Posted on 01/18/2008 5:43:40 AM PST by TigerLikesRooster
Stocks Set to Rebound From Huge Drop
Friday January 18, 8:13 am ET
By Madlen Read, AP Business Writer
Stocks Head for Higher Open After Stronger-Than-Expected Outlook From IBM, but Jitters Remain
NEW YORK (AP) -- Wall Street appeared headed for a sharply higher open Friday as a strong outlook from IBM encouraged investors to buy back into stocks after their huge drop this week. The market remains extremely skittish, however. The Dow Jones industrial average, having suffered its worst three-day plunge in over five years, is now at levels not seen since last March.
Some companies are weathering the economic slowdown well -- like International Business Machines Corp., which told Wall Street late Thursday to raise its 2008 profit estimates for the tech company, and General Electric Co., which posted a fourth-quarter profit rise Friday.
But others are struggling. Washington Mutual Inc. reported a steep loss late Thursday for the fourth quarter, just as Citigroup Inc. and Merrill Lynch did earlier in the week. With the banking industry trying to fix its shrinking portfolios and preparing for more distress in consumer debt, the economy has only the government to fall back on.
Federal Reserve monetary policymakers meet Jan. 29-30, and the market widely expects them to lower the key interest rate, perhaps by a half-point.
And at 11:50 a.m. EST, President Bush is expected to speak on the economy and discuss a plan to stimulate the economy through tax rebates and other strategies. Treasury Secretary Henry Paulson said Friday on NBC's "Today" show he was confident a temporary stimulus package can be agreed upon quickly.
Investors also awaited consumer sentiment data from the University of Michigan, which is expected to indicate a decline as worries escalate about a possible recession. Though not a perfect predictor of consumer spending, the report is closely watched; consumer spending accounts for about two-thirds of the nation's economy.
In advance of Friday's opening, Dow Jones industrial average futures rose 155, or 1.27 percent, to 12,371.
Standard & Poor's 500 index futures gained 15.30, or 1.14 percent, to 1,355.00, while the Nasdaq 100 index futures advanced 16.25, or 0.88 percent, to 1,872.25.
A dismal reading on the Philadelphia Fed's manufacturing index and ratings agency downgrades of bond insurers sent the Dow Jones industrials down 306 points Thursday. On Friday, a Bank of America Corp. analyst cut its ratings on three bond insurers -- MBIA Inc., Ambac Financial Group and Security Capital Assurance Ltd. -- to "Neutral" from "Buy."
In other corporate news, chip maker Advanced Micro Devices Inc. on Thursday said its fourth-quarter net loss widened, but the loss was smaller than Wall Street predicted.
The dollar rose against most major currencies, while gold fell.
Crude oil futures rose 78 cents to $90.91 a barrel in pre-market trading on the New York Mercantile Exchange.
In overseas trade, Japan's Nikkei stock index rose 0.56 percent and Hong Kong's Hang Seng index advanced 0.35 percent. In Europe, London's FTSE 100 rose 1.31 percent, Frankfurt's DAX slipped 0.05 percent and Paris' CAC gained 0.28 percent.
Yeah, the doom and gloomers around here have been screaming SELL SELL SELL for the past week or so. Meanwhile, I've been saying the recent sell off represents a great buying opportunity.
Bear markets aren't for the faint of heart......
Those with the money, willing to do their homework, can buy low now and wait for the upswing in 18-24 months for a tidy 25-30% average return barring catastrophic natural disaster, war, or domestic terrorist attack.
“not seen since last March”. So 10 months’ worth of gains was wiped out. So the stock market is back where it was 10 months ago. From the reporting you’d think it was the 1930’s again. Every news program leads with stories about our “recession”.
Point of order, Mr. Chairman: They were correct.
Here's one for your scrapbook: It looks like DJII will open +100 or so. If it gives that up any time before noon, I'll make a $200 bet with the NYSE that it drops another 10% within four weeks.
That ALONE will cause a 500 point drop.
old women that i know, and many on this forum, always
appreciate a bad day on wall street!
it confirms their daily mental state of fear and dread and loathing.
We’ve seen a thousand point drop since January 1, and I expect another thousand over the next month. I’ll be buying, but not just yet.
For certain sectors, yes. Overall, my portfolio, which I personally manage, is still up over 30% for the past calendar year. There are a LOT of stocks that will weather this storm just fine, thank you.
Selling just for the sake of selling or because the DJIA drops a few percentage points is foolish. All you are doing is churning and creating commissions for brokers.....and further destabilizing the markets......
There will be money to be made if those things happen, too......
No way, stocks will never come back. We are in permanent recession and we need tax cuts to save us. < off Democrat candidate mode>
Irrational exuberance on my part.
Yep. Cash in place and I'm patiently waiting. This being an election year, look for the politico's to meddle with the markets quite a bit between now and the first Tuesday in November. Personally, I'd love to see Capital Gains taxes reduced to about 7%, or better yet eliminated entirely (hey, I can dream, too, okay?) Cutting or eliminating corporate taxes to level the playing field would help a lot, too, by bringing back some of that $14 trillion or so that has been driven off shore thanks to our regressive, confiscatory taxes.
If we could get the Capital Gains tax out of the way and bring corporate taxes in line so that we are the most favorable industrialized nation in which to do business, we would see a bull market unlike anything this or any other nation has ever seen......the only thing standing in the way is GUBMINT!
I hope the soup kitchen has Wi-Fi.
SNORT!
The recent events including subprime problem is the sign that we are running out of the cards to play. More money into the system, dollar value drops, making dollar-based finacial assets lose value. No injection of money will let the value drop on its own due to lack of liquidity. Either way, dollar-based assets lose its value.
For several years, they managed to pump in liquidity without the dollar value falling. I think that is no longer possible.
There, fixed it for you. Democrats never believe the time is right for a tax cut. What they wrongly call tax cuts, is actually a tax credit. Well Democrats and John McCain believe in tax credits.
A "Tax Credit" means that the Govt takes your money, then if you fit one of their special victim class status (i.e. Left handed gay union truck driver with a disabled parent making less then $30,000 a year) you fill out a bunch of forms and they consider whether or not to give you any of your money back
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