Independent, Fee-Only Financial Advisor

Independent, Fee-Only Financial Advisor

Thursday, January 31, 2008

down early, up late

The Dow Jones Industrial Average opened lower Thursday, amid worries about the solvency of bond insurers. But, reassuring comments from bond-insurance giant MBIA helped jumpstart the rally that left the Dow higher than where it started. "The market is fairly valued right now," said Jack Ablin, chief investment officer at Harris Private Bank. "If any company can make a profit this year, it's shares should do pretty well." DJIA +207.53 Nasdaq +40.86 S&P 500 +22.74

Wednesday, January 30, 2008

The Fed Threw a Party BUT...

The Fed came through today and lowered rates 1/2 a point. At first, the confetti was falling on Wall Street. Investors responded by sending the Dow up triple digits. The rally faded by the afternoon, though. Word came down about more concerns among the bond insurers. Oh, that credit market! By market close, we dipped into the red. DJIA -37.47 NASDAQ -9.06 S&P 500 -6.49

Tuesday, January 29, 2008

Will the Fed cut again?

Stocks made another gain Tuesday, as each index finished in the positive. Two consecutive days with gains really has me with a smile on my face. Investing pros are expecting a half percentage-point cut in the Fed's key rate target, to 3%, on Wednesday but could be disappointed if it is anything less. Late in the trading day, the House of Representatives passed a recently proposed stimulus package of tax rebates by a landslide vote of 385-35. But the bill faces an uncertain future in the Senate, where officials may change the package's details in ways that House members or President Bush find unacceptable. DJIA +96.41 Nasdaq +8.15 S&P 500 +8.33

Monday, January 28, 2008

Late buying causes gain

Financials led the way Monday, as stocks made a late rally. The Standard & Poor's 500 closed 1.8% higher, up 23.36 points at 1353.97, led by its financial components, which were up more than 3% as a group. Some investor's are guessing we have hit the bottom and see financials as a good buy right now. Despite the shopping spree in financial stocks, a weak earnings report from Dow component McDonald's dropped their shares 5.6%. "I think we're in a bear market," said strategist Douglas Peta, of New York investment-management firm J&W Seligman & Co. "But even in bear market, you can have rallies that are very quick and very sharp." DJIA +176.72 Nasdaq +23.71 S&P 500 +23.35

Friday, January 25, 2008

Late selloff

On Friday, the Dow Jones Industrial Average ended down 171.44 points, or 1.4%, at 12207.17 despite strong profit reports from components Microsoft, Caterpillar and Honeywell International. The late selloff off seemed to spur from many investors who feel that their is more bad signals from the U.S. economy to come. "The market is still in a very fragile state," said Peter Cardillo, chief market economist at Avalon Partners. "Everyone is trying to catch his breath. There's nervousness about where the economic data will point." DJIA -171.44 Nasdaq -34.72 S&P 500 -21.46

Wednesday, January 23, 2008

A breath of fresh air

Financial stocks rallied Wednesday afternoon, leaving indexes with a much needed positive finish. New York state regulators were meeting with Wall Street firms to discuss ways to stabilize the troubled bond-insurance industry. Some big name tecnology companies were not quite as lucky. Apple shares dropped 10.7% while Google, Research In Motion and each lost over 2%. Though Wednesday might not signal a turn around, it sure was a much needed bright spot. DJIA +298.98 Nasdaq +24.14 S&P 500 +28.10

Tuesday, January 22, 2008

Emergency cut

Stocks ended in the red Tuesday, but it could have been far worse as investors around the world sold off stocks in fear of a recession. Widening fears of a U.S. recession led to sharp declines in overseas markets prior to Tuesday's opening bell in New York. The Federal Reserve's decision to cut its key interest-rate target by three quarters of a percentage point slowly attracted buyers back throughout the day. Brokerage firms were boosted by the prospect of lower borrowing costs due to the Fed cut. Morgan Stanley, Merrill Lynch and Bear Stearns all rose more than 4%. Overall on Tuesday, 1,419 stocks were up and 1,783 were down at the New York Stock Exchange. DJIA -128.11 Nasdaq -47.75 S&P 500 -14.69

Friday, January 18, 2008

A much needed weekend

All three major indexes were off at least 4% this week, the worst loss in a year that had already been a bad one for investors. The S&P 500 fared the worst, off 5.4%, its worst weekly loss since July 2002. On a better note, IBM rallied 2.3% after forecasting strong earnings growth for 2008. General Electric rose 3.3% after posting strong fourth-quarter profits. Investors will have much to contemplate over the weekend and seem likely to continue betting aggressively in holiday-shortened trading next week. Have a good weekend DJIA -59.91 Nasdaq -6.88 S&P 500 -8.06

Thursday, January 17, 2008

More Gloom

I haven't seen the sun in a couple of days. It's dreary and gloomy in Mississippi. Wall Street is in the same mood. Numbers for housing starts were released, and they were not good. Merrill Lynch released dismal earnings today. The bond insurers are struggling. Bernanke is pushing Congress to follow his lead in addressing the downturn. The only bright news is GM... believe it or not. They seem to have turned the corner. Will wonders never cease? DJIA -306.95 NASDAQ -47.69 S&P 500 -39.93

Wednesday, January 16, 2008

Stocks seesaw

Wednesday consisted of a back-and-forth session in which investors digested mixed news about corporate profits, oil, and the economy. Crude-oil futures are down to $90.75 a barrel, after dropping $1.15 today. "Considering that oil was near $100 not too long ago, this is a big move," said trader Stephen Carl, of Williams Capital Group, a New York investment bank. "At the same time, we're seeing a mixed (stock) market because people aren't too sure what to expect from the economy." DJIA -34.95 Nasdaq -23.00 S&P 500 -7.75

Tuesday, January 15, 2008

A Grim Day

Citigroup reported a bleak picture, saying they will need another cash infusion to keep the doors open. No surprise there, but investors still punished the entire market. Citigroup is cutting its dividend, again no surprise. Beware of fat yields on financials. They will surely dry up, as cash needs increase. Markets took this round on the chin. Merrill Lynch and WaMu report on Thursday. Won't be pretty. DJIA -277.04 NASDAQ -60.71 S&P 500 -35.30

Monday, January 14, 2008

Another rate cut?

Rumors of steep rate cut by the Federal Reserve spread Monday, pushing stocks up and the dollar down. The Fed has a very hard job right now, but I think the market is saying it thinks they are up to the task," said Don Wilson, chief executive of DRW Trading Group. The Fed's current rate is down to 4.25% and many are expecting another half a percentage-point cut. Overall, it was a good day, and it seemed as if investors temporarily put concerns aside. DJIA +171.85 Nasdaq +38.36 S&P 500 +15.23

Friday, January 11, 2008

Countrywide makes a deal

The Dow Jones Industrial Average ended down 246.79 points Friday, or 1.9%, at 12606.30. American Express, a component of the average, tumbled by 10% after warning it will have to take a charge of $440 million before taxes in the fourth quarter to cover higher delinquencies and loan write-offs. Investors sold shares throughout the day as their focus shifted from the mortgage crisis effect on financial firms to the effects it is having in other areas of the economy. Bank of America meanwhile confirmed that it had reached a $4 billion all-stock deal to acquire Countrywide Financial. Gold contracts ended up $4.10, at a record $897.70 per ounce Friday. DJIA -246.79 Nasdaq -48.58 S&P 500 -19.31

Thursday, January 10, 2008

How Do You Spell Relief?

Relief came to the financial sector today, as word came that Bank of America may buy Countrywide Financial. The news sent the stock north. Ahh, thank goodness for some good news! Bernanke testified before Congress and offered another bit of good news. The Fed is ready to make "substantive" cuts. You could almost hear the applause from Wall Street. The result was a bounce on the Street. Let's hope the relief keeps coming. DJIA +117.78 NASDAQ +13.97 S&P 500 +11.20

Tuesday, January 08, 2008

Countrywide hit again

The credit-crises fueled another day of financial losses Tuesday. Countrywide Financial, the nation's leading mortgage lender, dropped 18% even after the company said rumors that it was planning to file for bankruptcy protection weren't true. Option activity in financial stocks was very negative, as put options heavily outweighed call options. Gold futures hit a new record high, up $17.90 to $879.90 an ounce and crude-oil futures rose $1.42, to $97.51 a barrel. DJIA -238.42 Nasdaq -58.95 S&P 500 -25.99

Monday, January 07, 2008

Going Flat

Politics are taking center stage. The Iowa caucuses are over, and the New Hampshire primaries happen tomorrow. For some, the most important issues are international, but for most, it still boils down to "the economy stupid." Paulson is working on plans to aid the real estate market. The Feds seem poised to lower rates again this month. And both parties are talking about how to help the middle class. McDonald's is going to start competing with Starbucks. Maybe lower coffee prices will help us all. Of course, what we really need are lower gas prices! Markets finished flat today. DJIA +27.31 NASDAQ -5.19 S&P 500 +4.55

Friday, January 04, 2008

Not a Pretty Day!

I went to Circuit City yesterday to buy a computer. I couldn't find a salesperson to help me. Their response? We've laid off the seasonal workers. Maybe it's just this store, but the job numbers for December were disappointing. During a heavy shopping season, the economy created only 18,000 new jobs. Could we hope for a revision? That won't help today's numbers, as investors sold off on the news. Large-caps were down 2 to 2 1/2%, while NASDAQ fell nearly 4%. Ouch! As I wait for the January effect, I think I'll start trolling for bargains! DJIA -256.54 NASDAQ -98.03 S&P 500 -35.53

Wednesday, January 02, 2008


The new year started with down markets. Factory orders were down. No big surprise there, but the surprise was in crude oil. The price per barrel touched the $100 mark, causing investors to scurry for the exits. It's a strange mix. Lower factory orders, but higher oil? What gives with these mixed signals? Worldwide, growth and the demand for oil stays high, but the U.S. market is slowing. Housing showed a little life with last month's numbers. Let's hope this first day is not the harbinger of things to come. DJIA -220.86 NASDAQ -42.65 S&P 500 -21.20