U.S. Markets:
Dow -315.79 (-2.51%)
Nasdaq -60.09 (-2.58%)
S&P 500 -37.05 (-2.71%)
News That Moved the Market:
Weak Finish To a Weak a Month. The markets drifted lower the whole session, with 97% of the S&P 500 finishing with losses. AIG (AIG, -6.6%) sparked the sell-off late Thursday after announcing it lost $5.29 billion in its fiscal fourth quarter as a result of massive writedowns, and said it would not buyback any of its shares for the "foreseeable future." Stocks fell further after CNBC reported the Ambac (ABK, -5.6%) bailout had hit a significant snag. Rating agencies want the banks involved to inject more money than originally proposed. The deal is still not dead, but it was only fair that the market fall on the news after it rallied on the announcement of the deal late l ast Friday. For the month, the S&P 500 fell 3.5%, the Dow finished 3.0% lower, and the Nasdaq dropped 5.0%.
Mixed Economic Data. The Personal Consumption Expenditure indicator increased 0.4% while income rose 0.3%, both figures coming in slightly higher than expected. Core PCE was right in-line. Though this was good news, the markets moved little after it was released. The Chicago Purchasing Managers Index was announced just after the opening bell and disappointed investors, posting a reading of 44.5, well below the 49.5 expected and representing a contraction in manufacturing in the region.
Northrop wins Massive Government Contract Boeing Gets Snubbed. The Air Force announced it will use Northrop Grumman Corp. (NOC, -1.7% day; +5.3% A.H.) and EADS (an Airbus unit) to build new airborne fuel tankers, in a deal worth at least $35 billion. Additional needs such as maintenance and additional parts could add another $60 billion to the deal, making it one of the largest defense contracts ever. Most experts were expecting Boeing (BA, -2.4% day; -5.6% A.H.) to win the deal. Boeing is now expected to file a protest with the Government Accountability Office; the government did not say why Boeing was not chosen.
Quick Tics:
The Gap (GPS, +3.7%) was up after reporting a 21% increase in net income. Warren Buffet released his popular annual letter to shareholders Friday, noting "the party is over" for insurance companies and lenders should be admonished for fueling the housing bubble.
Monday's Notable Earnings:
Midway Games(MWY) After Close
Economic Events:
10:00 AM: Construction Spending
10:00 AM: ISM Index
Saturday, March 1, 2008
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