Thread: Market News

Briefing.com
10:05 am : Stocks extend their gains with all ten economic sectors in positive territory. Just reported, November pending home sales fell 2.6%, compared to the expected decline of 0.7%. The prior reading was revised up to 3.7% from a gain of 0.6%, which is offsetting some of the disappointment in November's weaker than expected sales.

Boston Fed President Rosengren said if forecasts are correct, the U.S. will have the longest housing investment decline in 50 years.

Briefing.com
The small-cap Russell 2000 Index was outperforming its large-cap counterparts earlier in the day, but is now underperforming after renewed credit concerns took a toll. Mid-cap stocks are also underperforming.

Goldman Sachs said the U.S. is probably slipping into recession, according to Bloomberg.

08:59 am : S&P futures vs fair value: -2.3. Nasdaq futures vs fair value: -1.0. Futures shed a few points and now point to a slightly lower open. Fitch Ratings said it would affirm MBIA’s credit rating if its $1 billion offering is successful, according to Dow Jones, the stock is set to open higher. Dow Component Alcoa (AA) marks the start of earnings season with its report after the close. Crude (-0.2% to $96.12) is trading slightly lower ahead of the government’s weekly energy inventory report at 10:30 ET.

Briefing.com:
St. Louis Fed President Poole painted a more positive picture after he said U.S. economic fundamentals remain strong and 2008 looks to be a year of rising growth. He also noted it is too early to tell if housing problems will push the economy into a recession. He said low inflation expectations give the Fed "breathing room," indicating the Fed may cut interest rates further. He believes it would be a mistake to say that a recession is clearly at hand. Poole is not a voting FOMC member in 2008, but was in 2007.

Doug Kass (The Street) says that the Fed will be easing rates "momentarily".

http://www.thestreet.com/s/kass-fed-...ml?puc=_tsccom

[BRIEFING.COM] S&P futures vs fair value: -9.4. Nasdaq futures vs fair value: -17.3. Futures drift lower despite a better than expected initial claims report. Initial jobless claims for the week ended Jan 5 came in at 322K, lower than the expected reading of 340K. The market will be paying close attention to Ben Bernanke’s speech on the economic outlook at 13:00 ET. Market participants are hoping to get some clues about future Fed policy. Fed funds futures suggest a 26% chance of a 50 basis point rate cut with the rest of the bets on a 25 basis point cut.

[BRIEFING.COM] S&P futures vs fair value: -10.5. Nasdaq futures vs fair value: -19.8. The market is poised for a weak start. Overall, December same-store sales have been worse than expected, although the largest retailers posted better than expected numbers. There positive surprises include sales that topped estimates at Wal-Mart (WMT) and Costco (COST). Retailers are down 8.5% in 2008.

Federal Reserve Chairman Ben Bernanke pledged Thursday to slash interest rates yet again to prevent housing and credit problems from plunging the country into a recession.

http://biz.yahoo.com/ap/080110/bernanke.html

Briefing.com: Bernanke said additional policy easing may well be necessary, and that the Fed stands ready to take "substantive additional action." These headlines hit before Bernanke's scheduled speech at 1:00 ET. The comments are likely from a prepared text, pre-released to Bloomberg.
The Bernanke statements suggest further Fed easing is very likely, causing the dollar to slide. Meanwhile, gold made a fresh intraday high of $893.60 per ounce.
Separately, National Bureau of Economic Research President Martin Feldstein said a U.S. recession is “not a sure thing,” but the odds are now over 50%, according to Reuters.