Reply by Rachel/ORWA on 1/8/08 1:04pm
Msg #229556
Dow Jones article, posted 6 minutes ago, FWIW
MARKET SNAPSHOT: U.S. Stocks Trim Slide As Countrywide Denies Bankruptcy Talk
6 minutes ago - Dow Jones News
By Kate Gibson
U.S. stocks attempted Tuesday afternoon to reignite an earlier advance after Countrywide Financial Corp. reportedly denied bankruptcy rumors after it was said to have had fabricated documents.
"The rumor is that the mortgage lender will announce something this week. However, the company is out with comments this afternoon saying that there is no substance to the rumor," said Frederic Ruffy, an analyst for Optionetics.
Off nearly 90 points from its highs of the day, the Dow Jones Industrial Average (DJI) was down 18.9 points in early afternoon trade to 12,809.6, with 15 of its 30 components in the red.
Financials fronted the blue-chip decline, with American Express Co. (AXP) down 1.2%, Citigroup Inc. (C), off 2.9%, and J.P. Morgan Chase (JPM), falling 2.6%.
"The financials are dragging everything down. This is the largest mortgage originator in the country, trading like it wants to go out of business," said Peter Boockvar, equity strategist at Miller Tabak.
Other blue-chip losses included shares of Microsoft Corp. (MSFT), off 1.2%, after the technology giant's announcement it would pay $1.2 billion to acquire Norwegian software developer Fast Search & Transfer. .
Broader indexes fell as well. The S&P 500 (SPX) fell 0.31 points to 1,415.87. The technology-laden Nasdaq Composite (RIXF), which lost ground the previous seven sessions, was down 0.15 points to 2,499.31.
"We started out with a rally in tech, and (an apparent) reversal of concern over economic growth, but at midday we're once again in a defensive position," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
Countrywide trouble
Shares of Countrywide (CFC) were down 15.1% in the wake of a New York Times story detailing the company's alleged role in the bankruptcy case of a homeowner in Pennsylvania.
On the New York Mercantile Exchange, crude-oil futures were up $1.96 to $97.05 a barrel. .
Elsewhere on the Nymex, gold futures surged to a new all-time high, with the contract for February delivery hitting $884 an ounce in electronic trade. .
Earlier on, equities investors paid little heed to the National Association of Realtors' report that pending home sales fell 2.6% in November and were down 19.2% in the past year. .
"Everybody has already written off the first quarter in terms of home sales and housing numbers. Nobody is giving the first quarter a chance for a turnaround anyway," said Marc Pado, U.S. strategist at Cantor Fitzgerald.
Volume on the New York Stock Exchange neared 703 million shares, and advancing stocks ran ahead of those declining 8 to 7. On the Nasdaq, more than 1.1 billion shares traded, and decliners outpaced advancing issues 7 to 6.
Active issues
Shares of Bear Stearns (BSC) edged 1.9% lower following reports that James Cayne would relinquish his chief executive's post but remain as chairman in the wake of losses and a distressed share price. .
The Wall Street Journal reported another management reshuffle at Barclays PLC (BCS) as the bank tries to recover from mortgage-related write-downs. Grant Kvalheim, a co-president of Barclays' investment-banking unit, is reportedly leaving.
Hit hard of late, shares of Starbucks (SBUX) rallied, gaining 10% after the coffee chain said former chief Howard Schultz would take the helm again at a time when Starbucks is facing slower traffic at U.S. stores. .
Ahead of the opening bell, KB Home (KBH) reported fourth-quarter losses of about $773 million. Its stock fell 6.1%. .
In a speech early Tuesday, Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said further cuts in interest rates probably won't be needed to heal the national economy. .
Cantor Fitzgerald's Pado, however, said another Fed rate cut is expected when central bankers meet later in the month.
"The Fed has got to move, and good, bad or neutral housing numbers aren't going to impact that; there's a chance for a 50 basis point move at the end of January," said Pado.
Overseas, Asian shares were mixed, with Tokyo ending ahead and Hong Kong falling. .
In London, defensive stocks rallied. .
> Dow Jones Newswires
01-08-08 1354ET
Copyright (c) 2008 Dow Jones & Company, Inc.
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