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Wednesday’s Market Recap (10/22/2008)

Posted on: October 22, 2008 - Email Article - Printable Version

Derek Stevens

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The U.S. stock market experienced another sell-off today, as the economic outlook for the U.S. remains dismal. With falling oil prices, corporate earnings forecasts, and a stronger dollar, the market appears as if it hasn’t hit the bottom yet. The S&P fell 6.10%, while the Nasdaq dropped 4.77%. The Dow fell more than 500 points today, or 5.69%, and closed at 8,519.

Major indices around the world also took hits on a worsening global economy. In England, the FTSE closed 4.46% lower, while the CAC 40 and the DAX dropped 4.46%, and 5.10% respectively. Banks and commodities both experienced the largest declines in Europe. In Asia, the Hang Seng fell 5.15%, the Nikkei 6.8%, and the Straits Times 5.19%. The yen had a huge gain on the dollar today and helped drive stocks lower.

Sweet crude oil tanked once again on Wednesday due to the report by the Energy Information Administration, or EIA, that mentioned higher supply than the consensus forecast. This week’s supply of crude was up 3.2 million barrels, versus the 2.3 million expected. Gasoline beat the estimates by 0.6 million barrels, while distillates were up 2 million barrels over the estimates. Crude fell almost 7% during the trading hours today, settling at a price of $67.14. Gold prices fell like every other commodity today and traded down 4.3% on the day. Future contracts for gold that expire in October were trading at $733.00.

The dollar strengthened against the Canadian dollar, which fell over 190 pips during trading hours today. The dollar also increased in value in comparison to the Euro, and is trading at $0.7778. The yen made strong gains versus the dollar today as the dollar dropped to 97.865 yen per dollar. The British pound is trading at a 5-year low against the dollar, and is worth $0.6147.

Amazon [AMZN: 54.06, 0.00 (0.00%)] beat third quarter earnings estimates by $0.02, as revenue increased 30.7% from 2007 third quarter earnings. Analysts predicted earnings per share to be $0.25. Like many other companies, Amazon lowered their fourth quarter and annual estimates.

Google [GOOG: 328.05, 0.00 (0.00%)] announced they will not be taking a cut of the profits generated in the Android market, a market where developers sell their applications to hand-held device owners. T-mobile’s G1 is the first Android-powered phone.

Amgen [AMGN: 59.65, 0.00 (0.00%)] posted earnings of $1.23 per share this quarter, up from the forecasted earnings of $1.08 per share. Revenue increased 7%.

That’s all for today, catch me tomorrow, same time, same place, for the Bullish Banker’s Daily Market Recap.

-Derek Stevens

Disclosure: The fund the author is associated with has a long position in GOOG.

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