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Wednesday’s Market Recap (11/19/08)

Posted on: November 20, 2008 - Email Article - Printable Version

Hassan Chaudhry

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Today’s session ends with record lows across the street. As new data poured out and the fate of automakers still a mystery, markets witnessed large chunks of selling. The Dow finished below 8000, after falling 5.07%. This will mark the first time the Dow has hit the mark since 2002. The S&P 500 closed at just above 800 points and lost 6.11% on the day. The Nasdaq proved to be the biggest loser finishing off at 1386 points and falling 6.53%.

The Federal Reserve may have had something to do with the day’s trading after it announced a forecast of lower economic activity, additional rate cuts, and higher unemployment for the next year. The Fed predicts next year jobless rates to range anywhere from 7.1% and 7.6%. Inflation is projected to decrease to lower levels due to the slump of commodity prices and a stronger dollar.

Core consumer prices declined at a record amount of 1% during the month of October, specifically hurting the housing, auto and retailing sectors. Home construction in the US also fell to 791,00 units, which are record lows not seen since 1959.

US crude is now at $53.62, a price that hasn’t been seen since the beginning of 2007. Crude supplies were originally expected to increase by 1.2 million barrels, but instead rose by 1.6 million barrels. Longer term projections are now hinting $40, after a summer where some believed oil to be at $200.

Financial took a royal beating today as Citigroup [C: 7.08, -0.06 (-0.84%)] and Bank of America [BAC: 13.98, -0.35 (-2.44%)] led the downward charge. After Wednesday, U.S. Bancorp becomes larger than Citigroup according to market value.

BJ’s Wholesale [BJ: 34.03, +0.52 (+1.55%)] saw profits rise by 24% and raised full year outlook. Yet, they also saw a dip in their stock price on the day.

Boeing [BA: 46.17, +0.92 (+2.03%)] announced that they would be making cuts in their defense unit of about 800 workers, which is nearly a quarter of the staff. This comes after a delay of the U.S. Air Force tanker replacement program and the completion of other projects.

Molson Coors [TAP: 48.44, -1.08 (-2.18%)] was one of the few stocks that saw a rise after announcing a $0.20 cent dividend, and that Vice Chairman Pete Coors will take the Chairman position when Eric Molson Steps down in 2009.