- Wall Street mixed on AIG worries

Stock Ideas

Teaser Mail Reviews

Wall Street mixed on AIG worries

Market Watch

By Chris Johnson I’ve made it rather clear over the past few weeks that I love earnings season. It creates expectations, it moves sentiment to extremes, it gets stocks moving, it gets the adrenaline flowing … in short, it opens up opportunities.
More...

Login Form

Wall Street mixed on AIG worries

Monday, 11 February 2008

NEW YORK - Wall Street was mixed Monday as investors reacted well to strong earnings from Hasbro Inc. but also were concerned that American International Group Inc. may have more mortgage debt to write off. The Dow Jones industrial average fell about 100 points.
AIG, one of the 30 companies that make up the Dow, said in a regulatory filing that it would need to alter the way it values its credit default swaps involving collateralized debt obligations. Credit default swaps are insurance policies against defaults, and CDOs are funds that contain slices of bonds, some of which are backed by mortgages.

The insurer said auditors found it "had a material weakness in its internal control over financial reporting and oversight" regarding how it valued certain credit default swaps. The filing raised concerns that there will be further losses at AIG, and that other financial companies might reveal similar problems. AIG tumbled $4.78, or 9.4 percent, to $45.90.

"The AIG news pulled the rug out from under hopeful investors," said Jack Ablin, chief investment officer at Harris Private Bank.

Meanwhile, Yahoo Inc.'s board rejected a $44.6 billion takeover offer from Microsoft Corp. Yahoo said its board concluded that Microsoft's unsolicited offer "substantially under-values" the Internet search company. Microsoft, another Dow component, fell 56 cents, or 1.9 percent, to 28.00, while Yahoo rose 19 cents, or 0.6 percent, to $29.38.

The Dow fell 40.72, or 0.33 percent, to 12,141.41. Dow Jones & Co. said it was replacing two of the blue chip index's 30 components -- Altria Group Inc. and Honeywell International Inc. -- with Bank of America Corp. and Chevron Corp., effective Feb. 19.

Broader stock indicators were mixed. The Standard & Poor's 500 index fell 1.07, or 0.08 percent, to 1,330.22, and the Nasdaq composite index rose 8.05, or 0.35 percent, to 2,312.90.

AIG's filing overshadowed investor optimism about a profit report from Hasbro Inc., the world's second-largest toymaker. Hasbro said fourth-quarter income soared 24 percent, thanks to a 16 percent increase in sales. Its shares rose 73 cents to $26.61.

Capital Crisis's The Endless Paycheck Portfolio: Reviews

Collecting the 75 income "paychecks" I tell you about in your copy of The Ultimate Paycheck Portfolio: Double-Digit Yields... Even in Flat Markets is so effortless you can literally do it...
+ Full Story

July Consumer Credit figures interesting to watch

By Christian HillThe economic calendar gets off to a slow start this week with only four reports being released from Monday through Wednesday. The one that will be interesting to watch is the July...
+ Full Story

Last week, the Dow fell 4.40 percent, the S&P's 500 index declined 4.60 percent, and the Nasdaq dropped 4.50 percent. The Dow is about 15 percent below its Oct. 9 record close of 14,164.53, and about 4 percent above the 15-month lows it hit in January.

Bond prices rose Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.61 percent from 3.65 percent late Friday.

Light, sweet crude oil rose 20 cents to $91.97 per barrel on the New York Mercantile Exchange.
Source : Investors Hub Newsdesk This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

We endeavor to decipher analysis of this Teaser/News Letter to distinguish the thoughts of Authors/Editors.
Please post your Review/Comments, your rating helps other users gauge the value of an article ...