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Today's Market Update with...
Ron Romaine, Value Line's Senior Industry Analyst
July 11, 2008 - 4:59 PM ET
Stocks are mixed and interest rates jump on heightened oil and credit fears.
At the close today, four of the five major US stock market indexes had followed counterparts around the world and fallen; the sole exception was the Russell 2000 small cap index, which rose over 4 points, to 674. The Dow Jones Industrials lost 128, to 11,101; the S&P 500 was down 14, to a two-year low of 1239; the NASDAQ Composite had given up 19, to 2239; and the Value Line arithmetic index, the sole equally weighted benchmark, was at a 12-month low of 1916, off 11 points today. Leading the Dow's drop were CVX (CVX), Boeing (BA), JPMorgan Chase (JPM), and American International (AIG), down 3.8% to 4.2%. General Motors (GM) and Caterpillar (CAT) rose 2.4% and 2%, respectively. Amid fears for their survival, S&P members Fannie Mae (FMN) and Lehman Brothers (LEH) tumbled 22% and 16%, respectively, while Anheuser Busch (BUD) rose over 8% on hopes for a takeover by InBev at $70 a share. NASDAQ losers featured Infosys (INFY), United Airlines (UAUA), Baidu (BIDU), and Teva (TEVA), retreating 7.1% to 13.3%. Wynn Resorts (WYNN), Steel Dynamics (STLD), Activision Blizzard (ATVID), and Biogen Idec (BIIB) advanced 2% to 11%.
Adding to concerns for the capital markets if Fannie Mae and/or Freddie Mac were to need help to survive, the near-month crude oil contract hit another high, at $147.27 a barrel, before closing up over 2%, at $145.08. Beside continuing tension in the Middle East over Iran's nuclear program and its threat to block the Strait of Hormuz, oil supplies are threatened by violence in Nigeria and a possible strike in Brazil. Gold rose 2%, to $960.60 an ounce.
Interest rates jumped 10 to 13 basis points, despite the bad news, to 3.94% for the 10-year Treasury note and 4.52% for the 30-year bond.
Have a safe and, if possible, pleasant weekend.
Factual material is obtained from sources believed to be reliable, but the publisher is not responsible for any errors or omissions, or for the results of actions taken based on information contained herein. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. © 2008 Value Line Publishing, Inc. RIGHTS OF REPRODUCTION AND DISTRIBUTION ARE RESERVED TO THE PUBLISHER. The Publisher does not give investment advice or act as an investment adviser. Value Line, Inc., its subsidiaries, its parent corporation and its subsidiaries, and their officers, directors or employees as well as certain investment companies or investment advisory accounts for which Value Line, Inc. acts as investment advisor, may own stocks that are mentioned on this Value Line Web site.
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