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Tuesday Morning Coffee with TradingMarkets

By Ashton Dorkins | TradingMarkets.com
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Good Morning!

Goldman Sachs Profit Declines 53%, Beats Estimates... Lehman Brothers Beats Estimates, Reports Smallest Profit Since 2003... Housing Starts and Building Permits Drop to Lowest Level in 16-Years... Producer Prices Rise... GMAC Names New CEO... Japan Nominates Central Bank Successor... Bush Backs Fed Actions.

Asian stocks up... European stocks up... Dollar plunges... Bonds Rise... And the futures are pointing to a higher open.

Take the TradingMarkets Path to Professional Trading - Level 1 course and immediately improve your trading. It's free! Start here.

TradingMarkets 5 Business Stories You Need to Know

Goldman Sachs Net Slides 53% - Wall Street Journal
Goldman Sachs said its fiscal first-quarter net earnings dropped 53% to $1.51 billion, but the results were better than expected.

Lehman Posts Smallest Quarterly Profit Since '03 After Markdown - Bloomberg
Lehman Brothers Holdings reported its smallest quarterly profit since 2003, a day after the fourth-largest U.S. securities firm lost 19% of market value.

Euro and Pound Rise as Markets Stabilize - Will Fed Cut by 100bp? - Daily FX
A sense of relative calm returned to the currency markets after yesterday’s upside reversal in the DJIA helped soothe investors nerves, leading to recoveries in Nikkei, Footsie and the DAX.

Is Lehman Liquid Enough? - BusinessWeek
The firm's heavy subprime exposure and minimal writedowns to this point have investors nervous. But defenders say it's no Bear Stearns.

Credit Default Swaps: The Next Crisis? - Time
As Bear Stearns careened toward its eventual fire sale to JPMorgan Chase last weekend, the cost of protecting its debt, through credit default swaps, began to rise rapidly as investors feared that Bear would not be good for the money it promised on its bonds.

For more stories as they happen, go to our Breaking News section.

TradingMarkets 7 Stocks You Need to Know for Today

Here are 7 stocks for traders for today from TradingMarkets.com:

  • Bear Stearns (BSC | Quote | Chart | News | PowerRating) agreed to be sold to JPMorgan Chase for $2 per share, or $236 million. BSC shares closed at $30 on Friday, valuing the 85-year old investment bank at $3.5 billion.

  • Many analysts felt the price JPMorgan Chase (JPM | Quote | Chart | News | PowerRating) is paying significantly undervalues Bear Stearns, even allowing for litigation, de-leveraging and integration costs. Especially since the Fed is providing up to $30 billion in financing for BSC's illiquid assets. The decision means the Fed, not JPMorgan Chase, is carrying substantial risk.

  • MF Global (MF | Quote | Chart | News | PowerRating) shares fell as much as 80%, despite reassurances from the company that it was not experiencing liquidity problems.

  • Shares of Lehman Brothers (LEH | Quote | Chart | News | PowerRating) plunged more than 20% yesterday, also on liquidity concerns. On Tuesday LEH reported earnings of $0.81, beating estimates by $0.09.

  • Also before the market open, Goldman Sachs (GS | Quote | Chart | News | PowerRating) reported earnings of $3.23, beating estimates by $0.65.

  • In deal news, CME Group (CME | Quote | Chart | News | PowerRating) agreed to acquire Nymex Holdings (NMX | Quote | Chart | News | PowerRating) for $9.3 billion.

  • And, International Paper (IP | Quote | Chart | News | PowerRating) agreed to acquire the packaging and recycling businesses of Weyerhaeuser (WY | Quote | Chart | News | PowerRating) for $6 billion.

For a list of today's highest PowerRating stocks, click here.

TradingMarkets 5 Top PowerRatings Stocks for Today

Company
Symbol PowerRatings
CHC Helicopter FLI 10
Methanex MEOH 9
UAL Corp. UAUA 8
Sealy ZZ 8
Universal UVV 8
View More Stocks

TradingMarkets Tracking the Wizards

How to Exit Option Trades as Expiration Day Approaches - TradingMarkets
In-the-money calls and puts often trade for less than their intrinsic value on, or near, expiration day. But, there are ways that you can get the full value for your option position...

Why Is This ETF Up 43.9% for the Year? - TradingMarkets
This exchange-traded fund is up more than 40% year-to-date and includes among its holdings some of the biggest stocks in the NASDAQ 100.

When Do Overbought Stocks Simply Become More Overbought? - TradingMarkets
Sometimes stocks that become overbought don't do anything more than become more overbought.

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