Skip navigation
Watchlist Sponsored By :


Current DateTime: 08:24:08 14 Nov 2009
LinksList Documentid: 33482595

Current DateTime: 08:24:08 14 Nov 2009
LinksList Documentid: 24355697

FEATURED QUIZZES


Current DateTime: 08:24:08 14 Nov 2009
LinksList Documentid: 33793611
  • The Billionaire BFF's

      Philanthropists. Bridge partners. Hockey players. Which responses are based on facts from Buffett's and Gates' real lives?

  • The Many Myths of Coca-Cola

      Can you tell which statements are true, and which ones are just rumors?

  • Think You Understand Markets?

      We've selected some questions from the Financial Industry Regulatory Authority's test of investor knowledge. See how you do ...


Current DateTime: 08:24:08 14 Nov 2009
LinksList Documentid: 24890560
  • Winterizing Your Portfolio

      If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.

  • Investor's Guide to Real Estate

      Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.

  • Alternative Investing

      Stocks and bonds? Sure. But it's a big world out there for investors.

powered by digg
By: Jeff Cox, , Special to CNBC.com | 02 Jan 2008 | 03:01 PM ET
Text Size

Stocks had one of their worst opening days ever after getting slammed by $100 oil and bad news for manufacturing and the credit industry.

The Dow Jones Industrial Averaged plunged about 220 points, one of the biggest declines ever on the first trading day of the year. The Nasdaq and S&P 500 also had one of their worst opening days.

Major U.S. Indexes
Loading...
Loading...
Loading...

Before the market opened for the new year, the Institute for Supply Management said manufacturing contracted in December. Then, oil prices soared to $100 a barrel and private home building hit its lowest level in years.

The market briefly backed off its lows for the day after minutes from the Federal Reserve's December meeting suggested the central bank could be leaning towards an interest rate cut. But stocks quickly fell again when oil, which had retreated from its daily high, made a U-turn back up and closed at $99.64.

"I don't know whether institutions are repoisitioning themselves at the start of the year, or if there's some tax aspect to it," said David Twibell, president of wealth management at Denver-based Colorado Capital Bank. "Obviously we had some really ugly numbers out of the ISM, which told us nothing we didn't already know."

Stocks also were influenced by analyst downgrades in the financial industry and computer chipmakers.

Punk Ziegel analyst Richard Bove lowered his Citigroup [C  Loading...      ()   ] outlook for 2007 and 2008, and CNBC reported earlier that the bank would begin laying off up to 10 percent of its employees starting next week.

Sanford and Bernstein analyst Howard Mason wrote in a Dec. 31 report that Citi may need to write down $12 billion of debt and boost reserves for bad loans by $1 billion. Mason also said Bank of America [BAC  Loading...      ()   ] and JP Morgan Chase [JPM  Loading...      ()   ] may have respective fourth-quarter writedowns of $5.5 billion and $1 billion.

"We are trimming our estimates for the fourth quarter of 2007 and 2008 to account for capital markets write-downs, loan loss reserve building, slower net interest margin re-normalization in 2008 and reduced buyback activity," Mason wrote.

In more bad news for financials, National City [NCC  Loading...      ()   ], one of the 10 largest U.S. banks, said it will cut its common stock dividend 49 percent and eliminate 900 jobs as it stops offering mortgages through brokers, and it plans to raise more capital to cope with weakened credit markets. Shares of the lender tumbled.

The day's developments rekindled recession fears, and traders were not assuaged by the minutes from the latest Federal Reserve rate-cutting meeting, which showed the central bank's board to be divided over the wisdom of dropping borrowing costs.

"I think the market, regardless of what they Fed says, is going to be looking for the Fed to ease at their next meeting and even contemplating a 50-basis-point move rather than a 25," said Mike Englund of Action Research.

Oil [US@CL.1  Loading...      ()   ] soared more than $3 a barrel on renewed violence in oil exporter Nigeria and expectations of further declines in U.S. crude stocks, reviving worries of tightening supplies. Shares at energy companies were mostly higher.

Amazon, Qualcomm in View

Analyst upgrades at Amazon [AMZN  Loading...      ()   ] and Yahoo! [YHOO  Loading...      ()   ] sent those shares their higher, but Intel [INTC  Loading...      ()   ] slipped after Bank of America cut its rating on the chipmaker and seven of its peers, a group that was leading losers on the S&P. Advanced Micro Devices [AMD  Loading...      ()   ] and Texas Instruments [TXN  Loading...      ()   ] also headed to the downside.

Qualcomm [QCOM  Loading...      ()   ] shares were under pressure, after the wireless chip maker said it is evaluating options including stays and appeals after a federal judge in California ruled on Monday the company must immediately stop selling third-generation, or 3G, WCDMA cellular chips that are seen to infringe on  patents of rival Broadcom [BRCM  Loading...      ()   ].

Downgrades also zapped the retail sector, with BJ's Wholesale Club [BJ  Loading...      ()   ] falling to "neutral" from "overweight" in a move from JP Morgan analyst Charles Grom.

© 2009 CNBC.com
Tools:
Print EmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
  • Brian L. Roberts
  • For the chief of cable company Comcast, growth has been about making deals – generally very large deals.
  • Some companies may start using insurance to shift carbon risk from their balance sheets to maybe... yours?
  • The president and founder of Genesis Today wants to improve America’s health, and thinks Wal-Mart can help.
  • Switzerland's privacy watchdog is taking legal action to force Google to make changes to its Street View service.
  • A wealthy, distracted Texas driver crashed his million-dollar Bugatti Veyron sports car into a salt marsh, say police.
ADD COMMENTS
Remaining characters


Current DateTime: 01:03:47 14 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:02:29 14 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 01:02:29 14 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:02:29 14 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters