Posted on 08/12/2002 4:26:42 PM PDT by Lazamataz
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Market WrapUp for the Week
Monday l Tuesday l Wednesday l Thursday l Friday
Monday, August 12, 2002 Market WrapUp
August Doldrums
With the exception of the seventh largest airline, US Airways Group, declaring bankruptcy over the weekend, today was a fairly uneventful day in the market. After trying everything from voluntary concessions from unions and cutting costs wherever deemed appropriate, US Airways was unable to avoid bankruptcy. Other airlines suffered as a result of the announcement.
After last weeks rumors of a rate cut during tomorrow's Fed meeting, today was led mostly by the lack of expectations for such a cut. Resulting in the broader indexes spending most of the trade session in the red, with the only strength coming in the last two hours of trading. Tomorrow will most likely show that last week's rumors were simply another way for the big brokerages to falsely inflate the market in order to remove themselves from some losing positions.
Retail companies were also a weak in todays session with concern that consumers may slow their spending. Consumer stocks accounted for 35 percent of the S&P 500s decline today. Retailers including Wal-mart, Target and Kohls were all sold off.
Strength in the market was in the oil and oil service sector as the price per barrel of oil jumped $1.00 amid growing tensions in the Middle East. Utility, natural gas and biotech issues also headed north.
Financial Markets
The Standard & Poor's 500 Index fell 4.84, or 0.5 percent, to 903.80, with financial shares contributing 40 percent of the drop. The Dow Jones Industrial Average shed 56.56, or 0.7 percent, to 8688.89. Only five of the 30 Dow stocks rose. The Nasdaq Composite Index gained 0.72, or 0.1 percent, to 1306.84, wiping out a 1.5 percent decline. Rising and falling stocks were about even on the New York Stock Exchange. Some 1.03 billion shares traded on the Big Board, the fewest for a full-day session since May 28.
Treasury Markets
The 10-year Treasury note added 11/32 to yield 4.215 percent; while the 30-year government bond rallied 21/32 to yield 5.07 percent.
© Copyright Scott Middleton, August 12, 2002
I flew them ONCE in 1988. Never again.
Interesting turn of phrase, seeing how full of...er, uh...stuff, yeah, that's it, stuff...most of them are.
But then, what sector isn't suffering, except to some extent the precious metals - and it remains to be seen if they can hold up and go bullishly on the offensive again? From a fast start this morning, they got pounded back pretty good. There seems to be a lot of big, tough guys from JPM, GS - or from somewhere - standing in the door and keeping them scattered, bloodied and prostrate outside in the dusty street.
Analysts said United could still file for bankruptcy by the end of the year without significant changes that would almost certainly include rolling back some of the hefty raises it negotiated recently. Like US Airways, the majority employee-owned airline would likely continue to operate while reorganizing its operations. Shares in UAL Corp., parent of United Airlines, fell another 19.7 percent in early trading Tuesday after a 27 percent drop the previous session. The stock was down 75 cents to $3.05 a share on the New York Stock Exchange, pressured by not only American's new plan but a rare "sell" order by a leading analyst. Respected industry analyst Sam Buttrick of UBS Warburg, while bullish on other airline stocks, called bankruptcy "increasingly difficult to avoid" for UAL and said the company appears dependent on government-guaranteed funding a requested $1.8 billion federal loan guarantee that may not be forthcoming.With US Airways in bankruptcy, many are wondering if United Airlines might be next. United has implemented a financial recovery plan to stem losses from the terrorist attacks, but the nation's No. 2 carrier faces several obstacles along its road to recovery, including high labor costs and losses of more than $1 million a day.
From the looks of their stock, they are approaching penny stock prices...
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