Paul Kangas' Stocks in the News
Monday, September 22, 2008
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PAUL KANGAS: A record spike for oil prices today, October crude futures soared as much as $26, touching $130 a barrel. It settled at just under $121, up $16.37, its biggest one-day gain ever. The unprecedented rise caused trading at the New York Mercantile Exchange to stop for five minutes after the $10 daily movement limit was reached. The Commodities Futures Trading Commission is looking into that sharp price swing. The rally was partly fueled by the biggest drop in the U.S. dollar since the euro debuted in 1999. But according to oil trader Joe Marshall of McNamara Options, tomorrow's switch to the November oil contract played an even bigger role.
JOSEPH MARSHALL, OIL TRADER, MCNAMARA OPTIONS: It's the last trading day for October crude futures. And it looked to me like there was a short covering squeeze going on and these positions needed to be closed out today and that's where you got the run-up
That spike in oil prices played a big role in the selling on Wall Street today, as did the clouds of uncertainty surrounding the Treasury's rescue plan. By noon, the Dow was already off 190 points and the NASDAQ down 44 points. Stocks continued lower after that short squeeze sent oil prices soaring, while the dollar tumbled. So stocks went on to end the day at their lowest levels.
The Dow Jones Industrial Average closed down 372.75 at 11,015.69. The NASDAQ Composite tumbled 94.92, ending at 2,178.98. While the Standard & Poor's 500 Index fell 47.99 to 1,207.09. In the bond market, the 10-year note slid 8/32 to 101 8/32, putting the yield at 3.85 percent.
The most active New York Exchange issue, trading 45.7 million shares was American International Group (AIG), moving up $0.87. Major shareholders are discussing alternatives to the $85 billion government rescue loan, which would effectively give control to the government. Then came Washington Mutual (WM) with a $0.92 loss. The Wall Street Journal reports potential buyers are pushing for a government-assisted takeover of WaMu.
Citigroup (C) down $0.64. Sallie Krawcheck, the head of the company's wealth management unit, is stepping down.
Wells Fargo (WFC) down $4.62.
Bank of America (BAC) fell $3.33.
And then Pfizer (PFE), a $0.48 loss.
Sprint Nextel (S) dropped $0.65.
JPMorgan Chase (JPM) down $6.25. Sandler O'Neill brokerage downgraded it from a buy to just a hold.
Morgan Stanley (MS) down $0.12. As you heard, it is becoming a federal bank holding company.
And then Petroleo Brasil (PBR), the big -- or Petrobras, as they called it, a $0.72 gain, 10th in volume. I'm sorry that we don't have charts tonight. We had a computer problem, we apologize. But Hewlett-Packard (HPQ) down $1.10, even though the company plans to buy back $800 billion in stock.
Then came MasterCard (MA), plunging $22.80. Standard & Poor's downgraded it from buy to hold on concerns of customer defections in this economy.
And that affected two other major credit card companies, American Express (AXP) down $3.11.
And Visa (V) losing $4.39.
Fairfax Financial (FFH) had a good day, up $66.22. The company has realized cash proceeds of $574 million during the third quarter from the sale of $3.2 billion in credit default swaps.
Federal Agriculture (FFA), and this is called "Farmer Mac," notes in an SEC filing that it owns $60 million of senior debt issued by Lehman Brothers. Its value is only 19 percent of the principal amount.
Apple (AAPL) topped the active list with a loss of $9.86. Morgan Stanley cut price targets from $192 to $178, and did so on a number of high-tech issues.
Microsoft (MSFT), a $0.24 gain.
Google (GOOG) down $19.01.
Research In Motion (RIMM) fell $5.60.
Cisco (CSCO) off $1.18.
Intel (INTC) a $0.73 loss.
And Qualcomm (QCOM) down $2.78.
Oracle (ORCL) off $0.32.
First Solar (FSLR) down $19.25.
And CME Group (CME) fell $9.
And I should mention incidentally that Microsoft plans to buy back $40 billion of its own stock, boosting the dividend a bit. And Standard & Poor's and Moody's both gave it the coveted triple-A debt rating.
And that's a look at our "Stocks in the News" tonight.
