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Folks, if u have the time do read this interesting write-up interview with Citigroup biggest single investor.
http://money.cnn.com/2007/11/08/news/companies/citigroup_alwaleed.fortune/index.htm?postversion=2007110906
I like the following question asked:
Q: Do you think Citi is undervalued now? Are you going to buy more of it?
A: Look, frankly speaking, Citibank at this price is ridiculous. Citibank does not deserve that. Citibank deserves a lot better.
What will be your answer?
For me...YEEEESSSSSS !!!!!!
Stocks battered by mortgage mess
Dow falls over 150 points on news Wachovia will take a $1 billion hit, forecasts for slower growth in Europe.
Stocks sold off early Friday, continuing steep losses for the week as Wachovia became the latest bank hit by fallout in the mortgage sector.
The 30-share Dow Jones industrial average (Charts) lost 1.2 percent, while the broader S&P 500 index (Charts) fell 1.5 percent.
The tech-fueled Nasdaq (Charts) slid over 2 percent.
In a filing with the Securities and Exchange Commission, Wachovia (Charts, Fortune 500) said the complex debt instruments it had in its portfolio declined in value by an estimated $1.1 billion pre-tax in October. The bank had reported $1.3 billion in pre-tax losses in the third quarter tied to pools of debt backed by home loans
The additional losses from Wachovia come after Citigroup (Charts, Fortune 500) said last week it expects to write down a further $8 billion to $11 billion in the fourth quarter due to credit- and mortgage-related problems.
Adding to investor woes was a weak growth forecast from the European Union, which said growth in the area of 27 nations is expected to slow to 2.4 percent next year and in 2009, down from 2.9 percent this year. The EU attributed weaker growth to problems stemming from the subprime mess in the U.S. and the rise in oil prices.
A bit of positive news: The U.S. trade deficit fell to the lowest level in 28 months as a falling dollar helped boost exports.
Among stocks in the news early Friday, Merck (Charts, Fortune 500) announced it will pay $4.85 billion to resolve most of the the 27,000 claims involving its blockbuster pain medication Vioxx.
Disney (Charts, Fortune 500) reported earnings that beat expectations on sales that were roughly in line with analysts' estimates.
Clearwire (Charts) and Sprint Nextel (Charts, Fortune 500) said they ended an earlier agreement they had to build a high-speed wireless network.
Oil prices eased in electronic trading. Light, sweet crude for December delivery slipped 6 cents to $95.40 a barrel.
The dollar fell to another record low versus the euro.
Major markets in Asia finished lower on mounting credit fears. In Europe, stocks lost ground around and were slightly lower in midday trade.
By James Tyson
Nov. 9 (Bloomberg) -- Fannie Mae, the biggest source of money for U.S. home loans, said profit in the first nine months of the year fell 57 percent as mortgage defaults fueled an increase in credit losses. The shares dropped.
The company had been behind on its financial reporting because of an accounting overhaul. Net income for the first three quarters of 2007 dropped to $1.5 billion, or $1.17 a share, from $3.5 billion, or $3.16, a year earlier, the government-chartered company said in a Securities and Exchange Commission filing today.
The filing, which brings the company up-to-date on its earnings reports, shows Fannie Mae hasn't been immune to the worst U.S. housing slump in 16 years. The company is grappling with the same loan delinquencies and foreclosures that led to losses at Citigroup Inc., Washington Mutual Inc. and Countrywide Financial Corp., and it was recently subpoenaed by New York Andrew Cuomo in an investigation into fraudulent home appraisals.
``Fannie Mae is becoming another poster child for the problem you see with Countrywide Financial, Washington Mutual and any of the firms with a good chunk of mortgage business,'' said Michael Mullaney, who manages $10 billion at Fiduciary Trust Co. in Boston. ``You just don't know anymore where you're going to get a negative surprise that comes out of the woodwork.''
The Washington-based company in August reported 2006 profit fell 36 percent on reduced interest income. Credit losses this year have risen to as much as 6 basis points from about 2 basis points, Chief Executive Officer Daniel Mudd said in a Sept. 27 interview. A basis point is 0.01 percentage point.
``I suspect we will see credit losses increase 200-, 300- or 400 percent,'' said Josh Rosner, managing director at New York- based research firm Graham Fisher & Co. ``It will be dramatic.''
Foreclosures
Fannie Mae shares tumbled 10 percent two days ago because of the tightening credit market and an announcement by Cuomo that he expanded his probe of the mortgage industry to include the company. The shares fell $2.51 to $47.29 at 9:31 a.m. in New York Stock Exchange composite trading.
Fannie Mae owns or guarantees about 20 percent of the nation's $11.5 trillion residential mortgage market.
Congress created Fannie Mae to expand home ownership. The company, which increases mortgage financing by buying loans from lenders, profits by holding mortgages and mortgage bonds as investments and by charging a fee to guarantee and package loans as securities. It sees losses when defaults and foreclosures rise.
Home foreclosures doubled in September from a year earlier as subprime borrowers struggled to make payments on adjustable- rate loans, according to RealtyTrac Inc. Foreclosures are plunging the housing industry deeper into recession by pushing more homes onto a market where sales and prices are dropping. There's a 10-month supply of unsold homes, the highest in at least eight years.
As many as half of the 450,000 subprime borrowers whose mortgages will reset through December may lose their homes because they can't afford the higher payments and can't refinance into new loans, according to data compiled by UBS AG and Credit Suisse Group.
Current Filer
Cuomo said Nov. 7 that he subpoenaed Fannie Mae and Freddie Mac to determine whether home loans purchased by the companies were based on tainted property valuations stemming from ``widespread'' collusion between lenders and property appraisers.
The restoration of current financial statements satisfies a prerequisite for the removal of limits on Fannie Mae's $723.2 billion mortgage portfolio and other regulatory constraints imposed after disclosures of the accounting errors in 2004. The company hadn't filed timely results since July of that year.
``Becoming a current SEC filer again eliminates the remaining arguments of'' Fannie Mae's regulator for insisting the company continue to curb growth and set aside 30 percent more capital than the usual minimum, David Hochstim, a Bear Stearns & Co. analyst, said in a Nov. 6 report to clients.
Fannie Mae had been working to correct the flaws in its accounting and internal controls that led to a $6.3 billion overstatement of earnings. The errors prompted the ouster of Chief Executive Officer Franklin Raines, delayed financial reporting and resulted in a $400 million federal fine.
US STOCKS-Wall St opens lower on bank losses, tech
U.S. stocks dropped sharply at the market open on Friday as Wachovia (WB.N: Quote, Profile, Research) joined other major banks reporting huge credit losses and as worries about the outlook for tech company profits mounted.
The Dow Jones industrial average (.DJI: Quote, Profile, Research) was down 88.28 points, or 0.67 percent, at 13,178.01. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was down 14.36 points, or 0.97 percent, at 1,460.41. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 47.25 points, or 1.75 percent, at 2,648.75.
Stocks set to slide further
Futures point to sharply lower open after Wachovia warns of further losses linked to mortgage debt.
LONDON (CNNMoney.com) -- U.S. stocks looked set to slide at the open on Friday after Wachovia warned of further losses due to risky mortgage bets, escalating credit worries.
At 7:01 a.m. ET, Nasdaq and S&P futures had turned sharply lower and were pointing to sizeable losses at the start for Wall Street.
In a filing with the Securities and Exchange Commission, Wachovia (Charts, Fortune 500) said the complex debt instruments it had in its portfolio declined in value by an estimated $1.1 billion pre-tax in October. The bank had reported $1.3 billion in pre-tax losses in the third quarter tied to pools of debt backed by home loans
The additional losses from Wachovia come after Citigroup (Charts, Fortune 500) said last week it expects to write down a further $8 billion to $11 billion in the fourth quarter due to credit- and mortgage-related problems.
Adding to investor woes was a weak growth forecast from the European Union, which said growth in the area of 27 nations is expected to slow to 2.4 percent next year and in 2009, down from 2.9 percent this year. The EU attributed weaker growth to problems stemming from the subprime mess in the U.S and the rise in oil prices.
The University of Michigan releases a report on November consumer sentiment at 10 a.m. ET. The reading will be monitored for signs of whether the credit crunch is hitting consumers.
Elsewhere on the economic front, a report on October import and export prices is on tap before the market open, as is a reading on the September trade balance.
Stocks in the news early Friday included Merck (Charts, Fortune 500), which has agreed to pay $4.85 billion to settle up to 27,000 claims involving its pain medication Vioxx, according to published reports.
Disney (Charts, Fortune 500) reported earnings that beat expectations on sales that were roughly in line with analysts' estimates.
Clearwire (Charts) and Sprint Nextel (Charts, Fortune 500) said they ended an earlier agreement they had to build a high-speed wireless network.
Oil prices eased in electronic trading. Light, sweet crude for December delivery slipped 5 cents to $95.41 a barrel in Asia.
The dollar fell to another record low versus the euro.
Major markets in Asia finished lower on mounting credit fears. In Europe, stocks lost ground around and were slightly lower in midday trade.
Futures drop further after Wachovia news
NEW YORK (Reuters) - Stock index futures slid further on Friday as Wachovia Corp (WB.N: Quote, Profile, Research), the fourth-largest U.S. bank, disclosed exposure to securities linked to subprime mortgages, heightening investor concern about the impact of the credit crisis.
S&P 500 futures fell 12.5 points and were below fair value, a formula to evaluate pricing taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures dropped 88 points, and Nasdaq 100 futures slid 13.5 points.
US STOCKS-Market drops on Cisco's view; Qualcomm off late
U.S. stocks fell for a second straight day on Thursday, led by declines in the Nasdaq after tech bellwether Cisco Systems Inc (CSCO.O: Quote, Profile, Research) signaled the credit crisis was hurting demand from key customers, including banks.
A late-day rebound in beaten-down financial stocks, however, pulled the indexes well off their worst levels of the day. The rebound was attributed to traders buying stocks to cover their earlier bets against the financial sector, which has been trading at two-year lows.
The Nasdaq was still left with its biggest two-day percentage drop in five years.
Cisco's chief executive said late on Wednesday the largest maker of computer networking equipment had suffered a dramatic drop in orders from banks and retailers, triggering concerns about Cisco's growth prospects, which relies on business spending. For details, see [ID:nN08236573]
Voicing similar worries about the outlook for the economy, Federal Reserve Chairman Ben Bernanke added to the sense of caution. He said the economy faced risks on both the growth and inflation fronts.
"They got the stocks that were doing well, the big-cap tech, the ones that have been immune to the subprime story," said Stephen Massocca, co-chief executive, San Francisco-based investment bank Pacific Growth Equities, in reference to the impact of the Cisco CEO's comments.
Until recently, investors had been optimistic that tech shares offered a safe haven amid the credit turmoil that has roiled shares of banks and brokerages.
But, "when you have dramatic moves in the market, you're going to have a lot of day trading and that leads to volatility. A lot of people got short midday and had to cover at the close."
The Dow Jones industrial average (.DJI: Quote, Profile, Research) fell 33.73 points, or 0.25 percent, to end at 13,266.29. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was down just 0.85 of a point, or 0.06 percent, at 1,474.77. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 52.76 points, or 1.92 percent, at 2,696.00.
QUALCOMM OFF 7 PERCENT ON OUTLOOK
After the closing bell, wireless technology developer Qualcomm Inc (QCOM.O: Quote, Profile, Research) gave a disappointing outlook for fiscal 2008 earnings and revenue. [ID:nN08264266] Its stock slid 7.4 percent to $36.80 in extended-hours trading. On the Nasdaq, Qualcomm closed at $39.76, down 3.5 percent.
During the regular session, the Dow and S&P had been down 1 percent each and the Nasdaq was down 3 percent. The blue-chip Dow average at one point broke below its 200-day moving average, joining the S&P 500, which had a similar breakdown on Wednesday.
The Dow and S&P still finished at their lowest since mid-September and have given back all of the ground gained since the first of the Federal Reserve's two interest-rate cuts this fall.
Shares of Cisco fell 9.5 percent to $29.63 and were the catalyst for the slide by other tech shares, analysts said.
The heaviest weight on the Nasdaq 100 (.NDX: Quote, Profile, Research) was Apple (AAPL.O: Quote, Profile, Research), down 5.8 percent at $175.46, followed by Cisco.
The top-weighted decliner in the S&P 500 was Cisco.
Shares of International Business Machines Corp (IBM.N: Quote, Profile, Research), the technology services company, were the biggest drag on the Dow.
IBM shares were down 4.5 percent at $106.11 on the New York Stock Exchange. Computer maker Hewlett-Packard Co (HPQ.N: Quote, Profile, Research), another Dow component, fell 3.7 percent to $49.94.
Gains in a handful of big technology companies, including Apple, had offset recent stock market losses, allowing the S&P to post a 1.5 percent gain last month and the Nasdaq to rise 5.8 percent.
Among Thursday's top gainers in the financial sector were shares of Morgan Stanley (MS.N: Quote, Profile, Research), which ended up 4.9 percent at $53.68. The investment bank said late on Wednesday it has suffered a $3.7 billion loss stemming from subprime mortgage exposure, which it expects will reduce fourth-quarter earnings by about $2.5 billion. Some analysts had projected a larger write-down.
But not all the financial stocks rebounded, with Citigroup being a prime example. Citigroup has fallen for eight straight sessions, its longest uninterrupted slide in more than six years and a slump that has chopped its value by 23 percent, or $48.5 billion.
Citigroup ended Thursday's session down 1.5 percent at $32.90 on the NYSE.
Trading was above average on the New York Stock Exchange, with about 2.19 billion shares changing hands, above last year's estimated daily average of 1.84 billion. On Nasdaq, about 3.46 billion shares traded, far ahead of last year's daily average of 2.02 billion.
Declining stocks outnumbered advancing ones by a ratio of about 17 to 16 on the NYSE and by about 8 to 7 on Nasdaq.
US stocks fell for a second straight day on Thursday, led by declines in the Nasdaq after tech bellwether Cisco Systems signalled the credit crisis was hurting demand from key customers, including banks. A late-day rebound in beaten-down financial stocks, however, pulled the indexes well off their worst levels of the day. The rebound was attributed to traders buying stocks to cover their earlier bets against the financial sector, which has been trading at two-year lows.
The Dow Jones industrial average fell 33.73 points, or 0.25 per cent, to end at 13,266.29. The Standard & Poor's 500 Index was down just 0.85 of a point, or 0.06 per cent, at 1,474.77. The Nasdaq Composite Index was down 52.76 points, or 1.92 per cent, at 2,696.00.
The European Central Bank held its key interest rate at 4.0 per cent on Thursday as the bank contends with conflicting pressures from a soaring euro and a jump in euro zone inflation. The Bank of England held interest rates at a six-year high of 5.75 per cent for the fourth month running on Thursday, but expectations of a cut soon are growing as stocks slide and house prices fall.
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Higher oil prices have 'renewed upward pressure on inflation and may impose further restraint on economic activity.'
? Federal Reserve Chairman Ben Bernanke
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Wall St. selloff continues
Improved results from Ford fail to sooth investors' credit market worries
Stocks retreated at the start of Thursday's session as Wall Street wrestled with surprisingly strong results from automaker Ford and lingering credit market fears.
The Dow Jones industrial average (Charts) lost 0.3 percent in the opening moments of trade, just a day after suffering one of its biggest point declines of the year.
The broader S&P 500 index (Charts) slipped 0.4 percent, while the tech-fueled Nasdaq (Charts) fell 0.9 percent.
Just a day earlier, major indexes tumbled nearly 3 percent lower, with the Dow industrials plunging 361 points, dragged lower by persistent credit market fears.
Offsetting those concerns were improved results from Ford Motor Co. (Charts, Fortune 500) that topped Wall Street expectations. Ford shares climbed 2 percent in morning trade on the New York Stock Exchange.
But those fears may continue to weigh on investors as Morgan Stanley (Charts, Fortune 500) announced late Wednesday it would take a $3.7 billion writedown because of bad bets on subprime mortgages.
Late Wednesday, Dow component American International Group (Charts, Fortune 500) reported disappointing results after the closing bell Wednesday, blaming the battered housing market and tighter credit conditions.
And media giant News Corp. (Charts, Fortune 500) reported a decline in earnings from a year ago after Wednesday's closing bell, although it topped analysts' expectations, helped by strong box office results from films such as "The Simpsons Movie".
Retail sales eased for the second straight month in October, major retailers reported Wednesday, a worrisome sign for this yaer's holiday shopping season.
Wal-Mart (Charts, Fortune 500), the world's largest retailer, reported an increase in sales at the low end of its forecast.
But wholesale club retailer Costco (Charts, Fortune 500) posted better-than-expected results, helped by strong sales outside the United States.
Oil prices retreated but continued to remain near record level as light, sweet crude for December rose $1.22 to $97.59 a barrel. Just a day earlier it reached a new trading high of $98.62 a barrel.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 4.30 percent from 4.33 percent late Wednesday.
In currency trading the dollar again eased against the euro, but was narrowly higher against the yen.
Overseas, Asian markets finished sharply lower, while European shares were mixed in midday trade.
Bernanke-U.S. economy resilient, strains persist
Federal Reserve Chairman Ben Bernanke said on Thursday the U.S. economy has been resilient in the face of credit market strains but it faces risks on both the growth and inflation fronts.
"Financial market volatility and strains have persisted," Bernanke said in testimony prepared for delivery to the congressional Joint Economic Committee. "In addition, further sharp increases in crude oil prices have put renewed upward pressure on inflation and may impose further restraint on economic activity."
Bernanke said that when Fed policy-makers met on Oct. 30-31, they saw both downside risks to economic growth and "important upside risks" to inflation, citing oil and other commodity price increases and a drop in the dollar's value.
"These factors were likely to increase overall inflation in the short run and, should inflation expectations become unmoored, had the potential to boost inflation in the longer run as well," he said.
Policy-makers expect economic growth to slow "noticeably" in the fourth quarter of the year from the third quarter, the Fed chairman said.
The housing market contraction seems likely to intensify, and household spending and business investment may decelerate as well, he said.
Financial markets saw the testimony as suggesting a greater likelihood of further interest rates cuts. Prices for U.S. government debt rose and the dollar fell, while stock prices declined further in a sign investors were worried on growth.
The U.S. central bank has lowered benchmark borrowing costs by three-quarters of a percentage point over the past two months in an effort to buffer the economy from a sharp housing downturn and related turmoil in credit markets.
US STOCKS-Market adds to losses after Bernanke
U.S. stocks extended losses on Thursday after Federal Reserve Chairman Ben Bernanke said the economy faced risks on both the growth and inflation fronts.
The Dow Jones industrial average (.DJI: Quote, Profile, Research) was down 66.09 points, or 0.50 percent, at 13,233.93. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was down 3.94 points, or 0.27 percent, at 1,471.68. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 29.82 points, or 1.08 percent, at 2,718.94.
US STOCKS-Market falls as tech drags, Bernanke eyed
U.S. stocks fell on Thursday, weighed down by a sell-off in shares of technology companies such as Cisco Systems Inc (CSCO.O: Quote, Profile, Research) on concerns that the credit crisis may be starting to hurt tech spending.
Caution ahead of Federal Reserve Chairman Ben Bernanke's testimony on the economy also kept investors on the defensive.
The Dow Jones industrial average (.DJI: Quote, Profile, Research) was down 22.60 points, or 0.17 percent, at 13,277.42. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was down 2.10 points, or 0.14 percent, at 1,473.52. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 22.91 points, or 0.83 percent, at 2,725.85.
US STOCKS-Blue chips up on Rio Tinto news; Nasdaq sags
The S&P 500 and Dow rose at the open on Thursday as shares of natural resources companies gained after BHP Billiton's bid for rival miner Rio Tinto.
The Nasdaq was flat, held down by shares of Cisco (CSCO.O: Quote, Profile, Research) after the network-equipment maker made negative comments about demand from some customers.
The Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 46.09 points, or 0.35 percent, at 13,346.11. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was up 4.36 points, or 0.30 percent, at 1,479.98. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 3.95 points, or 0.14 percent, at 2,744.81.
Ford offers Wall Street some relief
Automaker reports better-than-expected quarterly results, helping to offset dim outlook from Cisco, credit jitters.
U.S. stock futures gained some ground early Thursday after better-than-expected earnings from Ford Motor helped offset concerns about the credit crunch and economic outlook.
At 7:28 a.m. ET, Nasdaq futures were off their lows while S&P futures turned higher. Earlier, both indicators had suggested a much sharply lower opening for Wall Street.
Helping to boost sentiment were Ford's (Charts, Fortune 500) third-quarter results. The automaker posted a net loss that was narrower than analysts had expected. A much bigger-than-expected loss at rival General Motors (Charts, Fortune 500) helped spark the previous session's stock selloff.
Ford shares rose 5 percent in premarket trading.
The Dow Jones industrial average plunged 361 points and all the major indexes lost nearly 3 percent of their value Wednesday on concerns about the credit market and a record high oil price that came within $1.38 of the $100-a-barrel milestone.
Oil prices eventually retreated to end 33 cents a barrel lower Wednesday, but they were on the rise again in early electronic trading Thursday. A barrel of light sweet crude gained 41 cents to $96.78 in electronic trading.
In a conference call Wednesday after Cisco (Charts, Fortune 500) reported fiscal first-quarter earnings and revenue above analysts' forecasts, CEO John Chambers said he expects the cooling U.S. economy to hamper the unit of the Internet server maker that deals with businesses. That sent shares of Cisco down more than 10 percent in heavy Frankfurt trading early Thursday.
Morgan Stanley (Charts, Fortune 500) became the latest major Wall Street firm to reveal massive losses due to subprime mortgage woes as it announced a $3.7 billion writedown late Wednesday, and said it could lose up to $6 billion if all of its investments in the sector went bad. Shares of the stock still managed to edge higher in after-hours trading as the report was seen placing a limit on its exposure.
Dow component American International Group (Charts, Fortune 500) posted lower earnings after the bell Wednesday that missed forecasts, as world's largest insurer said it was hurt by tight credit and the ailing U.S. housing market. Shares of AIG lost 3 percent in after-hours trading following the report.
Drugmaker Merck & Co. (Charts, Fortune 500), another Dow component, issued a study late Wednesday that showed volunteers who got its experimental AIDS vaccine in a study were far more likely to get infected with the virus through sex or other risky behavior than those who got placebos. Merck shares fell nearly 2 percent in Frankfurt trading.
Media conglomerate News Corp. (Charts, Fortune 500) reported improved operating earnings after the bell Wednesday that topped forecasts, but shares remained unchanged in after-hours trading.
In another sign of weakness in the housing market, luxury home builder Toll Brothers (Charts, Fortune 500) reported a sharp drop in revenue and sales in a preliminary look at fourth quarter results.
Major retailers are to due report October sales, and some could give an outlook for the all-important holiday shopping period. Thomson First Call is forecasting that sales at chain stores open a least a year, an important retail measure known as same-store sales, rose a modest 2 percent in October, less than the 3 percent rise reported a year earlier.
Wholesale club retailer Costco (Charts, Fortune 500) got the reports going strongly early Thursday, reporting a 9 percent gain in sales, helped by strong sales outside the United States. That topped forecasts of a 5.7 percent increase.