Thread: This Week in Stocks: 7/21 - 7/27/07

350, check out the link I posted under the tech analysis section on worden bros TA. Its a diatribe on subprime. Although its a lot of assumption, it really shows how deep subrime can go and what a firm like Bear Stearns would do to have to get out danger of billions of dollars of bad loans.

Caution:

WATCH FOR DEAD CATS

The she goes-

Down again.

DIVE.....DIVE......DIVE....

http://www.defenselink.mil/multimedi...wiisubdive.wav

AAAOOOGGGAA...
AAAOOOOOOGGGAA...
AAAOOOOOOGGAA

Originally Posted by Mike

I hope my guess is correct that we'll get a short term bounce off yesterday's ugliness. This is the first time I've been in the market since last July, and I'm definitely nervous about it.

I think we're one or two bad headlines away from falling back to the long-term trendline for support... which I believe is at least another 50 point drop in the S&P.

I guess one mixed blessing about yesterday is with all the movement to T-bills, the 10 year yield collapsed. That will put some downward pressure on mortgage rates and the wide variety of consumer loans pegged to the 10yr.

Good to see ya Mike.

Weekly Wrap

Last Update: 27-Jul-07 16:29 ET

US stocks tumbled in the past week, as persisting problems in the housing market made financial markets jittery over signs that sub-prime mortgage troubles are making their way into prime mortgages and corporate lending markets, which could potentially hinder future leveraged buyout deals that have been a boon for the market in recent years.

The Dow Jones Industrial Average and broader S&P 500 both fell sharply during the week, while Treasury yields also plunged as investors moved away from equities and into safer investments. The yield on the benchmark 10-year Treasury note fell to 4.74% from 4.96% last Friday.

All ten economic sectors were down, with credit concerns and a string of disappointing earnings reports, including those from USG Corp. (USG), Countrywide Financial (CFC), DuPont (DD), Exxon Mobil (XOM), and several major homebuilders, weighing on the overall market.

The Materials sector turned in the worst performance, hurt by the lackluster report from Dow component DuPont, followed by Utilities, Financial, and Consumer Discretionary. The Telecom, Consumer Staples, and Technology sectors fared the best during the week, with technology being supported by a robust report from Apple (AAPL).

Merck (MRK) and fellow Dow component AT&T (T), United Parcel Service (UPS) and Amazon.com (AMZN) also reported positive results, but none had a significant impact on the overall market – now at the peak of second quarter earnings season – amid overarching concerns about housing and the credit markets.

The latest housing data offered more evidence of a prolonged slowdown in housing. On Wednesday the National Association of Realtors reported that existing home sales, which represent approximately 85% of the housing market, fell 3.8% in June to a 5.75 million annual rate. That was a larger decline than expected and marked the lowest level in nearly five years.

Meanwhile, on Thursday, the Commerce Department showed sales of new homes dropped by 6.6% last month to an annual rate of 834,000, well below the consensus estimate of 900,000. The median home price also fell 2.2% to $237,900. That was the largest drop since April.

The problems in the housing sector were also seen in the latest results from homebuilders, including DR Horton (DHI), Pulte Homes (PHM), and Centex (CTX), which continue to struggle with a glut of unsold homes on the market and the fallout in sub-prime lending.

Although Friday's GDP data came in better than expected, and momentarily lifted stocks, it was dismissed by the markets as old news, and investors remained focused on troubles in the mortgage and corporate lending markets.

With no bottom seen in the current housing slump and problems in sub-prime lending making their way into other sectors of the economy, the markets are likely to remain jittery in the near term.

The recent downturn in the stock market reflects legitimate concerns about tightning credit conditions. However, as noted earlier this week, we are maintaining our Neutral view as there is no indication yet that the base fundamentals have changed significantly.
--Richard Jahnke, Briefing.com

http://www.briefing.com/GeneralConte...terHoursReport