From Briefing.com: 4:45 pm : Stocks got off to a positive start Thursday as central banks attempted to calm concerns in the banking system by infusing billions of dollars into the global financial system. The advance was countered with selling pressure that turned an early 2% Dow advance into a 1.4% midday loss. However, the combined influence of an announcement prohibiting short selling in the U.K. and reports Treasury is considering a plan to create a Resolution Trust-like operation as a solution to the financial crisis stimulated huge buying interest late in the day. The Dow finished with a 3.9% gain, near its session high.
Trading opened with all ten of the economic sectors advancing as investors were encouraged by efforts from central banks to increase liquidity and ease credit concerns. The Fed boosted its dollar swap line by adding as much as $180 billion to the line.
Stocks began surrendering gains as participants became unsure of how to proceed without a clear-cut leader in the early going. The major indices took out new 52-week lows, pushing the Dow more than 22% off its October high.
That sent investors back into safe havens like gold and Treasuries. At its session high, gold was up almost 9%. Treasuries traded higher, but saw gains reverse when financial stocks emerged to lead a massive recovery effort.
Financials have been plagued by uncertainty in recent sessions. Reports continue to speculate over the future of Morgan Stanley (MS 22.55, +0.80) and Washington Mutual (WM 2.99, +0.98). Various reports indicate the two are looking for buyers.
Consolidation is also taking place overseas. U.K. banking giant Lloyds TSB Group (LYG 21.35, +2.24) announced it is acquiring struggling U.K. mortgage lender HBOS in an all-stock deal valued at roughly $22.2 billion. The U.K. government brokered the deal, and is overriding anti-monopoly regulations, according to reports.
The financial sector was able to garner favor as word that the Financial Services Authority, the United Kingdom's independent financial regulator, issued a temporary ban on short selling financial companies. Meanwhile, the New York Attorney General said he wants to freeze short-selling in financial stocks, according to Dow Jones.
The sector was helped even more after reports surfaced that Treasury Secretary Paulson is talking about a Resolution Trust Corporation-type solution that would help end the current crisis.
Financials were down 6.2% at their low, but closed with a gain of 11.7%. Still, the heavy losses incurred earlier in the week have the sector looking at a 5.7% week-to-date decline.
The wide swings and heavy buying made for high volatility and high volume. The Volatility Index, VIX, was at a multiyear high of 40 before settling back near 33.
NYSE volume was just under 2.5 billion shares.
The significance of the Fed's actions and developments from the financial sector caused participants to generally overlook most other happenings.
FedEx (FDX 91.13, +3.06) posted in-line earnings results, bringing in $1.23 per share for its latest quarter. The firm also issued upside guidance.
After coming under pressure from the threat of a credit downgrade, Constellation Energy (CEG 24.20, -0.57) announced it will be acquired by MidAmerican Energy Holdings Company, a unit of Warren Buffett's Berkshire Hathaway, for $26.50 per share in cash.
Lastly, initial jobless claims for the week ended Sept. 13 increased 10,000 to 455,000 while the four-week moving average bumped up to 445,000 from 440,000. The weekly figure was above the consensus estimate of 440,000.
The four-week moving average sits roughly where it did in mid-August, but still reflects a soft labor market. DJ30 +410.03 NASDAQ +100.25 NQ100 +4.0% R2K +7.0% SP400 +4.9% SP500 +50.12 NASDAQ Adv/Vol/Dec 2114/3.85 bln/755 NYSE Adv/Vol/Dec 2395/2.45 bln/797
12:52PM Methode Electronics announces repurchase up to 3 mln shares; increases dividend to $0.07 (MEI) 8.56 -0.07 : Co announces that its Board of Directors has approved a 40 percent increase in the quarterly cash dividend on the Company's common stock from $0.05 to $0.07 per share. The Board of Directors has also authorized the Company to repurchase up to 3 million shares of its outstanding common stock through fiscal year-end 2010.
Briefing.com is not doing a great job of sharing free information right now. Thank goodness we can count on your tables Don! RtS |
