407,000 initial jobless claims is the highest sincethe 425,000 reading of Sept 16, 2005. Disappointing. Futures dropped 8 points, bonds rallied.
Continuing concerns over writedowns of European banks caused a brief rally in the dollar, but the poor jobless claims has taken much of the gains out.
1) Is the decline in Chinese stocks ending? Hong Kong's Hang Seng index has finally broken a downtrend that began back in November. The Shanghai index, which has been in a freefall since January (down 40 percent or so), which is just off its lows, had one of its best days in a while, up about 3 percent.
2) With all this talk of reform in Washington, where is the proposed FHA expansion that everyone was talking about a few weeks ago, which Barney Frank referenced? It seems to have disappeared. There was significant stimulus in the plan.
1) Micron reported earnings a bit below expectations. Average selling prices were down for both NAND (flash memory chips--down 30 percent) and DRAM (down 15 percent). Despite that, Goldman upgraded the stock, saying DRAM fundamentals would improve later in the year. Up 5 percent.
2) Ruby Tuesdayreported earnings a bit above expectations, and like most restaurants talked about the lower spending by consumers and the emphasis on controlling costs. They tightened full year estimates to $0.40-$0.50 from $0.40-$0.60.
3) Constellation Brands beat, and guided for fiscal 2009 of $1.68-$1.76 (analyst estimate $1.67).
National City said on Tuesday that they were exploring strategic alternatives, essentially acknowledging that they are for sale. But what is it worth? Even a modest premium would be good news for the beleaguered banking business. Today, Morgan Stanley said they thought it was worth $12 as an acquisition candidate. That's about 25 percent above the $9.22 price it closed at. They upgrade the stock, as does Bear Stearns.
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