Holiday Greetings From al Qaeda

Smartmoney.com ^ | 17 November 2003 | Igor Greenwald

[Grampa Dave]

Holiday Greetings From al Qaeda

By Igor Greenwald November 17, 2003

VIOLENCE OVERSEAS and heavy losses in foreign markets supplied all the excuses Wall Street needed to address homegrown valuation worries Monday as a corrective phase set in.

Investors preoccupied with terror threats dumped stocks of every nationality overnight to protect handsome year-to-date gains.

But after sitting out much of the session, bargain hunters put in a late cameo appearance to lift the major U.S. averages well off their lows. The Dow finished 58 points lower at 9711, after trailing by more than 130 points in the middle of the afternoon. The Nasdaq slimmed down by 20 to 1910. The S&P 500 ducked 7 to 1043.

Techs, retailers, and airlines proved especially susceptible, though manufacturers and commodity suppliers fared little better. Suppliers of consumer and Pentagon staples played solid defense.

American Express (AXP1) was the leading blue-chip loser, its shares dropping 3%. Terror threats are never good news for a company heavily leveraged to travel spending. Amex didn't help its cause by unveiling a $1.8 billion convertible bond offering. The move tracks the accelerating pace of equity and debt issuance by firms seeking to take advantage of higher market prices while they last.

The urgency will not diminish any based on the overnight returns overseas. Tokyo stocks lost nearly 4% after al Qaeda threatened Japan and other key U.S. allies in the course of claiming responsibility for synagogue bombings that killed 23 people in Turkey on Saturday. Japanese banks paid an even higher price for signs of continued deterioration in their credit portfolios. Honk Kong stocks sank nearly 2% in sympathy.

Frankfurt shed more than 3% and Paris nearly as much, while London's main FTSE average declined more than 1% ahead of massive protests set to greet President Bush when he visits the British capital at mid-week.

Britain, Italy and Australia also received al Qaeda warnings. Further motivating the sellers was the October spike in U.S. wholesale prices, which sparked inflation worries and briefly brought the euro within a penny of an all-time high against the dollar.

Foreign markets were also following the example set by Friday's late sell-off on Wall Street. The terror threats overlapped with continued attacks in Iraq, where two U.S. helicopters crashed late Saturday, reportedly under hostile fire. Seventeen soldiers died in the single deadliest incident since the U.S. invasion.

Global security jitters overshadowed the latest merger, as St. Paul Cos. (SPC2) agreed to buy the larger property and casualty insurer Travelers (TAP.A3) for $16 billion in stock. The presumed economies of scale served as the main rationale for the deal, though the transaction also brings back into the fold St. Paul's boss, a Travelers alum who will run the combined business. Investors have balked at paying generous takeover premiums in recent weeks, but saw fewer risks in a merger in which the smaller of the two partners is acquiring the other at a slight discount. St. Paul's shares appreciated 3% on the news, while Travelers broke even on the session.

Home-improvement giant Lowe's (LOW4) slipped 1% despite topping profit estimates and boosting the annual forecast. Earnings grew 33% in a year's time thanks to a 12% surge in same-store sales. Investors worried that some of the gain came at the expense of rival Home Depot (HD5), which slid 2% ahead of its report on Tuesday.

"...American consumers remain committed to enhancing the enjoyment of their homes," chirped Lowe's boss. "That commitment is readily apparent in the results our stores have delivered this year."

American consumers also remain committed to buying toys; unfortunately for struggling retailer Toys 'R' Us (TOY6) they're increasingly likely to look for the best deals at Wal-Mart (WMT7). Toys 'R' Us shares slumped 12% after quarterly earnings fell shy of Wall Street's expectations.

The company sliced its annual operating profit forecast by up to 9%, or a dime a share. Needless to say, that doesn't include the upcoming $280 million pretax charge to close 182 stand-alone Kids 'R' Us and Imaginarium stores, curtailing the chain's unsuccessful forays into apparel retailing and the educational-toy segment. The company expects the move to save $8 million in 2004 and $20 million a year thereafter, meaning the one-time charge should pay for itself on a pre-tax basis in 15 years or so. Toys 'R' Us did not pay income tax in the most recent quarter, as its net loss swelled 36% in a year's time.

Morgan Stanley (MWD8) investors thought the big brokerage got off easy by agreeing to a $50 million settlement with the Securities and Exchange Commission in a sideshow to the mutual-fund trading scandal. The firm did not even have to admit (or deny) that it failed to inform clients about the compensation it received for selling them certain mutual funds. The stock held up much better than its sector or the market, moving marginally higher.

In contrast, Charles Schwab (SCH9) followed Friday's 8% plunge with a 4% drop as its own involvement in the scandal imperiled years of careful image-building.

Chip-equipment supplier Kulicke & Soffa (KLIC10) managed a 6% gain as an improved revenue outlook took the sting out of an unexpectedly wide loss.

But a strategic alliance between struggling server maker Sun Microsystems (SUNW11) and underdog chip maker Advanced Micro (AMD12) got shrugged off as a pact between strategic losers. Sun's shares slipped less than 1%, while AMD's weakened 3%.

Investors appear to be souring on stocks just as manufacturing sector turns the corner. The Empire State manufacturing index leapt to a record of 41 from October's upwardly revised reading of 34. "Conditions for New York manufacturers improved substantially in November," said the New York Federal Reserve Bank, which conducts the survey. "Respondents continued to be highly optimistic about future conditions."

Terror fears failed to push gold through the crucial $400-an-ounce barrier, the precious metal coming within 50 cents of that milestone before finishing down $6.50 at $391.50 an ounce on profit-taking .

Bonds had an easier time cashing in. The yield on the 10-year Treasury note fell to 4.19% from 4.22% late Friday.

[Grampa Dave]

When the market was swing up last week, I predicted that we would be reading and hearing about new tapes from al Qaeda, Ben Laden and $oddomite.

One can only wonder how much Soros pays for these monthly gloom and dooms to knock the world markets down and our markets down.

Of course as soon as they published overseas, Soros's paid stringers post the latest mythical tape story on FR. Then Soros's gloomers and doomers chime in warning us of the upcoming doom.

[Grampa Dave]

Soros's buddies, al Qaeda, have done their job for him this month with their latest tape.

As usual, the markets panic and tank 2-4% when these old lies/myths are recycled.

[kittymyrib]

The mutual funds were playing fast and loose all during the '90s, but no one investigated them during the "Clinton boom." In fact, he couldn't be removed from office because the stock market was so high, remember? No, Spitzer and the MA Attorney General waited until it looked like the economy and the market was coming back during Bush's watch so this would put a damper on the market. Who cares which investors and pension funds get hurt as long as the left's political agenda moves forward?

[Grampa Dave]

One really has to suspect the timing of these events as you have noted.

A younger relative said that it reminded him of the piling on of Microsoft by all the various state AG's.

[Grampa Dave]

Well, the Islamofascist trolls working for Soros have given the world another Holiday present.

[Grampa Dave]

This repeating cycle of the latest al Qaeda tape or $oddomite Tape has me thinking the best way to buy each month on a dip is the second day after the latest mythical tape hits the main press.

[SierraWasp]

Looks to me like you and Grampa "Rantma" Dave have got things pretty much "figured out!" And I couldn't agree MORE!!!

[dead]

Holiday Greetings From al Qaeda

Merry Christmas to you too, Al!

Give my best to Mrs. Qaeda.

[Grampa Dave]

I like the Christmas time greeting that we sent to old Benny Laden two years ago in December in his cave in Afghanistan.

[SierraWasp]

This falls right in line with what you are saying:

11:10AM Dollar tumbles over political concerns, trade issues by Rachel Koning

CHICAGO (CBS.MW) -- The U.S. dollar turned sharply lower Tuesday, falling more than 1 percent against the euro in recent dealings amid a host of factors. The euro was recently up 1.2 percent at $1.1886, with significant buying kicking in above the $1.18 level. The Treasury Department reported a fall in foreign demand for U.S. securities, cutting the need for dollars. Also, the Bush administration said it was examining Chinese textiles in response to U.S.-based requests for temporary quotas. That development comes at a sensitive time for U.S. trade over steel tariffs that risk unsettling regular dollar flows tied to trade. Analysts said ongoing flight-to-safety demand for the European currencies as terrorism and war risks pressure U.S. assets was also contributing to the dollar's tumble. The greenback fell 0.5 percent vs. the yen at 108.26 yen. The dollar fell 1.1 percent against the Swiss franc at 1.3087 francs.

[Grampa Dave]

Sounds like Soros is again playing the Euro against the $.

Maybe Putin will make a pet out of Soros and keep him on a chain in Moscow for entertainment.

[ASA Vet]

I'll have a blue Christmas without you
I'll be so blue thinking about you
Decorations of red
On a green Christmas tree
Won't be the same
If you're not here with me

And when those blue snow flakes start falling
And when those blue memories start calling
You'll be doing all right with your Christmas of white
But I'll have a blue, blue, blue, blue Christmas

Ooh, ooh, ooh, ooh

Decorations of red
On a green Christmas tree
won't mean a thing
If you're not here with me

I'll have a blue Christmas, that's certain
And when that blue heartache starts hurtin'
You'll be doing all right
With your Christmas of white
But I'll have a blue, blue Christmas

Mmmm

That what you wanted Dave?

[Grampa Dave]

You have made my pre holidays so happy with that great lyric and picture!

Nothing warms one's heart more these great old lyrics being recycled during this season.

[ASA Vet]

That tune will now be repeating over and over in your head.

Ain't earworms fun?

Thank ya

Thank ya

Thank ya very much..

[Grampa Dave]

You are so bad!

[SierraWasp]

Is zat Evis? Er Sammy Davis, Jr.? Ha Ha Ha!!!

[Grampa Dave]

Elvis Davis Benny Laden makes the return from the maggots to drive the US stock market down.

[blackie]

Holiday ~ Bump!

[SierraWasp]

It ain't gonna work!!! See the following:

1:08PM Fed's Santomero predicts 2004 'will be a good year' by Greg Robb

WASHINGTON (CBS.MW) -- The economy has begun to gain momentum and this should carry over into next year, said Anthony Santomero, the president of the Philadelphia Federal Reserve Bank. "I expect economic growth to continue at a healthy pace as we move into the new year," Santomero said in a speech to the Philadelphia Estate Planning Council. "From an economic perspective, I believe 2004 will be a good year," he said. Growth in GDP and employment will persist, "though it will take some time before the economy reaches full potential output," he said. Santomero reiterated a comment made last Friday that he does not think any Fed rate hike is necessary "in the near future." But he stressed that the current low level of interest rates "cannot be maintained indefinitely."

And I say... Don't be caught in bondage with interest rates destined to begin rising early next year!!! Especally Collateralized Mortgage Obligations (CMO's)!!!

[Dog Gone]

Excellent advice.