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Oil to FALL to $25! But Elect Still Priced @ $150! Still Dun Want to REVOLT?

makapaaa

Alfrescian (Inf)
Asset

U.S. Stocks Drop, Led by GM; Exxon Falls on $25 Crude Forecast
2008-12-04 21:30:51.280 GMT


By Elizabeth Stanton and Jeff Kearns
Dec. 4 (Bloomberg) -- U.S. stocks fell for the first time in
three days, pushed down by concern General Motors Corp. may file
for bankruptcy and a plunge in energy shares following Merrill
Lynch & Co.’s prediction that oil will hit $25 a barrel.
GM lost 16 percent after a person familiar with the matter
said the largest U.S. automaker is exploring a reorganization
with workers, creditors and lenders. Southwestern Energy Co., EOG
Resources Inc. and Exxon Mobil Corp. slumped, sending the
Standard & Poor’s 500 Energy Index to a 6.2 percent decline.
Apple Inc. slipped 4.7 percent as Nokia Oyj said the global
mobile-phone market will shrink 5 percent or more next year.
The S&P 500 lost 2.9 percent to 845.22. The Dow Jones
Industrial Average fell 215.45 points, or 2.5 percent, to
8,376.24. The Russell 2000 Index of small U.S. companies fell 3.1
percent to 439.53. Indexes also dropped after the Labor
Department said more Americans are collecting jobless benefits
than at any time since 1982.
“As bad as you think it is, it’s worse,” said Diane
Garnick, who helps oversee about $500 billion as an investment
strategist at Invesco Ltd. in New York. “The chances of the
economy turning around in the first half of 2009 are declining
rapidly because unemployed people can’t spur economic growth.”
The S&P 500 has fallen 42 percent in 2008 as writedowns and
losses at financial firms approach $1 trillion and more
economists forecast that the U.S. recession will be one of the
most severe in the post-World War II era. Today’s decline pared
its rebound from an 11-year low on Nov. 20 to 12 percent.

New Lows

Sixteen companies in the S&P 500 fell to 52-week lows today.
They included Freeport-McMoRan Copper & Gold Inc., the largest
publicly traded copper producer, and Campbell Soup Co. None
reached new highs.
The Chicago Board Options Exchange Volatility Index added
4.8 percent to 63.64. The so-called VIX, which reached a record
high of 80.86 on Nov. 20, measures the cost of using options as
insurance against S&P 500 declines. The MSCI World Index of 23
developed markets retreated 1.7 percent to 845.41 as of 4:30 p.m.
in New York.
“There’s a concern out there that this isn’t a recession,
it’s the Great Depression II, or the Great Recession I,” said
Kenneth Schapiro, president of Condor Capital Management, which
oversees $500 million in Martinsville, New Jersey. “People have
seen their retirement funds affected by what’s happened and are
concerned about putting more capital in.”
GM fell 16 percent to $4.11. Chrysler LLC executives are
also considering a pre-arranged bankruptcy filing, a person
familiar with the companies’ internal discussions said.

‘Immediate’ Need

GM, Chrysler and Ford Motor Co. today renewed their plea for
a combined $34 billion in federal aid as a deadlocked Congress
showed no progress in deciding how to aid them. GM Chief
Executive Officer Rick Wagoner said his company needs an
“immediate” $4 billion, and $4 billion more next month.
Ronald Gettelfinger, president of the United Auto Workers
union, told a Senate panel today that GM may fail this month
without a cash infusion.
Southwestern Energy, an oil and natural gas producer, fell
15 percent to $26.34 as all 40 energy companies in the S&P 500
retreated. EOG Resources, the former oil and gas unit of Enron
Corp., slid 14 percent to $68.79. Exxon, the world’s largest oil
company, lost 3.4 percent to $76.27.
Crude oil tumbled 6.8 percent to $43.59 a barrel in New
York, the lowest price since January 2005. It has plunged 70
percent since the closing record of $145.29 set in July and may
fall below $25 next year if the recession that’s slashing fuel
demand around the world spreads to China, Francisco Blanch,
commodity strategist at Merrill Lynch, wrote in a report today.

First Drop Since 2001

Apple, maker of the iPhone mobile device as well as iPod
music players and Macintosh computers, fell 4.7 percent to
$91.41. Finland-based Nokia, the largest maker of mobile phones,
forecast the first drop in industry sales since 2001 and lowered
its estimate for industry revenue in the current quarter.
Global smartphone sales growth slowed to 11.5 percent in the
third quarter from a year earlier as consumers postponed
replacement purchases, research firm Gartner Inc. said today.
Research In Motion Ltd., the maker of the BlackBerry, said this
week that quarterly subscriber gains fell short of its forecast.
Wal-Mart Stores Inc. gained 1.3 percent to $55.11. The
world’s largest retailer said November sales exceeded its
projection, spurred by discounts on groceries, consumer
electronics and Christmas decorations.

‘Good Sign’

“Consumers are still responsive to price; that’s a good
sign,” said Julie Van Cleave, who oversees $3 billion, including
Wal-Mart shares, at Deutsche Bank AG unit DWS Investments in
Milwaukee. “They’re going to fewer stores but making larger
purchases.”
Other chain stores rallied on November sales that beat
estimates. Nordstrom Inc., the U.S. department store operator
with more than 100 namesake locations, jumped 10 percent to
$12.01. Office Depot Inc. added 15 percent to $2.17. Macy’s Inc.,
the second-biggest department store, climbed 6 percent to $7.83
after affirming its fourth-quarter sales forecast.
Homebuilders gained amid reports the Treasury Department is
considering stepping up purchases of mortgage-backed securities
to drive rates on some loans down to 4.5 percent. The average
rate on 30-year fixed-rate loans dropped to 5.47 percent last
week, the lowest level since 2005, according to the Mortgage
Bankers Association.
D.R. Horton Inc., the largest U.S. homebuilder, advanced 8
percent to $7.82. Lennar Corp. added 10 percent to $8.50. Centex
Corp. climbed 9 percent to $11.10. An index of homebuilders in
the S&P 500 rose 6.6 percent to the highest level in a month.

Falling Sales

Merck & Co. dropped 5.5 percent to $25. The company said
2009 profit may decline amid falling sales of its Zetia and
Vytorin cholesterol pills and weak international revenue.
Adobe Systems Inc. lost 9.3 percent to $20.44. The world’s
largest maker of graphics and Web-design software forecast sales
that missed analysts’ estimates, saying the economy has crimped
spending. Adobe also plans to cut 600 jobs, amounting to about 8
percent of its staff.
The Labor Department said today that 4.09 million fired
workers received government unemployment checks in the week ended
Nov. 22, the most since December 1982 and more than economists
estimated in a Bloomberg survey. Data to be released tomorrow are
forecast to show U.S. payrolls shrank in November for the 10th
straight month, sending the unemployment rate to 6.8 percent, the
highest since 1993.

AT&T, DuPont Cuts

AT&T Inc., the largest U.S. phone company, and DuPont Co.,
the third-biggest U.S. chemical maker, said they will cut jobs to
lower costs as the recession erodes profit.
AT&T lost 3.1 percent to $28.17. The company plans to cut
12,000 jobs, or about 4 percent of its workforce. DuPont rose 0.3
percent to $23.69 after saying it will cut about 2,500 jobs
because the global recession is cutting demand for products such
as auto paint and Tyvek weather wrap.
“Businesses are battening down the hatches,” Stuart
Hoffman, chief economist at PNC Financial Services Group Inc. in
Pittsburgh, said in Bloomberg Television interview. “Job losses
are going to continue to accelerate.”

For Related News:
Stories on U.S. stocks: NI USS <GO>
Stories on U.S. stock options: NI USO <GO>
Feature stories on stocks: TNI STK GREET <GO>
Risk & compliance news: RCLR <GO>

--Editors: Nick Baker, Chris Nagi


 

singveld

Alfrescian (Inf)
Asset
how did will this recession go?

can anyone gave good advice on how to survive the crisis, rather than talking about bad news everyday.
 
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