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Breaking News | Real-time commentary on the market, with links to key sources.

Market Currents - Real Time Wall Street Breakfast - Top Stories
Tuesday, October 7 2008
Earliest at Top
Today's Market Currents »
  • 5:12 PM Congressional Budget Office's Peter Orzag on the $2 trillion in pension losses over the past year or so. COMMENT!
  • 4:25 PM Alcoa (AA): Q3 EPS of $0.37 misses by $0.17. Revenue of $7.2B vs. $7.23B. Suspends share repurchases. Says recent margin squeeze (falling prices/soft demand) will have greater impact going forward. [PR] COMMENT!
  • 4:08 PM Yum! Brands (YUM): Q3 EPS of $0.58 beats by $0.04. Revenue of $2.84B vs. $2.78B. Shares +2.4%. [PR] COMMENT!
  • 4:07 PM Sealy (ZZ): Q3 EPS of $0.12 beats by $0.04. Revenue of $405M (-9.3%) vs. $399M. Shares -4.9%. [PR] COMMENT!
  • 4:02 PM Crude +2.18% to $89.72. Gold +2.72% to $889.80. Silver +2.17% to $11.53. Platinum +3.79% to $1,024. COMMENT!
  • 4:00 PM In the final two minutes, S&P 500 dips below 1,000 and stays there; at close -5.74% to 996.23. Dow -5.11% to 9,447.11. Nasdaq -5.8% to 1,754.88. COMMENT!
  • 3:54 PM Consumer credit fell by $7.9B in August, a contrast to the $5B increase expected by economists. For the first time in almost 11 years, Americans paid off more debt than they spent. It's the largest drop since they began keeping statistics in 1943. COMMENT!
  • 3:53 PM The S&P 500 almost breached 1,000 (low: 1,001.04). Either way, it's trading at levels last seen in August 2003. Currently -4.81% to 1,005. COMMENT!
  • 3:49 PM Corn closed down 1.12% to $4.1925. Wheat rose 2% to $6.0725. Soybeans gained 1.2% to $9.33. COMMENT!
  • 3:47 PM Entering the final quarter hour, indexes are pushing to new lows. Dow -4.3% to 9,539. S&P -4.2%. Nasdaq -4.05%. COMMENT!
  • 3:46 PM "If intensifying financial strains led to a significant worsening of the growth outlook, a policy response could be required," the Fed noted at its Sept. 16 meeting (minutes). Little did it know... COMMENT!
  • 3:38 PM A meltdown in the massive CDS market, if unaddressed by regulators, could make Paulson's $700B rescue fund look like a rounding error. COMMENT!
  • 3:24 PM "We have reached the point where the Fed is the only bank in the land or, better, in the globe as the huge swap lines now allow the Fed to lend dollars to non-U.S. banks outside the U.S." - Nouriel Roubini COMMENT!
  • 3:20 PM Did JPMorgan Chase (JPM) push Merrill Lynch (MER) into its forced marriage with Bank of America (BAC)? COMMENT!
  • 3:11 PM Henry Blodget to Jerry Yang (YHOO): Please don't buy AOL (TWX) for $8B. COMMENT!
  • 3:00 PM Sector ETF weakness: Solar– TAN -15.7%. Financials– IYF -8.3%. Clean Energy– PBW -8.1%. Broker/Dealers– IAI -7.8%. Regional Banks– RKH -7.3%. Insurance– KIE -6.8%. COMMENT!
  • 3:00 PM Sector ETF strength: Silver– SLV +5.8%. Gold– GLD +3.7%. Agriculture– DBA +3.2%. Commodities– DBC +3%. Base Metals– DBB +2.3%. COMMENT!
  • 2:59 PM Approaching the final hour, there's not much cheer on Wall Street. Dow -2.8% to 9,685. S&P -2.54%. Nasdaq -3%. COMMENT!
  • 2:56 PM Morgan Stanley (MS) says its deal to raise $9B from Mitsubishi UFJ Financial Group (MTU) is on track - after rumors MUFG was pulling out sent MS shares plunging as much as 40%. Currently -22.5% to $18.20. COMMENT!
  • 2:41 PM Wells Fargo (WFC) is likely to win 75-80% of Wachovia's (WB) deposit base, a source says. It would also take most of WB's assets, including more toxic option-pay mortgages. COMMENT!
  • 2:25 PM Interesting time to launch an airline: Ryanair (RYAAY) announces plans to establish a new low-cost transatlantic airline within the next three years. COMMENT!
  • 2:04 PM Midafternoon markets are sinking fast: Dow -3.4%, S&P -3.7%, Nasdaq -4.1%. COMMENT!
  • 1:57 PM XLF has fallen to a lifetime low of 17.04, voiding historical support. COMMENT!
  • 1:55 PM News Corp. (NWS) pays Verisign (VRSN) $200M for the 49% stake of Jamba it doesn't already own. Jamba, a ringtone and mobiles games provider, will still face the problem of how to counter falling ringtone sales. NWS -5.1%, VRSN +1.7%. COMMENT!
  • 1:54 PM Barclay-Lehman analysts say 2008 online e-commerce growth will be just 8% - half of 2007's - as de-leveraging consumers, who now have twice as much debt as disposable income, shift to a needs-based spending strategy. COMMENT!
  • 1:33 PM Bernanke's speech to NABE: "outlook for economic growth has worsened" but "outlook for inflation has improved somewhat." Hints that a Fed rate cut could come before the Oct. 28-29 FOMC meeting. COMMENT!
  • 1:21 PM Some think even shrunken ad growth forecasts are overdone: "I don't see any growth for the industry next year," one ad executive says. "It will be scary. There are no Olympics, no election spending and the real impact of what happened on Wall Street will filter down." COMMENT!
  • 1:07 PM Closely-watched ad forecaster ZenithOptimedia slashes its 2009 U.S. growth forecast to just 1% from 2.6%, the first major sign economic turmoil is taking a toll on advertising. COMMENT!
  • 1:00 PM Crude oil +1.63% to 89.24. Gold +0.76% to 872.80. COMMENT!
  • 12:52 PM National retailers: the need to balance large-scale efficiencies with local realities. (HD, SWY, JCP, LOW, WMT, KSS) COMMENT!
  • 12:37 PM Legalities aside, Vikram Pandit is playing a dangerous game with Citigroup's (C) public image by continuing to drive its inferior bid for Wachovia (WB). COMMENT!
  • 12:21 PM CME (CME) and hedge-fund powerhouse Citadel are working on an electronic trading platform for credit-default swaps, slated for November. Major dealers, who control 90% of the market, agree with the concept but may not be willing to forfeit their profits. COMMENT!
  • 12:17 PM European stock markets mostly finished above their lows, except for the DAX, which had more of a rollercoaster day. FTSE +0.35%. CAC +0.55%. DAX -1.12%. COMMENT!
  • 12:12 PM Markets at midday are coming off lows: Dow -0.75%. S&P -0.9%. Nasdaq -1.01%. COMMENT!
  • 12:10 PM Is Microsoft (MSFT) paring back some of its less popular business units? Its Software Licensing and Protection Service (SLPS) seems to have disappeared. COMMENT!
  • 12:07 PM Goldman's Arjun Murti backtracks on his $120, Q4 target for crude. "Oil prices increasingly appear unlikely to sustain a rally until global GDP expectations bottom," he says. COMMENT!
  • 11:50 AM Economists say Australia's unexpected 1% rate slash increases the possibility the world's central bankers are preparing global coordinated rate cuts in a bid to prevent a major, global downturn. (previously) COMMENT!
  • 11:35 AM "The recession is going to be a little deeper than we thought," Bank of America (BAC) CEO Ken Lewis said on a conference call. "It's going to take some more time and some more pain." COMMENT!
  • 11:25 AM In a study of historical credit crunches and housing busts, credit crises typically lasted 2.5 years with almost a 20% decline in real credit, while housing busts typically lasted 4.5 years with a 30% fall in real house prices. Ouch. COMMENT!
  • 10:56 AM For the second time in two weeks, Massachusetts delays the sale of $750M in short-term notes as tumultuous credit markets undermine demand. COMMENT!
  • 10:52 AM Iceland asks Russia for a $5.4B loan, pegs the sinking krona to a basket of currencies and nationalizes its second-biggest bank to avert a collapse of its financial system. COMMENT!
  • 10:41 AM With its core business slowing down, eBay (EBAY) may focus more on ramping up Kijiji, its online classified ads business, to better compete with Craigslist. COMMENT!
  • 10:29 AM Markets climb slightly in the first hour of trading. Dow +0.5%. S&P +0.4%. Nasdaq +0.1%. COMMENT!
  • 10:22 AM A new IMF report predicts U.S. losses of $1.4T, well above the $945B predicted in April and higher than the IMF Managing Director's $1.3T forecast from two weeks ago. The report calls for 'internationally coherent and decisive policy measures.' COMMENT!
  • 10:17 AM Sector ETF weakness: Solar– TAN -5.7%. Regional Banks– RKH -4.5%. Financials– IYF -4.3%. Regional Banks– KRE -4.2%. Solar– KWT -3.4%. COMMENT!
  • 10:16 AM Sector ETF strength: Agribusiness– MOO +5.4%. Silver– SLV +5.3%. Agriculture– DBA +3.5%. Base Metals– DBB +3.1%. Commodities– DBC +2.9%. COMMENT!
  • 10:15 AM Dow laggards: BAC -14.8%, JPM -3.5%, WMT -1.8%, PFE -1.7%, MSFT -1.6%. COMMENT!
  • 10:15 AM Dow leaders: AXP +3.2%, GE +2.3%, MRK +2.2%, AA +1.9%, XOM +1.7%. COMMENT!
  • 10:09 AM Reliant Energy (RRI) is considering strategic alternatives, including the sale of its retail unit. The move would underscore the difficulties facing some power companies from the credit crunch and the aftermath of Hurricane Ike. RRI -2.5%. COMMENT!
  • 10:03 AM World Bank President Robert Zoellick: "The G-7 is not working. We need a better group for a different time." He calls for doubling the G-7 to include major developing economies in order to better deal with global crises. COMMENT!
  • 9:48 AM According to UBS, risk appetite among equity investors is at its lowest level in at least 16 years. Similar patterns exist in fixed income and foreign exchange. COMMENT!
  • 9:45 AM A federal inquiry questions the impartiality of the S.E.C. on its investigation of possible insider trading at Pequot Capital Management. COMMENT!
  • 9:33 AM National chain store sales fell 1.4% in September vs. the previous month, Redbook says, but gained 1.3% vs. a year ago. (See also: ICSC retail sales) COMMENT!
  • 9:25 AM Futures indicate strong open. Dow +1.6% to 10.125. S&P +2.14%. Nasdaq +2.26%. COMMENT!
  • 9:20 AM Safeway (SWY): Q3 EPS of $0.46 misses by $0.01. Revenue of $10.2B (+3.9%) vs. $10.1B. Shares -0.3% pre-market. [PR] COMMENT!
  • 9:20 AM Russia PM Medvedev pledges to lend $36B to its banks to help them unfreeze credit markets. Yesterday, it shuttered its markets following a collosal 19% drop. COMMENT!
  • 9:17 AM Goldman downgrades SunPower (SPWRA) to Sell from Buy and First Solar (FSLR) to Conviction Sell from Buy. "The risk of oversupply in the solar market will soon become a reality," it says, citing falling subsidies combined with a wave of production. COMMENT!
  • 9:11 AM Futures climbing: Dow +1.25% to 10.087. S&P +1.7%. Nasdaq +2%. Crude +4.9% to $92.12. Gold +2.21% to $884.90. COMMENT!
  • 9:10 AM Flight-to-safety Treasurys drop on CPFF announcement: 30-year -1%. 10-year -0.89%. 5-year -0.5%. 2-year -0.25%. COMMENT!
  • 9:09 AM Pimco's Bill Gross is looking mighty prescient. COMMENT!
  • 9:07 AM Fed hopes that "by eliminating much of the risk that eligible issuers will not be able to repay investors by rolling over their maturing commercial paper obligations, this facility should encourage investors to once again engage in term lending in the commercial paper market," thus easing elevated rates. COMMENT!
  • 9:04 AM Fed to buy three-month unsecured and asset-backed paper directly from issuers. Unsecured paper will require up-front fees or some form of security. COMMENT!
  • 9:02 AM Stock futures jump on latest Fed facility. Dow +0.75% to 10.041. S&P +1.14%. Nasdaq +0.89%. COMMENT!
  • 9:01 AM Fed announces creation of the Commercial Paper Funding Facility (CPFF) to help provide liquidity to term funding markets. COMMENT!
  • 8:55 AM Futures sink back into negative territory. Dow -0.9% to 9,880. S&P -0.8%. Nasdaq -0.8%. COMMENT!
  • 8:53 AM Corning (GLW) -2.5% premarket. It widened its 2009 global LCD glass market growth forecast to 15-25% from 20-25%, and said it sees 'significant uncertainty' going forward. COMMENT!
  • 8:41 AM For those seeking a spiritual side to the financial storm, Pope Benedict XVI says the crisis shows "money vanishes, it is nothing." The Vatican relies on earnings from roughly $1B in stocks, bonds and real estate. COMMENT!
  • 8:29 AM According to Goldman Sachs and JPMorgan Chase, India may further lower its reserve ratio for banks if the financial crisis worsens. Yesterday, it cut the ratio to 8.5% from 9% effective later this week. (ETF: INP) COMMENT!
  • 8:19 AM Siemens (SI) may reach a settlement by next month over a bribery scandal that occurred two years ago. The company may have to pay a large fine and agree to years of compliance monitoring. Shares -6.4% pre-market. COMMENT!
  • 8:02 AM Morgan Stanley forecasts China will cut interest rates as many as five times by the end of 2009 to limit damage from the 'global financial tsunami.' (ETFs: PGJ, FXI) COMMENT!
  • 7:53 AM How to prevent a global recession? Fund manager Barton Bigg thinks central banks worldwide need a synchronized rate cut. Michel Camdessus, formerly of the IMF, says Asia's 'dynamism' will keep global markets growing. COMMENT!
  • 7:50 AM The U.K.'s two largest business lobbies call for BoE to cut its key interest rate by half a point to 4.5% this week, after an 'alarming' drop in U.K. business confidence this past quarter. COMMENT!
  • 7:47 AM Chain-store sales rose 1.3% last week vs. a year ago and 0.1% vs. the week before, ICSC says. Notably strong were discounters, department stores and apparel. (ETF: RTH) COMMENT!
  • 7:44 AM Morgan Stanley cuts its growth outlook for Japan and now expects a 0.3% contraction through the end of March 2009 vs. the +0.4% growth predicted last month. COMMENT!
  • 7:41 AM Overnight Libor jumps 157 BPs to 3.94%. Euribor +22 BPs to 4.27%. "The seizure in global credit markets is deepening on speculation central bank attempts to revive lending between financial institutions won't work." COMMENT!
  • 7:41 AM The U.S. makes up just 7% of China's export market, so even a 'catastrophic' 10% drop in U.S. consumer goods demand would cause only a 0.3% cut in China's GDP. Good news for China, since U.S. demand isn't looking too healthy. COMMENT!
  • 7:34 AM Japan's government acknowledges the economy is 'deteriorating' and says 'the chance of a recession is high.' BoJ leaves the benchmark rate unchanged at 0.5%, and says there are 'substantial uncertainties' about Japan's economic outlook. COMMENT!
  • 7:25 AM Shares of Japanese automakers, including Toyota (TM), Honda (HMC) and Nissan (NSANY), fall sharply on concerns the yen's strength will hurt earnings. Volkswagen (VLKAY.PK) overtakes Toyota as the world's largest automaker by value. COMMENT!
  • 7:17 AM Russia suspends trading for a second day after major market losses, and plans to approve new measures to support its financial system as early as today. (ETF: RSX) COMMENT!
  • 7:11 AM Australian stocks rally and the Australian dollar climbs from a four-year low after the country's biggest interest-rate cut since 1992. (ETF: EWA, AUS) COMMENT!
  • 7:03 AM Baoshan Iron & Steel, China's biggest steelmaker, and Aluminum Corp. of China [Chalco] (ACH) lead China's mining stocks down on concerns the global financial crisis will cause demand for metals to drop precipitously. COMMENT!
  • 6:59 AM Crude +3.26% to $90.73. Gold +2.25% to $885.70. COMMENT!
  • 6:58 AM Overnight futures trading has been extremely volatile. Stock futures climbed, then plunged, then climbed again. Dow +0.74% to 10,038. S&P +1.09%. Nasdaq +1.21%. COMMENT!
  • 6:58 AM Shaking off initial jitters, Europe is higher at midday. London +0.9%. Paris +1.6%. Frankfurt +1.3%. COMMENT!
  • 6:58 AM Asia drifted lower Tuesday. Nikkei -3.03% to 10,156. Shanghai -0.73% to 2,158. BSE Sensex -0.58% to 11,733. Hang Seng closed. COMMENT!
  • 6:37 AM ECB's Noyer sees 'no reason' to believe global stock markets will collapse, despite 'extraordinary' market volatility . Noyer, also the governor of the Bank of France, adds French banks are safe since the French government 'won't let one single bank fail.' COMMENT!
  • 6:31 AM The euro money market interbank overnight rate hits 5.0%, a 2008 record and sharply higher than the 4.10% open. COMMENT!
  • 6:28 AM Australia's decision to cut its borrowing rate by 1% may prompt central bank action in the U.S. and Europe as leaders head into this weekend's G-7 meeting in Washington D.C. COMMENT!
  • 6:24 AM Futures continue to rally from an earlier plunge. Dow +0.43% to 10,007. S&P +0.71%. Nasdaq +0.89%. COMMENT!
  • 6:23 AM ECB's Bini Smaghi says Eurozone inflation has weakened while the economy has grown worse, signalling a possible rate cut. COMMENT!
  • 6:21 AM U.K. manufacturing output fell in August for the sixth month in a row, its worst streak in nearly three decades. The weaker than expected data puts additional pressure on BoE to cut interest rates this week. COMMENT!
  • 6:18 AM Taiwan's exports fall for the first time in 19 months on weakened demand from China. Overseas shipments drop 1.6% vs. an expected 13% gain. COMMENT!
  • 6:16 AM European markets: London -0.3%. Paris +0.7%. Frankfurt -0.2%. COMMENT!
  • 6:04 AM With an eye towards U.S. expansion, Mitsubishi UFJ (MTU) gets regulatory approval to become a financial holding company. This will allow Japan's largest bank to offer full I-banking services and equity underwriting in the U.S. COMMENT!
  • 5:54 AM Central banks continue to struggle to free up frozen credit markets. The most recent capital injections: $9.8B from Bank of Japan, and $1.3B from the Reserve Bank of Australia. Australia also cut its borrowing rate by 1% vs. -0.5% consensus. COMMENT!
  • 5:51 AM "The equity markets are saying RBS (-30%) has the biggest problem," London-based analyst Simon Maughan says, "but something needs to be done across the board. Otherwise RBS concern will simply move onto Barclays (BCS -8.6%)." COMMENT!
  • 5:49 AM Barclays (BCS) categorically denies it requested capital from the U.K. government. Yesterday CEO John Varley said the firm has its "feet on the ground." COMMENT!
  • 5:38 AM Yesterday's meeting of EU finance ministers culminated in nothing more than a reiteration by national leaders of the need to protect bank deposits, and failed to reach consensus on a possible coordinated response to Europe's financial crisis. COMMENT!
  • 5:24 AM Banks pull London's FTSE down, currently -1.24%. "Bank balance sheets must be repaired. The private sector does not have the resources to do this. Governments must inject capital into banks," UBS economist Paul Donovan says. COMMENT!
  • 5:23 AM The U.K. government is considering a plan to partially nationalize banks on a voluntary basis, but officials stress that this is a contingency plan only. COMMENT!
  • 5:22 AM U.K. bank stock carnage: Royal Bank of Scotland (RBS) -34.5%. Lloyds (LYG) -18.5%. Barclays (BCS) -13.3%. COMMENT!
  • 5:21 AM The U.K. government may invest up to $79B in an attempt to restore confidence in its banking system, as three of the U.K.'s biggest banks (BCS, RBS, LYG) say they will each need up to $26B of government money to strengthen their balance sheets. COMMENT!
  • 5:20 AM F5 Networks (FFIV): Sees FQ4 revenue of $171.3M vs. $173.2M consensus due to a sharp slowdown in Europe. [PR] COMMENT!
  • 5:18 AM Futures settle down over the past hour. Dow -0.16% to 9,948. S&P +0.17%. Nasdaq +0.71%. COMMENT!
  • 4:19 AM Stock futures have dived over the past 10 minutes. Dow -0.7% to 9,895. S&P -0.47%. Nasdaq +0.04%. COMMENT!
  • 4:09 AM Treasurys relinquish some of yesterday's gains in overnight trading. 30-year -0.7%. 10-year -0.57%. 5-year -0.2%. 2-year -0.1%. COMMENT!
  • 4:09 AM Crude +3.67% to $91.00. Gold +0.8% to $873.10. COMMENT!
  • 4:09 AM Dow futures drop after topping out at 10,125 just an hour ago, currently +0.37% to 10,000. S&P +0.64%. Nasdaq +1.16%. COMMENT!
  • 3:43 AM Asian markets: Nikkei -3.0%. Shanghai -0.7%. BSE +1.5%. Hang Seng closed. COMMENT!
  • 12:10 AM Notable earnings after Tuesday's close: YUM COMMENT!
  • 12:05 AM Notable earnings before Tuesday's open: SWY COMMENT!
  • 12:00 AM Tuesday's economic calendar:
    7:45 ICSC Retail Store Sales
    8:55 Redbook
    11:00 Fed's Gary Stern speaks on repercussions of the financial shock
    1:15 PM Fed's Bernanke speaks at NABE conference
    2:00 PM FOMC Minutes
    3:00 PM Consumer Credit
    5:00 PM ABC Consumer Confidence Index COMMENT!