Thread: This Month in Stocks: 12/1 - 12/28/07

Third test of the 200 dma in four weeks.

http://stockcharts.com/h-sc/ui?s=$SP...d=p52296275881

Isn't the third time often the charm? It looked like 1490 served as support from 10/22 to 11/5, but then on the third test (or fourth--depending on how you look at it) on 11/7, it broke through. I think we're going to break through the 1490 resistance this week and go higher. The corresponding mark on the Nasdaq looks like 2700.

Yes, three times is a charm and that 200 dma should be getting weaker. I was hopeing for a retest of the low and then a rocket ride thru it. I may be out of sync.

AP
Five-Year Mortgage Rate Freeze Looms
Wednesday December 5, 3:40 pm ET
By Martin Crutsinger and Alan Zibel, Associated Press Writers

Bush Mortgage Plan Will Freeze Certain Subprime Interest Rates for 5 Years

WASHINGTON (AP) -- The Bush administration has hammered out an agreement with industry to freeze interest rates for certain subprime mortgages for five years in an effort to combat a soaring tide of foreclosures, congressional aides said Wednesday.

The administration said that President Bush will speak on the agreement at the White House on Thursday and the Treasury Department announced that Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson would hold a joint news conference Thursday afternoon with officials of the mortgage industry.

http://biz.yahoo.com/ap/071205/mortgage_crisis.html

AP
Retailers Post Sluggish November Sales
Thursday December 6, 8:06 am ET
By Anne D'Innocenzio, AP Business Writer Retailers Post Sluggish Sales in November Despite Strong Start to the Holiday Season

NEW YORK (AP) -- The holiday shopping season got off to an uncertain start despite a big Thanksgiving weekend as consumers took advantage of big discounts and then pulled back, leaving retailers with sluggish sales results for November.

As retailers reported their sales results Thursday morning, Costco Wholesale Corp. proved to be a big winner, but plenty of stores including Limited Brands Inc. and teen retailer Wet Seal Inc. had disappointing results. Wal-Mart Stores Inc. beat expectations.

"It's still early, but it looks like that while Black Friday was strong, the follow-through the following week doesn't appear strong," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Consumers are still facing the same old economic headwinds."

According to a tally by Thomson Financial, only four merchants beat sales estimates, while 15 missed expectations. The tally is based on same-store sales or sales at stores opened at least a year. Same-store sales are a key indicator of a retailer's health.

Wal-Mart said its same-store sales rose 1.5 percent in November, beating the 1.2 percent estimate of analysts polled by Thomson Financial.
Costco reported same-store sales rose 9 percent in the November period, fed by double-digit growth in its international segment. Analysts expected a 6.6 percent gain

Limited had a 7 percent decline in same-store sales, worse than the 5 percent analysts projected.

Pacific Sunwear of California Inc. had a same-store sales increase of 2.3 percent, a bit below the 2.8 percent projection. Wet Seal's same-store sales declined 1.7 percent, better than the 5.3 percent forecast

Huge week for stocks coming up. The big question will be, can they hold on to the recent gains with the obvious "sell the news" potential after the Fed Tuesday?

The 10-day MA of the OEX put/call ratio tells me yes. The new sentiment survey says maybe not.

Gary Smith (technician on Real Money and Bulls and Bears on Fox) is looking for a 5% drop after the Fed, while other well respected analysts are saying we rally thru the end of the year.

Since we are still technically able to trade for now, I may sell Tuesday and buy back after any dip. But this is where I used to get myself in trouble. When I'd miss a rally I tend to sit on the sidelines too long... waiting for a retest of a low, etc. That didn't work from 2003 to early 2007, but with volatility remaining high, patience may pay off again for anyone on the sidelines.

There is still a gap to be filled on the downside, sentiment seems to have risen too quickly, and some are suspicious of the band-aid put on the subprime problem.

Tough call.

I'm thinking there is eventually going to be some pattern of statistical relevance associated with the double-bottom 10% blink and you missed them corrections. Those shake outs were brutal and now the market may be prepared for a massive move up - no side lines for me.

http://biz.yahoo.com/ap/071210/switzerland_ubs.html

AP
UBS Writes Down $10B From Subprime Losses
Monday December 10, 6:26 am ET UBS Writes Down $10 Billion From Subprime Losses; Will Record a Shareholder Loss for Year

ZURICH, Switzerland (AP) -- Swiss banking giant UBS AG said Monday it will write off a further $10 billion on losses in the U.S. subprime lending market.

UBS will now record a loss for the fourth quarter and a net loss attributable to shareholders for the full year, the bank said.

The bank will borrow around 13 billion Swiss francs ($11.51 billion) from outside investors, sell treasury shares and replace its 2007 cash dividend to shareholders with a stock dividend, bringing in a total of 19.4 billion francs ($17.18 billion) to shore up its capital base, UBS said.

As recently as the middle of November, UBS had predicted a profit for the fourth quarter despite ongoing speculation about its subprime holdings.
"Conditions in the U.S mortgage and housing markets have continued to deteriorate, and we have updated our loss assumptions to the levels implied by the current distressed market for mortgage securities," the company's chief executive, Marcel Rohner, said in a statement.

"In our judgment these writedowns will create maximum clarity on this issue and will have the effect of substantially eliminating speculation," he added.

In October the bank downgraded the value of some assets by over 4 billion francs ($3.4 billion) because of losses linked to the U.S. mortgage crisis.

The writedown meant UBS posted a net loss of 830 million francs ($712 million) in the period ending Sept. 30, the first quarter in nine years in which it suffered an operating loss. UBS shares gained 2.4 percent to 58.55 francs ($51.90) in Zurich.

http://www.bloomberg.com/apps/news?p...bYZCQ&refer=us

Washington Mutual to Take Writedown, Slash Dividend (Update2)

By Elizabeth Hester

Dec. 10 (Bloomberg) -- Washington Mutual Inc., the biggest U.S. savings and loan, will write down the value of its home lending unit by $1.6 billion in the fourth quarter and cut about 6 percent of its workforce as mortgage-market losses increase.

Washington Mutual, led by Chief Executive Officer Kerry Killinger, also slashed its quarterly dividend to 15 cents a share from 56 cents and forecast a loss for the quarter, according to a statement today from the Seattle-based bank. Provisions for loan losses will be $1.5 billion to $1.6 billion, more than the $1.3 billion the company previously predicted. It plans to shutter 190 of 336 home loan centers.

The bank has lost 56 percent of its value this year, the worst performance in the 24-member KBW Bank index, amid declining U.S. housing prices and record mortgage delinquencies. Rival Countrywide Financial Corp., which has dropped 71 percent, moved to bolster its finances in August by selling $2 billion in preferred stock to Bank of America Corp. Washington Mutual, known as WaMu, said today it will sell $2.5 billion of convertible stock.

``They're clearly concerned the industry will stay in a negative mode for an extended period,'' said Richard Bove, an analyst at Punk Ziegel & Co. in Lutz, Florida. ``The fact they're laying off so many people indicates they're concerned this is not just a one-time event.'' He rates the stock ``market perform.''

2010 Recovery

Fitch Ratings downgraded the firm's credit rating to ``A-'' from ``A,'' citing ``worsening asset quality,'' and ``extremely challenging conditions in the U.S. residential mortgage market.'' Moody's Investors Service Inc. also cut its rating.

``Credit losses from WaMu's mortgage operations will be noticeably higher than previously estimated,'' and the company's profitability won't ``begin to recover'' until 2010, Moody's said in a statement.

AP
H&R Block 2Q Losses Soar
Tuesday December 11, 7:24 am ET H&R Block 2Q Loss Soars on Mortgage Meltdown; Final Results Delayed Until Friday

KANSAS CITY, Mo. (AP) -- H&R Block Inc., the nation's largest tax preparer, said in a preliminary earnings report Tuesday that it expected a huge second-quarter loss as it continued to wrestle with its disintegrating mortgage arm.

The company said it was filing its quarterly report late, blaming the decision earlier this fall to change accounting firms.

But it said it expected a net loss of $502.3 million, or $1.55 per share, for the quarter ending Oct. 31, compared with a loss of $156.5 million, or 49 cents per share, during the same period a year ago.

Of that loss, $366.2 million, or $1.13 per share, came from discontinued operations, including much of its Option One Mortgage Corp., which has suffered as an increase in borrower defaults and a drying up of credit markets caused dozens of lenders to disappear.

http://biz.yahoo.com/ap/071211/earns_h_r_block.html

http://money.cnn.com/2007/12/11/news...poll/index.htm

Americans split on mortgage bailout

Only a slight majority of Americans want to see special treatment for those at risk of default; most blame borrowers for woes.

By Chris Isidore, CNNMoney.com senior writer
December 11 2007: 6:19 AM EST


Americans are nearly evenly divided on who is to blame, and what should be done, for millions of home borrowers at risk of losing their home from the current mortgage crisis.

NEW YORK (CNNMoney.com) -- Americans are nearly equally divided on whether those facing defaults on their mortgages should get special help, with most believing the borrowers are to blame for their own problems.
A poll conducted for CNN by Opinion Research Corp. found that 51 percent of Americans surveyed believed that those at risk of defaulting on their mortgages and losing their homes "should receive special treatment." But 46 percent said there should not be any special treatment afforded to those in trouble.

In addition, when asked which statement comes closer to their feelings on the topic, 51 percent agreed they felt sorry for those whose homes are at risk, but that those borrowers willingly entered into those agreements and have no one to blame but themselves. The survey found 46 percent agreed that they think the borrowers are the victims of bad lending policies by the banks who provided mortgages to them.