts, News, Offers) reported better than expected earnings. Additionally, the price for a barrel of oil fell below $50 as the US dollar grew stronger against foreign currencies. Gold also saw a spike in prices and closed out the week above $800. More Market News
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| Economic News |
A Democratic Congress, unwilling or unable to approve a $25 billion bailout for Detroit's Big Three, appears ready to punt the automakers' fate to a lame-duck Republican president. Caught in the middle of a who-blinks-first standoff are legions of manufacturing firms and auto dealers -- and millions of Americans' jobs -- after Senate Democrats canceled a showdown vote that had been expected Thursday. President George W. Bush has "no appetite" to act on his own. U.S. auto companies employ nearly a quarter-million workers, and more than 730,000 other people have jobs producing the materials and parts that go into cars. About 1 million on top of that work in dealerships nationwide. If just one of the auto giants were to go belly up, some estimates put U.S. job losses next year as high as 2.5 million. (Source: MSNBC) Full Story
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The Federal Reserve on Wednesday sharply lowered its projections for economic activity this year and next, and signaled that additional interest rate reductions may be needed to help combat the worst financial crisis to jolt the country in more than a half-century. With the economy forecast to lose traction, or even jolt into reverse, unemployment will move higher, the Fed predicted. Facing the likelihood of "significant weakness" in the economy, some Fed officials suggested "additional policy easing could well be appropriate at future meetings," according to documents from the Fed's most recent closed-door deliberations on interest rate policy at the end of October. (Source: TheStreet) Full Story
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Homebuilders' confidence in a near-term housing recovery sank to a new all-time low this month, reflecting growing worries over the U.S. financial crisis, rising unemployment and weakening consumer confidence, an industry trade association said Tuesday. The National Association of Home Builders/Wells Fargo housing market index, started in January 1985, tumbled five points to nine in November. The index stood at 14 in October after slipping three points from September. Index readings higher than 50 indicate positive sentiment about the market. But the index has drifted below 50 since May 2006 and below 20 since April. "Today's report shows that we are in a crisis situation," NAHB Chairman Sandy Dunn said in a statement. "Tremendous economic uncertainties have driven consumers from the housing market, and it's going to take some major incentives to bring them back." (Source: BusinessWeek) Full Story
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| Business News |
Wal-Mart Stores Inc. (WMT: Charts, News, Offers), the world's largest retailer, unexpectedly announced Friday that its chief executive will retire in February and be replaced by the head of its international division. The surprise change in leadership right before the crucial holiday season comes as Wal-Mart has roared back to success as people looking for bargains shop more at discounters. Still, the company faces hurdles ahead amid slowing growth in the U.S., and analysts say the decision to tap an international executive serves as a testament that the company sees its future growth oversees. Bentonville, Ark.-based Wal-Mart said Mike Duke, 58, vice chairman of its international division, will take the reins from Lee Scott, 59, effective Feb. 1. Duke also becomes a member of the board of directors immediately. (Source: Yahoo! Finance) Full Story
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The Bank of New York Mellon Corp. (BK: Charts, News, Offers) and Washington Mutual (WM: Charts, News, Offers) on Friday became the latest in a string of banks to announce layoffs. BNY Mellon said it will cut its worldwide work force by 4 percent, or about 1,800 jobs, blaming the weak global economy. "It has become clear that we need to take additional steps beyond our merger synergies to reduce expenses, given the current weakness in the global economy," Chairman and Chief Executive Robert P. Kelly said Thursday. Washington Mutual, now owned by JPMorgan Chase (JPM: Charts, News, Offers), planned to eliminate about 1,600 Bay Area jobs due to the closures of one operations center in Pleasanton, Calif., and another in San Francisco, according to The Associated Press. Meanwhile, Boeing Co. (BA: Charts, News, Offers) says it will likely lay off more workers next year as it cuts costs in a slowing economy. (Source: MSNBC) Full Story
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Citigroup Inc. (C: Charts, News, Offers) said Wednesday it is acquiring the remaining $17.4 billion in assets held by structured investment vehicles (SIV) it already supports, as the bank moves to unwind the troubled funds.Citigroup will move the SIV assets to a portfolio of assets held for sale. The transfer allows the funds to fully repay maturing debt obligations. Citi is acquiring the assets at their current fair value, net of cash. The assets' value fell to $17.4 billion from $21.5 billion as of Sept. 30. The value fell $4.1 billion, with $3 billion tied to asset sales and maturities, and the remaining $1.1 billion due to market value declines. The transfer of assets out the SIVs is the latest step as Citigroup has been working to shut down the operations. (Source: CNN Money) Full Story
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| Technology Focus |
Shares of Dell (DELL: Charts, News, Offers) slipped Friday despite the company's announcement of better-than-expected third-quarter earnings late Thursday. Even as the Nasdaq crept up 0.5%, the PC maker's stock was recently down 46 cents, or 4.69%, to $9.35. Dell, like other tech companies, is wrestling with an increasingly treacherous spending climate, although the company sought to calm investors during a conference call to discuss its results. "We continue to make significant progress against our cost initiatives," said Brian Gladden, the Dell CFO, during the call late Thursday. "Our initiatives to improve competitiveness and reduce costs are bearing fruit." (Source: TheStreet) Full Story
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Microsoft Corp. (MSFT: Charts, News, Offers) is no longer interested in buying all of Yahoo Inc. (YHOO: Charts, News, Offers), CEO Steve Ballmer said Wednesday, though he told shareholders that the company would still be "very open" to a collaboration on Internet search. His comments sent Yahoo shares diving by 19 percent. "Let me be clear," Ballmer said at Microsoft's annual shareholder meeting. "We are done with all acquisition discussions with Yahoo." Yahoo spurned a $47.5 billion takeover offer from Microsoft in May, and later rejected Microsoft's bid to buy only its search engine. Ballmer has said repeatedly of late that the buyout remains off the table, though a search-related deal is possible. (Source: Yahoo! Finance) Full Story
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Watch your back, Monkey Boy. You may have messed with the wrong bunch of PC builders. A court filing unsealed Thursday as part of a class-action lawsuit against Microsoft (MSFT: Charts, News, Offers) revealed that Hewlett-Packard (HPQ: Charts, News, Offers) Chief Executive Mark Hurd e-mailed Microsoft Chief Executive Steve Ballmer to complain about HP's "call lines being overrun," with customers struggling to upgrade to Vista. "I'm sure you're aware of this," Hurd added. The full text of the e-mail has not yet been released, but Hurd's complaints to Ballmer are the latest signs of escalating tensions between HP and Microsoft caused by the launch of Windows Vista in 2007. (Source: Forbes.com) Full Story
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| Your Money |
The weak economy can be a buzz kill -- just ask one of the nation's most prominent coffee retailers. Starbucks Corp. (SBUX: Charts, News, Offers) last week reported a 97 percent drop in fourth-quarter profits, a decline blamed in part on fewer U.S. consumers getting their caffeine fix at the popular coffee-shop chain. If you're among the Americans cutting back on their coffee-shop java, chances are you've at least considered getting your caffeine fix at home instead ... and doing so, experts say, doesn't necessarily mean sacrificing your taste buds. (Source: ABC News) Full Story
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| Trivia Question |
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When were circuit breakers introduced?
(answer below) |
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| Market Overview |
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| DJIA |
8,046.42 |
-450.89 |
| S&P |
800.03 |
-73.26 |
| NYSE |
4,959.79 |
-492.84 |
| NASDAQ |
1,384.35 |
-132.50 |
| 10Yr |
3.167% |
-0.01 |
| Dollar |
88.415 |
+1.63 |
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| Last Week |
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| Nov 10-14 |
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| Trivia Answer |
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| The US markets introduced circuit breakers after the crash of Oct. 1987. The circuit breakers halt trading for 30 minutes when the Dow falls by 350 points or more, and for 1 hour when the Dow falls 550 points or more. These were came into use for the first time on Oct. 27, 1997 when the DJIA tumbled 554, the biggest points drop in history |
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