PortfolioCrafter - Market Commentary 11/20/07
November 20th, 2007 / 10:27 pm / by portfoliocrafter
Stocks ended with gains as strength in technology stocks overtook ongoing worries about the financial sector, and minutes from the Federal Reserve’s October meeting did little to change views of another rate cut ahead. Some buyers returned to the market to scoop up troubled financial stocks.
The Dow Jones industrial average closed up 51.70 or 0.40% to 13,010.14, the broader S&P 500 closed up 6.43 or 0.45% to 1,439.70, and the tech-fueled Nasdaq composite closed up 3.43 or 0.13% to 2,596.81.
Market breadth was positive. On the New York Stock Exchange, winners were even with losers on volume of 1.9 billion shares. On the Nasdaq, decliners led advancers three to two on volume of 2.6 billion shares.
Bad news from mortgage backers dragged the mortgage sector - and the broader markets - down. Wall Street is continuing to bet that the central bank will cut rates by at least a quarter-percentage point at the Dec. meeting. But, there may also have been some speculation that the Fed could step in early. In economic news, October housing starts rose more than expected, while permits fell more than expected.
Shares of Freddie Mac closed down $10.76 or 28.69% to $26.74, after reporting a steep quarterly loss and said it had set aside $1.2 billion in the quarter to account for credit losses. The company is looking to raise cash itself after a larger-than-expected loss cut its capital close to the bone.
Stock of Nordstrom Inc. closed up $3.69 or 12.09% to $34.21, after it expanded its share-buyback plan to $2.5 billion and reported a 22% rise in profit.
Shares of Hewlett-Packard closed up $0.12 or 0.24% to $49.56, after reporting quarterly sales and revenue that topped expectations. H-P also said its board approved the buyback of up to $8 billion worth of its common stock. In the fiscal fourth quarter, H-P earned $2.2 billion, compared with $1.7 billion a year ago. Revenue rose 15% to $28.3 billion from last year’s $24.6 billion.
Oil closed at a record high, with January crude surging $3.21 to settle at $98.03 a barrel, surpassing the previous closing record of $96.70 set Nov. 6.
All the best,
Manuel Jesus-Backus
The Portfolio Crafter
