The weekend retail numbers were good, so the market started off OK (an exception was Circuit City, down 8.0%). But then came multiple banking whammies, and the Dow Jones Industrial Average slid 237 points to 12743, as 28 of its 30 components retreated.
Citigroup fell 3.15% amid news of massive layoffs. The official number is not known, but analysts said it could be as many as 45,000. I don't understand that. Citi may have lost money in sub-prime, but doesn't the work of those 45,000 people still need to get done? If not, then why weren't they laid off BEFORE the sub-prime losses? The absurdity of big business! In after hours trading, Citi dropped an additional $1.
JP Morgan Chase fell 3.55% on no particular news.
UBS downgraded both Fannie Mae (down 10.19%) and Freddie Mac (down 7.44%).
And the current news from Asia is likewise bad...
Japan is down 2.1% (both Topix and Nikkei indices). Hong Kong's H-share index is down 3.4%. Seoul's Kospi index was down 2.7%.
Tomorrow is going to be a bad day on Wall Street.
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2 comments:
Wow, good thing I don't make a living predicting the market.
Abu Dhabi injected some cash into Citi which boosted its stock (despite the fact that because of a mandatory conversion clause in the bond issue all Citi has done is sell stock to Abu Dhabi at an 11% discount), and apparently Citi pulled up the rest of the market with it.
DJIA +215 for the day, almost making up Monday's losses
Details on the Abu Dhabi deal for those who are interested...
Citi has reached an agreement to sell equity units, with mandatory conversion into common shares, in a private placement to the Abu Dhabi Investment Authority in the amount of $7.5 billion. ADIA's aggregate ownership in Citi's common shares, including the conversion of these Equity Units, will total no more than 4.9% of Citi's total shares outstanding.
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