Results due from Goldman, J.P. Morgan Chase and Citigroup...

It's gut-check time for investors next week as earnings from three of the nation's largest banks may help determine whether the recent financial-led stock-market rally is a legitimate bull run or a bear trap.

When the first quarter ended last week, it appeared to some the best of times, and to others the worst. Financial-sector bulls during the quarter profited mightily, while bears took a beating, but ever determined, continued to increase short positions betting against the tide...

US: S&P hits 12-yr low as US stake in Citi stirs fear

* Govt stake in Citi spurs dilution worries
* Healthcare down for 2nd straight session on Obama plan
* US economy shrinks at 6.2% annual rate in 4th qtr
* Dow off 1.7%, S&P 500 off 2.4%; Nasdaq off 1%

NEW YORK - US stocks fell and the S&P 500 closed at a 12-year low on Friday, after the government said it will take a large stake in Citigroup's common shares, fanning fears it will increase its role in other major banks.

The decline closed out a grim month on Wall Street, with the Dow industrials hitting the lowest level since May 1997 as the blue-chip index fell for a sixth straight month.

Healthcare and drug companies, such as Merck & Co and Johnson & Johnson, fell for a second day on Friday on worries that US President Barack Obama's budget proposal will strangle profits as the administration tries to rein in healthcare costs.

Data showing the US economy shrank at an annual rate of 6.2 per cent last quarter also weighed on the market.

Citigroup shares tumbled 39 per cent after the government said it will convert up to US$25 billion in the bank's preferred shares to common stock in a move that could dilute existing shareholders' ownership by 74 per cent. The S&P financial index sank 8.1 per cent.

The Dow Jones industrial average dropped 119.15 points, or 1.66 per cent, to 7,062.93. The Standard & Poor's 500 Index fell 17.74 points, or 2.36 per cent, to 735.09. The Nasdaq Composite Index slipped 13.63 points, or 0.98 per cent, to 1,377.84.

US stocks have lost US$10 trillion since peaking in October 2007.

For the week, the Dow fell 4 per cent, the S&P 500 slid 4.5 per cent and the Nasdaq dropped 4.4 per cent.

For the month, the S&P fell 11 per cent and the Nasdaq shed 6.7 per cent.

Source: Singapore Business Times - 28 Feb 2009

Dow and S&P 500 fall on profit worry, GE's outlool

NEW YORK - Stocks fell on Wednesday as a big rally faltered in the last minutes of trading on worry about the weakening corporate profit picture after a news report raised questions about General Electric's earnings outlook.

In a move that has been the trademark of the market's volatility ever since Lehman Brothers' bankruptcy filing in mid-September, the Dow plunged more than 300 points in the last 12 minutes, dashing prospects for the first back-to-back gains in a month.

Aside from the GE news, reported by Dow Jones with less than 15 minutes left in the session, traders said hedge funds and mutual funds were dumping stocks to raise cash to repay clients and lenders, while other investors were eager to lock in some profit from Tuesday's huge rally.

General Electric's stock fell 4 per cent in the last minutes of trading, only to end down 1.5 per cent at US$19.20.

Dow Jones reported that General Electric's Chief Executive Jeffrey Immelt said GE aims at keeping 2009 profits at the same level as this year, even if revenue drops 10 per cent to 15 per cent.

But after the closing bell, GE told CNBC that the CEO's comments were taken out of context and that Mr Immelt gave no new forecast. GE owns CNBC.

Trading was volatile after the Federal Reserve slashed interest rates by half a percentage point, the latest in the series of moves to keep the credit crisis from triggering a deep recession. Some traders had been speculating there would be a deeper cut.

The Dow Jones industrial average fell 74.16 points, or 0.82 per cent, to close at 8,990.96. The Standard & Poor's 500 Index declined 10.42 points, or 1.11 per cent, to 930.09. But the Nasdaq Composite Index rose 7.74 points, or 0.47 per cent, to 1,657.21.

In contrast, at about 3:30pm EDT, all three indexes were rallying near session highs: The Dow was up over 230 points, or about 2.6 per cent, at 9,299 and the S&P 500 was up over 20 points, or about 2.6 per cent, at 964, while the Nasdaq was up about 46 points, or about 2.8 per cent, at 1,695.

By 3:58pm, the rally was over, with both the Dow and the S&P turning negative.

Source: Singapore Business Times - 30 Oct 2008

Deep recession fears slam Wall Street

NEW YORK - Stocks tumbled to 5 year lows on Wednesday as investors grappled with an increasingly dire outlook for the global economy following a raft of disappointing profits and outlooks from major US companies.

Plummeting commodities prices sent energy and materials company shares sharply lower. Exxon Mobil was the top drag on the Dow, down almost 10 per cent.

A plunge in emerging market assets and widespread deleveraging were seen as further signs the credit crisis that has plagued the United States and Europe has begun to hit developing countries. Stock markets around the world have fallen sharply over the last two days.

'The themes remain the same: concerns about global recession, deflation and concerns about significantly reduced worldwide demand,' said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

The Dow Jones industrial average fell 514.45 points, or 5.69 per cent, to 8,519.21. The Standard & Poor's 500 Index dropped 58.27 points, or 6.10 per cent, to 896.78, its lowest level since April 2003.

The Nasdaq Composite Index was down 80.93 points, or 4.77 per cent, at 1,615.75, closing at it lowest level since June 2003.

Source: Singapore Business Times - 23 Oct 2008

Wall Street up on hopes of credit recovery

NEW YORK - A rising wave of optimism lifted Wall Street on Monday, propelling the Dow Jones industrials up more than 400 points on more signs of a reviving credit market and support from Federal Reserve Chairman Ben Bernanke for further steps to aid the economy.

All the major indexes finished with gains of 3 per cent or more.

Investors who had sold furiously in recent weeks in response to immobile credit markets became more optimistic as bank-to-bank lending rates eased further. There's also less demand for ultra-safe Treasury bills, another sign that the credit markets are gradually returning to a healthier state.

The improvement in lending rates helped temper concerns that tight credit will contribute to a prolonged recession, but Mr Bernanke still warned that the economy is likely to be 'weak for several quarters, and with some risk of a protracted slowdown.'

But he also told the House Budget Committee that a fresh round of government measures might help ease the country's economic weakness.

There were no details but the White House said it was open to ideas that Congress might put forth.

Wall Street was also sifting through the first of hundreds of earnings reports expected this week, seeking clues about future business conditions. Among those reporting, oilfield services provider Halliburton Co topped estimates, and CEO Dave Lesar told investors and analysts in a conference call, 'We expect that any major macroeconomic disruptions will ultimately correct themselves.'

Trading was orderly for much of the day, but the final hour again saw frenetic activity, this time to the upside, with the Dow rising nearly 140 points in the last 25 minutes.

The market's tone was clearly better than during the previous two weeks, when investors' heightened anxiety about credit markets and the economy sent stocks plunging.

The relative calm in Friday's session, when the Dow fell 127, and Monday's trading, had more investors feeling confident that the worst of the market's losses was behind it.

Still, with back-and-forth trading a hallmark during recoveries from plunges in the past, analysts and investors were also expecting that Wall Street would be subject to volatile price swings for some time.

The Dow rose 413.21, or 4.67 per cent, to 9,265.43. The blue chips' gain were in line with a 4.68 per cent gain registered Thursday, when the Dow jumped 401 points.

The rally marked the Dow's 23rd triple-digit move in 26 sessions.

Most sessions have brought losses, however, with 11 of the past 14 showing declines.

Source: Singapore Business Times - 21 Oct 2008

Wall Street slips as recession worries nag

* Housing starts, consumer confidence fuel early gloom
* Honeywell cuts outlook, leads manufacturers lower
* Dow down 1.4%, S&P down 0.6%, Nasdaq down 0.4%

NEW YORK - US stocks fell on Friday on weakness in manufacturing and financial stocks after bleak data on consumer confidence and construction, but the Dow still snapped a disastrous three-week losing streak with its best weekly gain in more than five years.

It was a week marked by extreme volatility, and Friday's trading was no different, with stocks swinging back and forth between positive and negative territory. A big afternoon rally was snuffed out in the last hour of trading as uncertainty took hold before the weekend.

A rally in energy stocks fizzled late in the day as oil prices settled off their highs for the session.

The Dow Jones industrial average fell 127.04 points, or 1.41 per cent, to 8,852.22, while the Standard & Poor's 500 Index dropped 5.88 points, or 0.62 per cent, to 940.55. The Nasdaq Composite Index slipped 6.42 points, or 0.37 per cent, to 1,711.29.

For the week, the Dow rose 4.8 per cent, its best week in 5-1/2 years, while the S&P 500 had its best week since February with a gain of 4.6 per cent. The Nasdaq rose 4.1 per cent for its best week since early August.

The week featured one of Wall Street's best days ever on Monday, followed by it worst day since the 1987 stock market crash on Wednesday.

On Friday, the government's housing report showed permits for new homes sank to a nearly 27-year low in another sign of deterioration in housing. The Dow Jones home construction index lost 2.2 percent.

Source: Singapore Business Times - 18 Oct 2008

Market ends sharply higher on bargain hunting and oil

NEW YORK - Stocks leaped on Thursday, as investors snapped up beaten-down shares the day after Wall Street's worst day since the 1987 stock market crash while consumer companies gained as the price of oil fell.

Discount retailers, such as Wal-Mart and healthcare companies drove indexes higher as investors bet their profits will prove more resilient in an economic downturn.

Energy companies and materials, which were mauled in a broad sell off on Wednesday, rebounded, even as the price of oil fell below US$70 a barrel.

In another extremely volatile session, the Dow swung in a range of 700 points. Traders said monthly options expirations may have contributed to the swings.

Stocks had fallen sharply early in the session, after data showed factory activity in the Mid-Atlantic region fell to an 18-year low this month, fueling fears of a severe recession.

The Dow Jones industrial average jumped 401.35 points, or 4.68 per cent, to 8,979.26. The Standard & Poor's 500 Index climbed 38.53 points, or 4.24 per cent, to 946.37. The Nasdaq Composite Index was up 89.38 points, or 5.49 per cent, at 1,717.71.

US crude futures settled more than 6 per cent lower, ending below US$70 a barrel after weekly government inventory data reflected sliding demand.

Source: Singapore Business Times - 17 Oct 2008

Wall Street plummets as data feeds recession worry

NEW YORK - Wall Street had its worst day since the 1987 stock market crash on Wednesday, as bleak economic data fed worries that all the efforts to unlock credit markets may not stave off a severe recession.

Federal Reserve Chairman Ben Bernanke added to those concerns when he said the economy faced a 'significant threat' from paralysed credit markets.

Dismal monthly US retail sales set the tone for the session, dropping the most in more than three years, while a measure of New York state manufacturing hit its lowest level since the index started in 2001.

The Nasdaq has now wiped out all of its gains from Monday's 11 per cent rally, while the benchmark S&P 500 is up only about 1 per cent from Friday's close.

Wednesday's data intensified recession fears, as did the Federal Reserve's Beige Book report, which showed economic activity weakened across the United States in September as businesses revised capital investments and consumers curtailed spending.

Shares of companies considered economic bellwethers, such as industrial conglomerate Caterpillar Inc, fell sharply. Caterpillar's shares slid over 11 per cent.

Fears of recession knocked commodities lower, with Exxon Mobil tumbling 14 per cent as the price of oil fell.

The Dow and the benchmark S&P 500 suffered their worst one-day percentage drops since 1987.

The Dow Jones industrial average slid 733.08 points, or 7.87 per cent, to 8,577.91, while the Standard & Poor's 500 Index tumbled 90.17 points, or 9.03 per cent, to 907.84.

The Nasdaq Composite Index sank 150.68 points, or 8.47 per cent, to 1,628.33.

Source: Singapore Business Times - 16 Oct 2008