BOOM! Didn't I tell you this would happen .............................................
Stocks drop as Obama speech and housing data weigh
Wednesday February 25, 2009, 10:49 am EST
By Ellis Mnyandu
NEW YORK (Reuters) - Stocks fell on Wednesday as investors found little new in a major speech by President Barack Obama on how he planned to stabilize the economy, while gloomy home sales data weighed on the market.
Long-standing worries about recession and the fate of the banking sector persisted despite Obama's speech to Congress on Tuesday night, sending shares of financial services companies, big manufacturers and energy companies lower.
"The market was up 4 percent yesterday and I think that was probably a little excessive given the economic backdrop," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.
"There was a little bit of an overshoot to the upside yesterday and we're just giving some of that back early as President Obama didn't have anything substantive to say last night."
Data pointing to more weakness in the U.S. housing market added to the negative tone.
The pace of sales of existing home fell in January to a 4.49 million-unit annual rate while home prices and inventories dropped, the National Association of Realtors reported.
The Dow Jones industrial average (DJI:^DJI - News) fell 160.89 points, or 2.19 percent, to 7,190.05. The Standard & Poor's 500 Index (^SPX - News) declined 17.32 points, or 2.24 percent, to 755.82. The Nasdaq Composite Index (Nasdaq:^IXIC - News) shed 28.29 points, or 1.96 percent, to 1,413.54.
The slide in stock prices marked a major setback after Tuesday's attempted rebound from 12-year lows.
Bank of America (NYSE:BAC - News) shares fell 6 percent to $4.44 following news that its Merrill Lynch & Co unit lost $15.84 billion in the fourth quarter, about $533 million more than previously estimated by Bank of America.
Shares of Citigroup (NYSE:C - News) fell more than 11 percent to $2.31 following reports that the bank may sell its Japanese investment bank and brokerage as the embattled U.S. lender looks to raise cash from a sale of global assets.
The Dow Jones home construction index (DJI:^DJUSHB - News) fell 4.4 percent as shares of luxury home builder Toll Brothers (NYSE:TOL - News) declined 4.3 percent to $16.31. Shares of Centex Corp (NYSE:CTX - News), the third-largest U.S. home builder, dropped 6.3 percent to $6.65.
On Nasdaq, shares of thin-film solar module maker First Solar (NasdaqGS:FSLR - News) fell 19 percent to $111.02 after the company gave a bleak outlook.
Obama said the United States would emerge stronger from the crisis but investors found little in what he said to help the market sustain its attempted rebound on Tuesday from 1997 lows. (ID:nN24394594).
U.S. regulators are due to begin stress tests on Wednesday to determine how much capital banks need. Even so, investors remain uncertain about how the government would relieve banks of money-losing assets and revive lending.
Federal Reserve Chairman Ben Bernanke is back on Capitol Hill for a second day to testify on the economy, this time to the U.S. House Financial Services Committee.
(Additional reporting by Rodrigo Campos; Editing by James Dalgleish)
Stocks drop as Obama speech and housing data weigh
Wednesday February 25, 2009, 10:49 am EST
By Ellis Mnyandu
NEW YORK (Reuters) - Stocks fell on Wednesday as investors found little new in a major speech by President Barack Obama on how he planned to stabilize the economy, while gloomy home sales data weighed on the market.
Long-standing worries about recession and the fate of the banking sector persisted despite Obama's speech to Congress on Tuesday night, sending shares of financial services companies, big manufacturers and energy companies lower.
"The market was up 4 percent yesterday and I think that was probably a little excessive given the economic backdrop," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.
"There was a little bit of an overshoot to the upside yesterday and we're just giving some of that back early as President Obama didn't have anything substantive to say last night."
Data pointing to more weakness in the U.S. housing market added to the negative tone.
The pace of sales of existing home fell in January to a 4.49 million-unit annual rate while home prices and inventories dropped, the National Association of Realtors reported.
The Dow Jones industrial average (DJI:^DJI - News) fell 160.89 points, or 2.19 percent, to 7,190.05. The Standard & Poor's 500 Index (^SPX - News) declined 17.32 points, or 2.24 percent, to 755.82. The Nasdaq Composite Index (Nasdaq:^IXIC - News) shed 28.29 points, or 1.96 percent, to 1,413.54.
The slide in stock prices marked a major setback after Tuesday's attempted rebound from 12-year lows.
Bank of America (NYSE:BAC - News) shares fell 6 percent to $4.44 following news that its Merrill Lynch & Co unit lost $15.84 billion in the fourth quarter, about $533 million more than previously estimated by Bank of America.
Shares of Citigroup (NYSE:C - News) fell more than 11 percent to $2.31 following reports that the bank may sell its Japanese investment bank and brokerage as the embattled U.S. lender looks to raise cash from a sale of global assets.
The Dow Jones home construction index (DJI:^DJUSHB - News) fell 4.4 percent as shares of luxury home builder Toll Brothers (NYSE:TOL - News) declined 4.3 percent to $16.31. Shares of Centex Corp (NYSE:CTX - News), the third-largest U.S. home builder, dropped 6.3 percent to $6.65.
On Nasdaq, shares of thin-film solar module maker First Solar (NasdaqGS:FSLR - News) fell 19 percent to $111.02 after the company gave a bleak outlook.
Obama said the United States would emerge stronger from the crisis but investors found little in what he said to help the market sustain its attempted rebound on Tuesday from 1997 lows. (ID:nN24394594).
U.S. regulators are due to begin stress tests on Wednesday to determine how much capital banks need. Even so, investors remain uncertain about how the government would relieve banks of money-losing assets and revive lending.
Federal Reserve Chairman Ben Bernanke is back on Capitol Hill for a second day to testify on the economy, this time to the U.S. House Financial Services Committee.
(Additional reporting by Rodrigo Campos; Editing by James Dalgleish)
VIEW 11 of 11 COMMENTS
The only thing that I hear people bitch about most here is the abuse of disability payments, the welfare system was cleaned up years ago and much stricter but someone here needs to address the Disability Act, and see how many people are actually unable to work.
oh, and we like to bitch about you guys hahaha, but not so much now that you have changed your foreign policies
I am working class. I am technically rich. But I disperse my wealth accordingly through volunteer work and donations to the community. I help to build small businesses within the area within I live.
Now kids please put your G rated sensors on before you read anymore...
Listen CUNT. You are the fucking poster child of the current US administration. Because you live in the Midwest (yes your IP address says a lot about you) doesn't mean you should be such a bitter cunt. You are jealous and are just looking for a way for the white folk like you to get a free ride. Let me guess you'll fall in a grocery store and sue?
Foreign policy? One such as you should take a stance with an anonymous profile. I'll bet you are a bitter little rich girl that daddy and mommy keep bailing out her angel. I grew up with your type, you are a fucking cunt, nothing better than Nancy Pelosi's skin tucks. Do me a favor, rally your Obama fans and commit a mass suicide.