FirstAlert[tm] 8/26: What A Bear Does In A Bank

Mon. August 25, 2008; Posted: 08:46 PM

Aug 26, 2008 (financialwire.net via COMTEX) -- TUES | Quote | Chart | News | PowerRating -- August 26, 2008 (FinancialWire) (By Philip Holmes) Not surprisingly, it was the financial sector that gave investors the jitters on Monday's two percent losses. Shares of insurance giant American International Group plunged almost 5% after Credit Suisse said that AIG faces some big charge offs this quarter due to mortgage-related losses. Hopeful rumors that Korea Development Bank might buy troubled Wall Street investment bank Lehman Brothers were quashed when KD said no deal was in the works. Lehman shares promptly lost 96 cents, to close at $13.45. As Catherine Rampell points out in Monday's NY Times, memories of a troubled Bear are helping to spur the latest round of bear market sentiment. Lehman's troubles bring to mind the fate of Bear Stearns, which was only saved by the intervention of the Fed, who engineered the firm's sale to JPMorgan Chase. JPMorgan Chase stock was down 4.09 on Monday, following an admission that the company's $1.2 billion investment in the GSEs, Fannie Mae and Freddie Mac, has lost half of its value this quarter. Other bank stocks took hits on Monday, including Washington Mutual, Huntington Bancshares, Merrill Lynch, Wachovia, Citigroup and Morgan Stanley. Kansas-based Columbian Bank & Trust became the ninth bank to fail so far in 2008. U.S. existing home sales were up 3.1% in July, but so were inventories of unsold houses. Much of the sales activity involved distressed properties, including many bank-owned properties. Were the buyers catching a falling knife, or were they scratching the bottom of an ugly down-cycle? We won't know the answer for at least another quarter, but the smart money is betting on further cuts in house prices. The market needs to get rid of over 11 months' worth of inventory. We'll see some July numbers on new home sales, as well as minutes from the Fed's July policy meeting, on Tuesday.

The Investrend Earnings Calendar features American Eagle Outfitters (NYSE: AEO), expected at $0.28; Big Lots (NYSE: BIG), expected at $0.27; Daktronics (NASDAQ: DAKT), expected at $0.17; Tuesday Morning (NASDAQ: TUES), expected at $-0.06.

The Investrend Economics Calendar lists Weekly Chain Store Sales (8:55 a.m.), Consumer Confidence Index for August (10 a.m.), New Home Sales for July (10 a.m.), FOMC Minutes Released (2 p.m.).

The Investrend Events Calendar showcases Independent Petroleum Association of America International Forum; TER at Morgan Stanley Semiconductor Conference.

The Investrend Money Index is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ 50 Most Actives indicate the direction in which the mass of money is flowing. Last session's trading showed four advancers versus 46 decliners. Advancers were led by Freddie Mac (NYSE: FRE) up 17.08%. Decliners followed Steel Dynamics (NASDAQ: STLD) down 8.24%, Lehman Bros Hld (NYSE: LEH) down 6.66%, Washington Mutual (NYSE: WM) down 6.01%.

Vote in the Investrend Poll Question of the Day at Investrend Information (http://www.investrendinformation.com).

Investrend Website of the Day: http://www.oc16tv.com/

Quote of the Day: "It was not so very long ago that people thought that semiconductors were part-time orchestra leaders and microchips were very, very small snack foods." Geraldine Ferraro

Today is: Women's Equality Day (aka Susan B. Anthony Day).

Happy Birthday: Christopher Columbus, Robert Walpole, Mother Teresa, Albert Sabin, Irving R. Levine, Geraldine Ferraro, Don LaFontaine, Branford Marsalis, Macaulay Culkin.

Today in History: The ship Amistad was captured off Long Island in 1839. Mount Krakatoa erupted in 1883. The 19th amendment to United States Constitution took effect in 1920, giving women the right to vote. The first Major League Baseball game was telecast in 1939, a doubleheader between the Cincinnati Reds and the Brooklyn Dodgers at Ebbets Field, in Brooklyn, New York.

[FirstAlert" was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information (http://www.investrendinformation.com). The opinions expressed in FirstAlert" do not necessarily reflect the opinions of Investrend.]

FinancialWire" is a fully independent, proprietary news wire service of Investrend Information (a division of Investrend Communications, Inc.). FinancialWire" news is written by professional journalists, dedicated to pure journalistic standards. FinancialWire" does not receive or accept any compensation from any individual or subject company (or representative thereof) for its news or opinions. All FinancialWire" news is available at http://www.financialwire.net . Please address any inquiries to feedback@financialwire.net .

Free annual reports for companies mentioned in the news are available at http://investrend.ar.wilink.com/?level=279 .

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For full details on American Eagle Outfitter (AEO) click here. American Eagle Outfitter (AEO) has Short Term PowerRatings of 6. Details on American Eagle Outfitter (AEO) Short Term PowerRatings is available at This Link.

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