Traders-Blog.com

With Feds raising the interest rate, the market took a plunge today. The Dow dropped 94.37 points today, closing at 10,471.02. The Nasdaq and the S&P lost significantly today as well with the Nasdaq closing at 1,989.50 after falling 18.01 points, while the S&P lost 11.92 points to close at 1,171.86.

The Federal Reserve announced in their meeting today that they were concerned about inflation and would be raising interest rates. The February PPI (Producer Price Index) rose 2.8 percent within the last year, the quickest gain in almost ten years. Interest rates will be raised to 2.75 percent from the current 2.5 percent, while discount rates were raised from 3.5 percent to 3.75 percent.

Retek, Inc. has been stuck in the midst of a bidding war for some time now. The producer of retail-management software has been receiving lucrative bids from both Oracle Corp. and SAP, Europe’s largest software group. Today, Oracle placed a bid that Retek could not decline and that SAP could not beat. SAP pulled out today, and Oracle will be purchasing Retek for $631 million, or $11.25 per share. According to Larry Ellison, CEO of Oracle, the strategic move will help strengthen Oracle’s position “strengthens (Oracle’s) position in the retail applications market globally.”

AIG sent their two top executives packing today. AIG has been under investigation by the SEC for possibly manipulating financial statements to paint a picture that could be much different than the truth. Chief Financial Officer Howard Smith, and Christian Milton, a vice president for reinsurance were sent home today after invoking their Fifth Amendment rights when dealing with federal investigators.

Tobacco companies are currently facing a $280 billion racketeering suit claiming that they have ill-gotten gains. However, today sources reported that the companies may be seeking to settle the suit with the Justice Department through a court-appointed mediator. Altria suffered yesterday after news that the U.S. Supreme Court would not be considering an appeal to overturn a $10 million judgment against Altria made in favor of a California smoker who sued because he contracted lung cancer. Tobacco stocks for all companies rose this afternoon.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter