This Week in Stocks: 8/4 - 8/10/07

[Show-me]

The Week Ahead

Last Update: 03-Aug-07 10:34 ET


We're getting to the tail end of the second quarter reporting season. The number of companies scheduled to report their results is dwindling, and by the same token, so is the number of companies that have market-moving capability.

Cisco (CSCO), which is a suggested holding in our Active Portfolio and reports after Tuesday's close, is the headliner in the coming week.

While the Cisco report will be closely watched, the FOMC meeting on Tuesday is the key event of the week. The FOMC is not expected to cut rates, but in light of the fallout related to credit concerns, the market will be anxiously awaiting the wording of the Fed's policy directive.

For the full rundown of companies due to report, be sure to check our Earnings Calendar. Separately, the Economic Calendar contains the relevant background information for all of the incoming economic data.
________________________________________________________________
Monday, August 6:

• Earnings: Cooper Tire (CTB); BMC Software (BMC); Wynn Resorts (WYNN)
• Economic Data: None
• Events: None
• Fed Speakers: None

Tuesday, August 7:

• Earnings: Church & Dwight (CHD); Dean Foods (DF); Duke Energy (DUK); Interpublic (IPG); Marsh McLennan (MMC); Molson Coors (TAP); Playboy (PLA); Tenet Healthcare (THC); Tesoro (TSO); Tyco (TYC); Cisco (CSCO); Fluor (FLR); Papa John's (PZZA); priceline.com (PCLN); Service Corp. (SCI); Time Warner Telecom (TWTC)
• Economic Data: Q2 Productivity
• Events: None
• Fed Speakers: FOMC Policy Decision

Wednesday, Aug. 8:

• Earnings: Barr Pharma (BRL); Cablevision (CVC); Foster Wheeler (FWLT); Hansen Natural (HANS); Jack In The Box (JBX); Polo Ralph Lauren (RL); Sprint Nextel (S); Advance Auto (AAP); Career Education (CECO);
• Economic Data: Wholesale Inventories
• Events: Dept. of Energy Inventory Report
• Fed Speakers: Minneapolis Fed President Stern on economic education and policy making

Thursday, Aug. 9:

• Earnings: Brinker (EAT); Cardinal Health (CAH); Diebold (DBD); DirecTV (DTV); Urban Outfitters (URBN); California Pizza (CPKI); Lions Gate (LGF); NVIDIA (NVDA)
• Economic Data: Initial Claims
• Events: Same-Store Sales
• Fed Speakers: Minneapolis Fed President Stern on economic education and policy making

Friday, Aug. 10:

• Earnings: EchoStar (DISH)
• Economic Data: Export and Import Prices; Treasury Budget
• Events: None
• Fed Speakers: None

http://www.briefing.com/GeneralCont...vestor&ArticleId=NS20070803103459LookingAhead

 

[Show-me]

What a week! After the flush Friday I think I'm getting a bit more defensive. Going to sell my EWJ Monday. It has almost hit the "stop" and it has broke support.

Thinking of selling USO also. Made some good gains on that one but it is a ETF and not directly in sync with crude.

Here is the weekly video from the Nightly Business Reports Market Monitor.

http://www.pbs.org/nbr/wrapper/marketmonitor.html

 

[Show-me]

Bear Stearns to fire top trader: reports
Bank attempts to reassure investors that it can weather storm

By Murray Coleman & Alistair Barr, MarketWatch
Last Update: 11:35 AM ET Aug 4, 2007

SAN FRANCISCO (MarketWatch) -- Bear Stearns appears ready to fire its high-flying chief of stock and bond trading, considered a leading candidate for the top job at the bank, as it uncoils from the staggering downturn in the credit markets, according to published reports.
The Wall Street Journal, citing an unnamed source, reported Saturday that the securities firm's board will meet on Monday to discuss the exit of Warren Spector, who oversees Bear's entire capital markets business.
The New York Post in its Saturday edition quoted an insider, reportedly briefed about the firing, who said: "Warren never got out in front of this - in fact, it got worse on a daily basis and eventually put the firm at risk."
Spector, 49, has spent his entire career at Bear, earning a reputation as a savvy mortgage-bond trader. But his future took a dramatic turn in late spring when the prices on mortgage-related securities began dropping rapidly, leading to the demise of the High-Grade Structured Credit Strategies Fund and a more leveraged sister fund at Bear Stearns.

http://www.marketwatch.com/news/sto...9A5-CF97-4D79-9E9D-A9B91E7A3C99}&siteid=yhoof

 

[James48843]

What a frigging bloody two weeks here!

Just when I thought things were about to calm down, that the volitility was soothing down, and that the market was ready to p[op northward once again, we get slammed again on Friday.

OUCH. That smarts.

I'm starting to think this is a fundemental sea change, not just the pause that refreshes.

One theory- the minimum wage.

Could it be that the increase in the minimum wage is having this affect on the markets in general, sending them all down?

I don't know.

But what I DO know is that this week's friday blowout was NOT what I was expecting, and that Friday closed on an accelerating down trend.

Not good.

 

[Show-me]

But what I DO know is that this week's friday blowout was NOT what I was expecting, and that Friday closed on an accelerating down trend.

Not good.

That seem like the "big boyz" were jumping ship at the last minute leaving the dumb money holding the bag.

 

[Show-me]

AP
American Home Mortgage Files Chapter 11
Monday August 6, 8:15 am ET American Home Mortgage Files for Chapter 11 Bankruptcy Protection

NEW YORK (AP) -- American Home Mortgage Corp. filed for bankruptcy protection on Monday, the latest casualty of a mortgage industry that has plunged into distress.

The Melville, N.Y.-based mortgage lender asked a court in Wilmington, Del. for Chapter 11 bankruptcy protection from its lenders.

The filing follows a week of turmoil for the 10th-biggest U.S. home lender. Ten days ago, American Home Mortgage froze the 70 cent-per-share dividend scheduled to be paid that day.

Last week, American Home Mortgage said many of its lenders wanted their money back, and said it was unable to deliver as much as $800 million for mortgage loans promised to home buyers.

The company said late last week it planned to lay off almost 90 percent of its 7,000 employees.

The stock market had already anticipated that the company was likely to go bankrupt. The company's shares, which closed 2006 at more than $35, tumbled to 69 cents on Friday. In premarket trading Monday, the stock fell 20 cents, or 28.1 percent, to 50 cents.

American Home Mortgage's 40 biggest creditors include virtually all of Wall Street. The company's three biggest creditors are Deutsche Bank AG, Wilmington Trust Co., and JPMorgan Chase & Co. The company hired the law firm Young Conaway Stargatt & Taylor LLP as general bankruptcy counsel. American Home Mortgage also hired Stephen F. Cooper to be chief restructuring officer. Cooper was also chief restructuring officer for Enron Corp.

 

[clester]

Looks like a good start. No black Monday yet. What to do ahead of the fed...
Will we sell of after the Fed?

 

[weatherweenie]

Looks like a good start. No black Monday yet. What to do ahead of the fed...
Will we sell of after the Fed?

Dead cat bounce?

Tuesdays continue to be pretty bad, don't they?

 

[clester]

Dead cat bounce?

Tuesdays continue to be pretty bad, don't they?

Good point! I hate Tuesdays.

 

[Show-me]

I believe the Fed will be very careful with their statement, but the market has the jitters and will read into it to much.

 

[tsptalk]

It's so tempting to jump in on the weakness, especially when we see signs of life in the indices as we are seeing today. I believe this could be a time to buy - only if - you are looking out 3, 6, or 12 months, but if you are a short-term trader (days/weeks) you should use these rallies to lighten up. This correction isn't over. Too much technical damage. If the Fed doesn't satisfy we'll turn right back down, imho.

In '98, the Fed cut rates at an FOMC meeting during the Russian currency crisis that started to affect hedge funds, and the market went right down. It wasn't until the 2nd surprise rate cut that the market perked up for good.

 

[Bullitt]

Totally. Looking at the big picture, the charts are still a nightmare. This is the work of a short squeeze and a few hedge funds looking to make a quick buck gambling on the Fed decision tomorrow. Fed's gonna have to really watch their wording because tomorrow is going to be a very emotional day. It is a long term buyers market though.

 

[clester]

Did we just see buy the rumor? and will we sell the news tomorrow? What an interesting day.

 

[fedgolfer]

http://www.federalreserve.gov/boarddocs/press/monetary/2007/20070807/

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth was moderate during the first half of the year. Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy.

Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.

Although the downside risks to growth have increased somewhat, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Michael H. Moskow; William Poole; Eric Rosengren; and Kevin M. Warsh.

 

[fedgolfer]

I was expecting a lot more. We'll probably see more action when the minutes get released. Seems like Ben is sidestepping and letting the data as it comes in to do the talking. My guess is we'll stay in the downward channel until data proves otherwise?

 

[Show-me]

AP
Wall Street Advances After Cisco Report
Wednesday August 8, 10:23 am ET
By Madlen Read, AP Business Writer Wall Street Rises on Cisco Earnings, Ongoing Relief Over Fed Statement

NEW YORK (AP) -- Stocks advanced Wednesday as investors, relieved that the Federal Reserve still predicts moderate economic growth despite credit concerns, reacted warmly to solid results from Cisco Systems Inc.

The computer network equipment maker said profit jumped 25 percent in its fiscal fourth quarter and raised its revenue forecast for fiscal 2008. Meanwhile, wireless provider Sprint Nextel Corp. posted a steep decline in its second-quarter profit, but the results beat Street expectations and the company said its subscriber base rose by 400,000 to 54 million customers during the quarter.

The upbeat news in the technology sector gave investors another reason to buy back into the stock market -- a day after the Federal Reserve said despite an increasingly difficult credit environment, the economy should keep growing moderately. It said again that inflation remains its primary concern.

The housing market is still weak. Toll Brothers Inc.'s preliminary measure of fiscal third-quarter revenue showed home building revenue fell 21 percent. However, the company's chief executive said he sees housing demand increasing, and the quarterly revenue estimate of $1.21 billion was better than analysts expected.

The Dow Jones industrial average rose 58.69, or 0.43 percent, to 13,562.99, while the Standard & Poor's 500 index rose 10.94, or 0.74 percent, to 1,487.65.

The Nasdaq composite index gained 33.63, or 1.31 percent, to 2,595.23.

The Russell 2000 index of smaller companies rose sharply, gaining 18.28, or 2.36 percent, to 792.41.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.82 percent from 4.77 percent on Tuesday.

The technology-dominated Nasdaq was helped by a stronger-than-expected second-quarter profit at Priceline.com Inc. The online travel agent's stock surged $13.46, or 21 percent, to $78.55.

After releasing their quarterly results, Cisco rose $1.39, or 4.7 percent, to $31.08, and Sprint rose 34 cents to $20.56. Toll Brothers rose 90 cents, or 3.9 percent, to $23.85.

The dollar fell against the euro and British pound, but rose against the yen. Gold prices fell.

Crude oil prices dipped 32 cents to $72.10 a barrel ahead of Wednesday's government report on petroleum inventories. Market analysts expect to see a draw on oil stockpiles, as refineries are expected to boost their gasoline output.

Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 320.6 million shares.

Overseas, Japan's Nikkei stock average rose 0.64 percent. London's FTSE 100 gained 0.59 percent, Germany's DAX index rose 0.76 percent, and France's CAC-40 climbed 1.29 percent.

 

[FUTURESTRADER]

this pop is looking a little too exhuberant, unless some serious short covering goin on? $DWCP = +2.37%!!??

 

[Show-me]

this pop is looking a little too exhuberant, unless some serious short covering goin on? $DWCP = +2.37%!!??

Yes, I am concerned too. I want to let the rally run, but this is to fast IMO. There really is no show stopping news to support this big rally. More of the same.

Fed is holding and watching.

Sub-prime loan crisis is on going.

Earnings are OK, but not record breakers like before.

Oil is down a bit, but one geopolitical or nature disaster hiccup and it will shoot it to the moon.

I'm thinking a retest of the 200 dma, but I do not have a handle on how I want to allocate. Part of me wants to let it run. The other part sez go G and buy back lower if you think it will retest.

 

[Mike]

The S&P shed about 25 points in an hour (nearly all of the day's gains)... where the heck did that come from?

 

[Birchtree]

It came from hedge fund trading desk rumor that GS was going to make an after market announcement - later denied.