Market Recap for Tuesday January 22, 2008
To say that the table was set for an ugly day would be putting things nicely. Following yesterdays global sell-off in the face of a potential recession in the United States, the Fed had to do something. Pundits, experts, and talking heads were filling television screens by screaming for a rate cut, and good ol Ben Bernanke didnt disappoint. The first inter-meeting rate cut since September 17, 2001 helped provide a bit of a bounce, but the market spent all day wallowing in the red. The emergency rate cut followed Treasury Secretary Henry Paulsons plea for Congress to enact an economic stimulus plan. Earnings from Bank of America (BAC) didnt help the mornings jitters, although Dow component Johnson & Johnson (JNJ) topped the consensus estimate. Here is a look at how the trading day finished.
At the close, the Dow Jones Industrial Average (DJIA 11,971.2) settled slightly more than 128 points lower. Of the 30 components on the Dow, 8 managed to scrape their way into positive territory. Leading this group was Wal-Mart Stores (WMT), Home Depot (HD), J.P. Morgan (JPM), and Caterpillar (CAT). The laggards were paced by IBM (IBM), Merck (MRK), Procter & Gamble (PG), and Coca-Cola (KO). The Dow found a measure of support in the form of its 50-month moving average.
The S&P 500 Index (SPX 1,310.51) shed more than 14.5 points to round out the session perched slightly above the 1,300 level. The SPX pared its losses, as it stood more than 35 points lower at its intraday nadir. Finally, the Nasdaq Composite (COMP 2,292.3) fell nearly 48 points While the loss is nothing to discount, it could have been far worse, as the tech-rich sector was nearly 120 points in the red at its lowest point.
Turning to equities in focus, Housing-- including the likes of Pulte Homes (PHM), D.R. Horton (DHI), and Centex (CTX)-- defied the market and had a solid day PetMed Express (PETS) topped the consensus estimate with its third-quarter earnings report Cypress Semiconductor (CY) saw heavy call activity ahead of its earnings report and today's Quote of the Day comes from a fascinating article in The Wall Street Journalfocusing on the untimely (and unpublicized) demise of the Hydrox sandwich cookie:
"Eating Hydrox was 'a badge of honor,' says 54-year-old Charles Clark, who processes records for U.S. Army reservists in St. Louis. He remembers receiving a package of Hydrox cookies on his sixth birthday and sleeping with it under his pillow. 'Oreo had all the advertising, but those in the know ate Hydrox.'"
But these weren't the only headlines hitting the Street today. Click on the links below for our Daily Market Blog coverage of:
And, in case you missed it, Andrea Kramer took a look at different myths and facts about options in her latest Fundamentals of Trading video. Make sure to check it out.
While crude bounced back from its intraday lows, black gold still closed below the $90 level. The February crude contract slipped 72 cents to close at $89.85 per barrel. In the contracts time as a front-month contract, today saw futures hit their lowest level. The larger March contract slipped 0.8%, 71 cents, to settle at $89.21 per barrel. The intraday low was tagged during early-day electronic trading as the contract hit $85.42 per barrel.
Gold managed to gain ground today, thanks to weakness in the dollar following the mornings emergency rate cut issued by the Fed. When the closing bell sounded, the malleable metal advanced $8.60 to round the day out at $890.30 an ounce. The intraday nadir for gold stood at $849.50. Turning to silver, the March contract dropped 11 cents to $16.105 an ounce. March copper shed 3.80 cents to close the day at $3.1965 per pound.
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