New book by Larry Connors Click here Improve your trading - See how
Top economic leaders urged Congress to pass a $700 billion Wall Street bailout Monday, as pressure is being placed on policymakers to pass the largest government intervention in the U.S. economy since the Great Depression.
President George W. Bush repeated his request for Congress to pass a financial bailout in a televised address Monday morning. Encouraging bipartisanship, the President reached out to members of his own party, as Republicans weighed their vote.
Bush called the bill, the Emergency Economic Stabilization Act, a "bold bill that will help keep the crisis in our financial system from spreading throughout our economy."
Worries over the health of the financial sector spread after Citigroup (C) announced it has reached an agreement-in-principle to acquire all of the banking subsidiaries of Wachovia Corp. (WB | Quote | Chart | News | PowerRating), creating the largest U.S. bank by total deposits.
Wachovia will remain a public company and retain its asset management, retail brokerage, and certain select parts of its wealth management businesses, including the Evergreen and Wachovia Securities franchises.
Citi will acquire more than $700 billion worth of assets of Wachovia's banking subsidiaries, and related liabilities. The Federal Deposit Insurance Corp., or FDIC, has agreed to provide loss protection in connection with approximately $312 billion of mortgage-related and other Wachovia assets.
In other news, Morgan Stanley (MS | Quote | Chart | News | PowerRating) said that Mitsubishi UFJ Financial Group (MTU | Quote | Chart | News | PowerRating) is investing $9 billion in equity in the company for a 21 percent interest.
Mitsubishi UFJ will acquire 9.9 percent of Morgan Stanley's common stock on a primary basis at a price of $25.25 per share, for a total of $3 billion. Mitsubishi UFJ will also acquire $6 billion of perpetual non-cumulative convertible preferred stock with a 10 percent dividend and a conversion price of $31.25 per share.
In recent trading, the major averages have moved well off of their worst levels of the day, although they remain sharply lower. The Dow is currently down 261.01 at 10,882.12, the Nasdaq is down 85.90 at 2,097.44 and the S&P 500 is down 39.13 at 1,173.88.
Sector News
Resource stocks are turning in some of the worst performances, as commodity prices drop. Within the resource sector, steel stocks are sharply lower, with the Amex Steel Index falling 11 percent. Adding to a sharp decline in the previous session, the index set a yearly intraday low earlier in the session.
Among steel stocks, Mechel Open Joint Stock (MTL | Quote | Chart | News | PowerRating) and Companhia Siderurgica Nacional (SID | Quote | Chart | News | PowerRating) are two of the biggest decliners. Mechel is down 16 percent, compared to a 11.9 percent decline by Companhia.
Oil and oil service stocks are also seeing significant selling pressure. The Amex Oil Index is falling 5.9 percent, while the Philadelphia Oil Service Index is seeing a decline of 6.6 percent. The price of oil is currently down $5.58 at $101.31 a barrel on worries of a global slowdown.
Amid concerns over the health of the financial sector, banking stocks are also posting substantial losses. The KBW Bank Index is down 6.2 percent, reversing gains posted in the previous two sessions. National City (NCC | Quote | Chart | News | PowerRating) and Fifth Third Bancorp (FITB | Quote | Chart | News | PowerRating) are among the biggest decliners, down 58.2 percent and 18.9 percent, respectively.
Other stocks that are sharply lower include disk drive, telecommunications, and internet stocks. The Amex Disk Drive Index is down 6.8 percent, the Amex Telecommunications Index is down 5.4 percent and the Amex Internet Index is down 4.7 percent.
Stocks Driven By Analysts Comments
Among individual stocks, Apple (AAPL | Quote | Chart | News | PowerRating) is seeing significant selling pressure after a RBC Capital Markets analyst downgraded the stock to a Sector Perform rating due to an expected pullback in consumer spending. The analyst also cut his 2008 earnings estimate to $5.26 per share.
Shares of the maker of the iPhone and iPod are currently trading lower by 15.5 percent, extending a month-long downtrend. Earlier in the day, the stock set a seven-month intraday low.
DISH Network (DISH | Quote | Chart | News | PowerRating) is also posting a substantial loss following a downgrade by Deutsche Securities. An analyst at Deutsche downgraded DISH to a Hold rating from a Buy rating while also cutting the stock's price target to $31 per share. The stock is down 12.3 percent after setting a five-year intraday low.
On the other hand, Nortel Networks (NT | Quote | Chart | News | PowerRating) was upgraded to a Buy rating from a Neutral rating by an analyst at UBS, sending the stock notably higher. The stock is up 2 percent, adding to a gain posted in the previous session.
Other Markets
Stock markets across the Asia-Pacific region closed lower on Monday, led by Hong Kong and India. The stock markets in China, Malaysia, and Taiwan remained closed on account of public holidays. Japan's benchmark Nikkei 225 index closed down 1.3 percent at 11,744.
Japanese retail sales rose 0.7 percent in August from a year-earlier, rising for the 13th straight month, the Ministry of Economy, Trade and Industry said. In July, retail sales rose by a revised 2.0 percent year-over-year. Sales at department stores and supermarkets fell for the fifth straight month.
The major European markets are also trading lower on the back of incremental bad news on the financial sector. U.K. mortgage lender Bradford & Bingley announced that it is selling its retail deposits, branch network and related employees to Abbey National. Additionally, the governments of Belgium, Luxembourg and the Netherlands announced an 11.2 billion euro bailout of Fortis.
The French CAC 40 Index is receding 3.7 percent, compared to a 3.6 percent drop by the German DAX Index. The U.K.'s FTSE 100 Index is declining 4 percent.
Meanwhile, treasuries are seeing further upside, as investors look to the safety of government backed bonds. Subsequently, the yield on the benchmark ten-year note is currently down 11.5 basis points at 3.712 percent.
For comments and feedback: contact editorial@rttnews.com Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
15260 Ventura Blvd., Ste. 2200
Sherman Oaks, CA 91403
© Copyright 2009 The Connors Group, Inc.
