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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Peter V who wrote (115639)	4/8/2008 3:02:39 PM
From: Peter V	Read Replies (1) \| Respond to of 306849

Wall St falls as Fed minutes, WaMu stir worries . Tuesday April 8, 2:54 pm ET By Kevin Plumberg NEW YORK (Reuters) - Stocks fell on Tuesday, led by financial shares after Washington Mutual Inc (NYSE:WM - News) said it was expecting a $1.1 billion quarterly loss and minutes from the Federal Reserve's latest meeting stoked fears about a recession. Shares of WaMu, the largest U.S. savings and loan, tumbled 10 percent after the company received a $7 billion capital infusion but said it was slashing its quarterly dividend to 1 cent per share from 15 cents and mortgage problems will lead to a $1.1 billion quarterly loss. The market extended its decline after minutes of the March 18 policy-setting meeting of the Fed showed a forecast for a contraction in the economy in the first half of the year as inflation increases. "The financial sector is hit by the news on Washington Mutual, but in the overall context of recent volatility this is a pretty mild setback relative to what we have seen in the last six months," said Charles Lieberman, chief investment officer of Advisors Capital Management, LLC in Paramus, New Jersey. "The market is through the worst of the crisis and will continue to see improvement although it obviously won't be a straight line." this is because a recession, which the market fears (see above), is GOOD for the financial sector??? The Dow Jones industrial average (DJI:^DJI - News) fell 70.02 points, or 0.56 percent, to 12,542.41. The Standard & Poor's 500 Index (^SPX - News) declined 10.12 points, or 0.74 percent, to 1,362.42. The Nasdaq Composite Index (Nasdaq:^IXIC - News) drop 23.03 points, or 0.97 percent, to 2,341.80. The S&P financial index (^GSPF - News) was down 1.66 percent. Broadly speaking, credit markets have stabilized since the Fed backed JPMorgan Chase's takeover of Bear Stearns and stepped up its efforts to increase liquidity in Wall Street. However, economic data and earnings results for companies such as semiconductor maker Advanced Micro Devices Inc (NYSE:AMD - News) and aluminum producer Alcoa Inc (NYSE:AA - News) continue to reflect a shaky foundation. A report by the National Association of Realtors showed pending sales of previously owned homes in February fell to the lowest level on records dating in 2001. The Dow Jones home construction index (DJI:^DJUSHB - News) fell 3.6 percent as shares of home builders such as D.R. Horton Inc (NYSE:DHI - News) slid. AMD, the second largest maker of computer processors, gave a first-quarter revenue estimate below expectations after Monday's market close and said it would cut 10 percent of its work force. Its stock was down 3.8 percent to $6.10. Shares of Novellus Systems Inc (NasdaqGS:NVLS - News), a semiconductor equipment maker, fell 8 percent to $21.90 after it said first-quarter earnings would be lower than expected and revenue would be at the low end of its forecast range. "Tech can't seem to get going," said Todd Leone, head of listed trading at Cowen & Co in New York. "The economy is a little weaker, there's talk of recession and some of the earnings numbers are a little weaker." Adding to the gloomy mood was Alcoa, which late on Monday posted a quarterly profit below analysts' estimates due to higher energy costs and the weak U.S. dollar. Alcoa was the first Dow company to report earnings for the latest quarter. Alcoa shares were down 1.6 percent to $36.85. The S&P 500 index began trading at its priciest level this year, about 14.05 times expected 12-month earnings. which makes perfect sense as we head into a recession, right?