US stocks drop sharply in the first session of September, despite favorable reports on the manufacturing and home fronts.
DJIA drops 186 (2%) to 9311, after rising as much as 62 early on. S&P 500 loses 23 (2.2%) to 998, Nasdaq Comp falls 40 (2%) to 1969.
Stocks weak most all day, led by financials, despite ISM’s report that manufacturing sector expanded for the first time since January ’08. Volume’s heavy, with composite volume on the NSYE of about 6.9 billion shares (and in the week before Labor Day, it shouldn’t be near that.)
It was a curious day. Futures pointed to losses to start the market, but indexes were rising into the 10 a.m. release of the ISM report, pending home sales and construction spending. It was almost as if something had been leaked.
So maybe the sky isn’t falling after all, (no matter what equities are saying.) Today’s breakdown focuses on the ISM and housing reports, as well as the mixed signals out of Europe, and eBay’s non-disastrous sale of Skype.
You know, this isn't a bad spot to lock in the old profits.
Get my broker. I need to unload something.
Isn’t it odd that stocks are selling off after investors get not just a so-called “second derivative” sign, but an actual, flesh-and-blood sign of an expanding economy, in today’s ISM manufacturing index.
It’s like, after six months of speculating about a recovery, now that they can taste it, all investors want to do it take profits out and call it a day.
But really it shouldn’t surprise anybody; some kind of a correction has been long overdue, especially in companies, like AIG, that have risen exponentially. AIG shares tripled in a month. Even healthy companies don’t see moon shots like that, and AIG is anything and everything but a healthy company.
Don’t go nuts staring at the calendar just yet. September, for now, is just another month.
DJIA down as much as 196 earlier, now down 168; S&P 500 down 20 at 1001, falling through support at 1014. Nasdaq Comp down 36. Financials are the big driver, with the KBW Bank index down 4.2%.
Light em up, boys. That Skype deal wasn't so bad after all.
Turns out EBay selling Skype wasn’t so bad, after all.
EBay said Tuesday it will sell a 65% stake of Skype to a group of investors led by Silver Lake Partners for $1.9 billion in cash and a $125 million note. The deal values Skype at $2.75 billion, a valuation that far exceeds what many analysts previously expected. Buyers also include a venture-capital firm led by Netscape co-founder Marc Andreessen and the Canada Pension Plan Investment Board.
The New York Times reported the news early Tuesday morning, but the initial report didn’t put a price tag on the deal. As a result, negative analysis ensued as some felt eBay wouldn’t be able to come anywhere close to the $3.1 billion it spent acquiring Skype in 2005.
Looks like US stocks will get out of the gate slowly here at the start of September, after equities extended their winning streak in August, and as investors will no doubt be bombarded with references to last September (and that was our first.)
Big number on tap today (10 a.m.) is ISM’s manufacturing index for August, which is expected to show the sector expanded for the first time in more than a year (thanks, cash for clunkers!) Pending home sales, construction spending, auto sales also on tap.
Overseas, a disappointing PMI report out of the UK, and a less bullish than expected statement from Australia’s central bank are sapping enthusiasms.
S&P futures down 4.70, DJ down 46; ten-year up, yield at 3.39%.
There’s already been so many comments made about how awful September is as a month for equities that either it’s a fait accompli that we’ll see a big correction, or it’s a case of everybody thinking one thing, and the market doing something else.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
David Oreck, founder of a well-known maker of vacuums and air purifiers, says he’s upset his namesake company is in bankruptcy. He says Nashville, Tenn.-based Oreck Corp. was a perfectly profitable company when he sold his stake in it to a private equity firm in 2004. He blames the firm, New York-based American Securities Capital […]