Monday, Nov. 10, 2008
Anyone who thought this would be a quiet week compared to last predicted wrong.
The week began with China pushing through its own $580 billion economic stimulus plan, as leaders in the country are worried about economic growth there.
Then the U.S. government announced a revised bailout package for American International Group (AIG). The new plan will cost $150 billion. AIG posted a $24.47 billion loss for the third quarter the same day due to huge writedowns.
The shifting of more money toward the insurer may make it harder to bail out others, including struggling U.S. auto makers such as General Motors (GM), which said in an SEC filing that its financial arm, GMAC, might fail.
Electronics retailer Circuit City (CC) filed for bankruptcy, blaming the economy and loss of sales on competitors Wal-Mart (WMT) and Best Buy (BBY).
WATCH:-Obama Administration: The Next Four Years
-Government Revises AIG Plan
-Small Banks Against the Bailout
-China’s Stimulus Package
-Cavuto's The Deal: Let it Be Paul Volcker for Treasury
-Cavuto Capper: Everything Has Changed
-Cavuto Capper:What Did Bush and Obama Say?
READ:
-New AIG Plan to Leave U.S. With $150B in Exposure
-Some Small Banks Are a Refuge From Credit Crunch
-Circuit City Files for Bankruptcy Protection
-China to Enact US$580B Financial Stimulus Plan
-Detroit’s Big Three: Bail Them Out, or Let Them Fail?
Tuesday, Nov. 11, 2008
WATCH:-Crude Oil Outlook
-Secretary O’Neill Weighs In
-Sec. O’Neill on Housing and Alcoa
-Paul O’Neill on Tax Cuts
-GM running on Empty?
READ:
-GM Shares Hit 65-Year Low
-GM Says the Impossible is Possible
GM’s stock tumbled to its lowest level since 1946. Just a year ago, the stock was near $30 a share, but it traded below $3 a share on Tuesday. This was in spite of the fact that House Speaker Nancy Pelosi asked Congress to provide emergency financial assistance to the auto industry.
GM has said if it doesn’t receive assistance the company will not have enough cash next year.
GMCEORick Wagoner
Wednesday, Nov. 12, 2008
WATCH:-The Fed's $2 Trillion Secret
-Mandatory Health Insurance
-Cars Piling Up
READ:
-Regulators Urge Banks to Step Up Lending
-Survey: US Holiday Retail Sales to Fall 1%
-Treasury Secretary Paulson Says Government Won't Buy Troubled Assets
-Oil Tumbles to 22-Month Low on Economic Concerns
-Best Buy Warns of 'Seismic Changes'
Wednesday began with a disappointing survey on holiday retail sales. America’s Research Group says sales will fall 1% this year. This is the first decline the firm has forecasted in almost 25 years.
Oil continued to drop, though, hitting a 22-month low, closing at $56.16 a barrel. Meanwhile, the cost of gas at the pumps, according to AAA, on average is at $2.20, dropping below the $2.00 mark in many areas.
Secretary Paulson said the bailout package is being changed and troubled mortgage assets will not be purchased, as was originally planned and advertised to the American public. Paulson said this would take too long in this crisis and instead officials will inject capital into struggling financial firms.
At the same time regulators are urging banks to step up on lending, after receiving money from that $700 billion bailout. The Federal Reserve encouraged financial institutions to work with their mortgage borrowers and avoid foreclosures.
The Dow fell 411 points at close, as Wall Street digested Best Buy’s warnings of a "seismic shift" in consumer behavior. This was the third day in a row the index closed lower.
Thursday, Nov. 13, 2008
WATCH:-Dennis Kozlowski on Appeal, Wall Street
-Kozlowski on His Tyco andOther CEOs
-Kozlowski on Presidential Pardon
-Kozlowski on Greed
-Surviving Job Layoffs
READ:
-Jobless Claims Surge to 516,000; Average Trends Higher
-Foreclosures Rise 25% Year-Over-Year
-U.S. Trade Deficit Shrinks 4.4% to $56.5B in September
-Bank Executives Promise Not to Use Bailout Money for Pay
-How to Help When a Friend or Co-Worker Is Laid Off
The number of people applying for unemployment benefits Thursday spiked to 516,000, above levels normally seen during recession. Economists had been expecting this jobless claims number to hit a lower 484,000.
Weigh In: Are You Afraid of Losing Your Job?
Foreclosures also rose. Over 279,000 homes in the U.S. received a foreclosure-related notice in October. This is a 25% increase from the same month last year and a 5% increase from last month.
On the upside, the U.S. trade deficit shrunk 4.4% to $56.5 billion in September. This was helped by the sharply lower oil prices we’ve seen these last few months.
And while many retailers are struggling, including Circuit City, which is filing for chapter 11, Wal-Mart still reported a 10% profit increase for its third quarter. The company scaled back its outlook for the rest of the year, however, considering the weak economy.
The Dow ended up 552.59 points after a pretty schizophrenic trading session with a swing range of 900 points. This was the first day the index was up all week. While there was no clear reason for the surge, some said a weaker dollar contributed, pushing the prices of commodities, including oil, upwards.
Friday, Nov. 14, 2008
WATCH:-Expectations of G-20 Summit
-Unemployment Getting Worse?
-Jobless Claims
-Extend Benefit Claims
READ:
-Retail Sales Fell 2.8 % in October
-Unemployment Poised To Get Worse Into Next Year
-World Leader Prepare for Financial Summit
-Bernanke Leaves Door Open to Further Rate Cuts
Friday’s dismal retail numbers set the stage for the day. The Commerce Department reported retail and food sales dropped 2.8 % and Motor Vehicle sales sunk 5.5 % from September. With these numbers and tight spending on the consumer part, we can expect that retailers won’t be hiring during the holiday season.
With key interest rates already at 1%, Federal Reserve Chairman Ben Bernanke pledged to work closely with other central banks in an effort to mend global financial problems with the possibility of another interest rate cut to prop up the plummeting U.S. Economy.
Meanwhile, President Bush and world leaders prepared to gather at the financial summit with the main focus of finding a way to prevent another financial and credit crisis from happening again.
By the closing bell stocks fell sharply. The DOW, Nasdaq Composite and FOX 50 saw declines. The DOW Jones Industrial Average traded within a 451 point range and after all was said and done lost over 337 points or 3.82%. The Nasdaq Composite dropped over 79 points to 1516.85, and the FOX 50 fell over 25 points or 3.63%.
Dana to cut jobs, close plants
Wal-Mart Same Store Sales Jump 2.4%
