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| Market Summary |
Wall Street headed lower for a second day as economic weakness kept stocks in red. The Dow Jones Industrial Average has lost over 800 points in the last two days and ended today's session below the 9,000 mark. October retail sales from the nation's chain stores were terrible and gave investors a reason to keep the sell-off going. In addition to poor retail sales, the Labor Department said that the number of individuals drawing unemployment rose by 122,000 to 3.84 million in late October. Automakers including General Motors (GM: Charts, News, Offers), Ford Motors (F: Charts, News, Offers), and Toyota Motors (TM: Charts, News, Offers) struggled to reach solid ground during the session. The slew of bad economic reports diverted attention from news that European and British banks cut key interest rates. The dollar responded favorably and gained against the euro. In corporate news, Cisco (CSCO: Charts, News, Offers) said that it saw a steep drop in orders in October and will stopped hiring. AT&T (T: Charts, News, Offers) announced that it will buy Wayport, Inc. for $275 million. Wayport, Inc. is an operator of 10,000 Wi-Fi hotspots in various locations. U.S. light crude continued to fall on the New York Mercantile Exchange, shedding $4.68 to settle at $60.63 a barrel.
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| Market News |
Toyota (TM: Charts, News, Offers) expects its earnings for this fiscal year will be less than a third of last year's profit and its lowest annual total in eight years. The forecast shows it is feeling the effects of a contraction in the vital U.S auto market as well as the credit crunch that has led to big losses at its American rivals. Toyota Motor Corp., which had been riding high on the success of its Prius hybrid and Camry sedan, also blamed a surging yen on Thursday as it slashed its profit forecast for the year ending March 2009. The stronger yen erodes Toyota's overseas income. Japan's biggest automaker reported that its profit plunged 69 percent to 139.8 billion yen ($1.4 billion) in the July-September quarter. Quarterly sales dropped 8 percent to 5.98 trillion yen ($60 billion). (Source: Yahoo! Finance) Full Story
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The nation's retailers saw their sales plummet last month to the weakest October level since at least 1969, as the financial crisis and mounting layoffs left shoppers too scared to shop. The stunning drop-off from an already weak September performance is further darkening the outlook for the holiday season and dimming hopes for any industry recovery until at least the second half of next year. As merchants reported their dismal sales figures Thursday, Wal-Mart Stores Inc., the world's largest retailer, proved to be among the few bright spots as it benefits from shoppers focusing on buying basics at discounters. Most other stores, from luxury merchants to teen retailers, suffered steep sales declines as consumers were spooked by shrinking retirement funds and volatile markets. The number of people continuing to receive jobless benefits reached its highest level in more than 25 years, according to government figures released Thursday. (Source: Forbes.com) Full Story
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Intel's (INTC: Charts, News, Offers) chief executive believes the current economic turmoil is the worst in his lifetime, and Wall Street is increasingly of the mind that the chip giant will not escape the crisis unscathed. During an interview at a technology conference in San Francisco on Thursday, Intel CEO Paul Otellini reportedly told the audience that the U.S. is in a recession that will last for two to three quarters, and that the slowdown will spread to other regions of the world. "My sense is this is the deepest one I have seen in my lifetime," Otellini said, according to the Barron's Tech Trader Daily blog. Shares of Intel tumbled 7.5%, or $1.13, to $13.93 in midday trading Thursday, along with a broader market decline that had the Dow Jones Industrial Average off 444 points. Intel is the world's No.1 maker of microprocessors used in PCs and servers, with about 80% market share. That scale provides Intel with a great deal of financial stability, but it also makes it harder for Intel to avoid the trends in the overall market. (Source: TheStreet) Full Story
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| Featured Article from the InvestorGuide University |
Fundamental Analysis
This investment strategy involves evaluating a stock by examining the company, especially its operations and its financial condition. Here we look at several valuation methods, factoring in price/earnings ratio, PEG, dividend yields, book value, price/sales ratio, and return on equity.
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| Market Analysis |
Investors worldwide have prepared for a new chief executive of the most important country on Earth for months by shedding assets and shivering with dread -- and on Tuesday they got their man. The new boss of the U.S. Treasury, Federal Reserve, armed forces and dollar, the new director of global trade flows, the new captain of the capitalist system, will be a 47-year-old attorney who grew up about as far from the dark center of power as can be imagined -- in sun-baked Honolulu. Barack Obama now stands in broad daylight, where skeptical investors in Tokyo, Singapore, Beijing and London can assess the real man instead of the political animal running for election. I think they will find his intelligence, his oratory, his dedication to public service, his ease at gathering smart advisers, his ability to inspire confidence and his tight management of a brilliant political campaign are all the real deal. As a result, despite his incredibly thin resume, investors will come to believe he is ready to take on this august job. (Source: MSN Money) Full Story
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Bankers angling for a slurp at the U.S. government's bailout trough should be careful what they wish for. Today's freshly minted capital might become tomorrow's debt. How could that be? It turns out the accounting mandarins are looking to redefine the difference between equity and liabilities on corporate financial statements. And, based on what they've decided so far, there's a chance the government's bailout dough will have to be shown as debt on banks' balance sheets someday. That would make sense, too. To date, Treasury Secretary Hank Paulson has allocated $250 billion for government investments in U.S. banks. Those stakes mainly will take the form of preferred stock, which Paulson has said will count in the banks' Tier 1 regulatory capital. Nine large banks, including Citigroup Inc. and Wells Fargo & Co., will get $125 billion. The rest would be spread among smaller financial institutions. The cash isn't quite theirs for the keeping. (Source: Bloomberg) Full Story
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Opponents of a planned search advertising deal between Google (GOOG: Charts, News, Offers) and Yahoo! (YHOO: Charts, News, Offers) may have little cause to celebrate the proposal's demise. Advertisers fretted the alliance, announced in June, would make Google even more dominant in the most lucrative corner of online advertising. The deal unraveled Nov. 5 after Google retreated under the threat of a Justice Dept. lawsuit to block it. Yet, advertisers still face what they feared in the first place: an even stronger Google. The paradoxical outcome highlights the difficulty of applying traditional antitrust doctrine to swiftly innovating technology markets. The Google-Yahoo deal would have netted Yahoo up to $450 million a year in operating cash in return for running Google ads on some of its pages. (Source: BusinessWeek) Full Story
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