Monday
Weakness in financial and technology stocks weighed on the market Monday despite a higher opening following a series of takeover announcements.
TXU Corp. (TXU), the largest non-regulated retail electric provider in Texas, agreed to be acquired for nearly $32 billion, the largest private equity deal ever.
Station Casinos, Inc. (STN) rose 3.84% after announcing it had also agreed to go private.
Light sweet crude oil rose $0.87, to $61.39 per barrel. The DJIA fell 0.12% and the
NASDAQ fell 0.42%.
Tuesday
Equity markets ended sharply lower on Tuesday amidst weakness in the Asian markets, poor economic data, and increasing global tensions. In economic news,
durable goods orders fell 7.8% in January versus a consensus of a 3.0% decrease. In corporate news,
Apple, Inc. (AAPL) fell 5.32% after the company said it would delay its Apple TV device until mid-March. The
DJIA fell 3.29%, while the NASDAQ fell 3.86%.
Wednesday
Positive comments from Federal Reserve Chairman Ben Bernanke helped stocks recover on Wednesday. In economic news,
real GDP grew at an annual rate of 2.2% in the fourth quarter, slightly lower than the 2.3% estimates, and new home sales fell 16.6%. In corporate news,
Lockheed Martin (LMT) fell 0.30% after announcing a nearly $1 billion contract with the Department of Defense for continued development of the Aegis ballistic missile defense weapon system. Drug maker
Merck & Co., Inc. (MRK) moved higher after the company rose its 2007 earnings forecast from $2.51-$2.59 to $2.55-$2.65 per share. The
DJIA rose 0.43% and the NASDAQ rose 0.34%.
Thursday
Stocks finished down Thursday following a volatile day. In economic news,
initial jobless claims rose 7,000 to 338,000 versus a consensus estimate of 325,000. In corporate news,
Amgen Inc (AMGN) fell 3.98% after the firm disclosed it received an informal inquiry from the Securities and Exchange Commission seeking more information about a study of the company’s Aranesp anemia drug.
Constellation Brands, Inc. (STZ) fell after the beer, wine, and spirits company projected EPS for fiscal 2008 of $1.30-$1.40 versus estimates of $1.83. The
DJIA fell 0.28% and the NASDAQ fell 0.49%.
Continued concerns about global volatility drove stocks into negative territory on Friday. In economic news,
U.S. consumer confidence fell to 91.3 in February, below the 93.5 consensus. In corporate news,
American International Group (AIG) rose 3.16% after the company reported higher-than-expected fourth quarter net income and raised its stock repurchase plan and annual dividend. The
DJIA fell 0.98% while the NASDAQ fell 1.51%.
Summary
The long-awaited market sell-off arrived this week with the catalyst being the 8.8% drop in the Shanghai market Tuesday. Comments by former Federal Reserve Chairman Alan Greenspan suggesting a recession might develop in 2007 and weaker than expected economic data also contributed to the downturn. Despite the pessimism, the price/earnings multiple on the S&P 500 now sits at a reasonable 15.8.
For the week: The DJIA dropped 4.2% to 12,114, the NASDAQ fell 5.8% to 2,368, and the
S&P 500 fell 4.4% to 1387.
