As suspected, Freddie Mac is floating stock. Offering $6 billion in preferred stock, but the bigger story is they are cutting their dividend 50% to 25 cents....and the stock is down fractionally.
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For the last two weeks, it hasn't mattered if the market is up, down, or flat going into the last hour; the prevailing trend has been to attempt to sell the market toward the end of the day, even if the market ends positive.
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Abu Dhabi's $7.5 billion capital injection into Citi--that's 4.9% of the company--contains a stunning figure: a mandatory convertible that pays 11% yield (Citi currently has a 7.1% dividend yield)! That, as many have observed, is above the average yield for junk bonds, currently about 9%.
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The "credit crunch" is the main story today and for the foreseeable future. Fannie Mae and Freddie Mac are again dropping -- both down nearly 8% again. Freddie has already said it may need to raise more capital and may have to cut its dividend. Fannie hasn't said that, but it sure is trading that way.
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Early morning rally fading as financials, retail and energy lead the markets lower. Retail reports very mixed. Shoppertrak said sales at 50,000 outlets up 8.3% more than expected. Everyone agrees electronics sales have been strong, but past that it is a little murky.
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Asian markets up nicely here -- Korea and Hong Kong up over 4% -- mostly on reports of a decent start to the Christmas season. Europe flat. The state of retail is what desks are talking about. ShopperTrak, which tracks sales at more than 50,000 retail outlets, and MasterCard Advisors said sales were up 8.3% and 5%, respectively. That was a tad more than many expected--one analyst at RBC Capital Markets said that they were "frankly a bit surprised at these results given our traffic observations."
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At last, some good news after the bell! Hewlett Packard beat estimates and is up 2% (they also announced an $8 buyback), but even more important was Nordstrom. They beat earnings estimates by 7 cents and, more importantly, did not lower fourth quarter guidance AND guided 2008 above expectations.
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Markets at the close ending at the lows again. Fourth 200 point decline in the Dow this month. More than 300 stocks at the NYSE hit new lows today, the highest level since the August lows. Technicals have now become very important, with the S&P slipping below last week's low.
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Direct from the floor of the NYSE, Trader Talk with Bob Pisani provides a dynamic look at the reasons for the day’s actions on Wall Street. If you want to go beyond the latest numbers— Bob will tell you why the market does what it does and what it means for the next day’s trading.
A CNBC reporter since 1990, Pisani reports on Wall Street and the stock market from the floor of the New York Stock Exchange. Follow him on Twitter @BobPisani.