The Buyers Strike Back

Who knew that the beginning of the winter holiday shopping season was not just limited to retail? Stocks followed up on their bullish Black Friday with a sharp rally in the final week of November. The Dow, for one, was up for three or more days in a row for the first time since September. Retailers, especially those with significant online presences, saw shoppers more than eager to open their wallets for bargains as discounts and special offers used to entice consumers late last week spilled over into this week.

But the only buyers weren't retail consumers. From the Gulf Emirate of Abu Dhabi's decision to buy 4.9% of Citigroup (C@C | Quote | Chart | News | PowerRating) to Citadel Investment Group's move to invest an additional $2.5 billion in online discount brokerage E-Trade (ETFC@ETFC | Quote | Chart | News | PowerRating), buyers of all kinds found bargains among the smacked down and beaten up financial shares. Banks twice led rallies over the past week, even as Wells Fargo (WFC@WFC | Quote | Chart | News | PowerRating) joined the ranks of those financial institutions having to write off billions--$1.4 billion for Wells Fargo -- due to mortgage-related losses (home equity loans in the case of Wells Fargo).

Fed Shifts Toward Rate Ease

When Federal Reserve Board Vice Chairman Donald Kohn suggested that the Fed should be prepared to do what it takes to help alleviate "stresses" in the short-term funding market, many observers wrote off his comments as more of the same from a well-known rate "dove." Never mind that the markets responded positively to Kohn's comments. "Nothing new here," was the attitude from many.

You can't help but wonder what these wise guys are saying now, with Federal Reserve Board Chairman Ben Bernanke's remarks in a speech on Thursday. Bernanke, who seemed to spend much of the past few months lowering the market's expectations of rate cuts, admitted that monetary policy needed to be sensitive to the recent "market turbulence", an admission that was widely believed to open the door to a rate cut in December. Some have suggested that Bernanke's comments could be extended even further, saying that Bernanke was also signaling that rate cuts beyond the December meeting would also be considered if necessary.

Bailout for Subprime's "Little Guys?"

What would be a fitting end to a week that saw traders and investors, big and small, regain some measure of confidence that the American economy -- which grew a blistering 4.9% in the third quarter -- was in fact not going over the falls in a barrel? How about a deal between the White House and mortgage lenders to keep those low, introductory rates that brought in homebuyers by the droves intact for an additional few years?

The plan, which is almost complete, is geared specifically toward the problem of adjustable-rate mortgage resets. These resets are scheduled to begin over the next several months and will dramatically increase the interest rates that many recent homebuyers will have to pay. Wary of the potential for even more foreclosures as homebuyers find themselves unable to meet the additional monthly mortgage costs, banks and mortgage companies such as Citigroup, Wells Fargo, Washington Mutual (WM@WM | Quote | Chart | News | PowerRating) and Countrywide Financial (CFC@CFC | Quote | Chart | News | PowerRating) have pledged to follow whatever agreement is reached between themselves and Treasury Secretary Paulson, who is the White House's point man in the negotiations. Eligibility for the rate freeze program is still to be decided. The freeze could last as long as seven years according to one version of the plan.

Stocks in the News
Retailers and tech companies join banks, brokerages and mortgage companies among those companies whose stocks made the news this week.

Ebay (EBAY@EBAY | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 6. Cyber Monday could not have been much more bullish for retailers, following a Black Friday in which Ebay was the most visited e-commerce website on the Internet.

Dell (DELL@DELL | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 6. Not satisfied with Dell's ability to meet earnings expectations, investors focused on a cautious outlook going forward, sending shares of Dell sharply lower.

Motorola (MOT@MOT | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 7. Motorola issued a profit warning late in the week as the company announced the departure of CEO Ed Zander effective January 1.

Deere (DE@DE | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 6. Shares of Deere hit a 52-week high this week in the wake of 50+% surge in Q4 earnings.

E-Trade (ETFC@ETFC | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 2. Battered early in the week, E-Trade was the beneficiary of a sizable infusion of capital from Citadel Investment Group.

Circuit City (CC@CC | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 4. Electronics retailer was among the big winners following a bullish Cyber Monday, as shoppers took advantage of online bargains at the beginning of the winter holiday shopping season.

Citigroup (C@C | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 6. Citigroup received a massive investment from the government of Abu Dhabi this week, which now owns approximately 4.9% of the largest bank in the U.S.

Freddie Mac (FRE@FRE | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 2. Persons familiar with the government-backed mortgage buyer claimed that its $6 billion preferred stock offering was "comfortably oversubscribed."

Sears Holding (SHLD@SHLD | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 4. Confidence in Eddie Lampert's retail/real estate strategy with Sears Holding took a hit this week with the announcement that third quarter profits were down by 99%.

What to Look for Next Week

Monday: Nov ISM Manufacturing Business Index
Tuesday: Chain Store Sales / Retail Sales Index / ABC, Wash Post Consumer Confidence
Wednesday: Q3 Revised Productivity, Unit Labor Costs / October Factory Orders, Pending Home Sales, Nov ISM Non-Manufacturing Business Index
Thursday: Initial Jobless Claims / Business Barometer
Friday: Nov Nonfarm Payrolls, Unemployment Rate / UMich Sentiment Index, Oct Consumer Credit

Best Performing Stocks (PR 8-10) of Last Five Days

Here are some of the best performing, high PowerRatings (for Investors) rated stocks of the past five days. This week, all of the listed stocks have PowerRatings of 9 or 10.

Covance (CVD@CVD | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 10

Clear Channel Communications (CCU@CCU | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 10

Manor Care (HCR@HCR | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 9

Copart (CPRT@CPRT | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 9

Coca Cola Enterprises (CCE@CCE | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 9

Worst Performing Stocks (PR 1-3) of Last Five Days

Here are some of the worst performing, low PowerRatings (for Investors) rated stocks of the past five days. This week, all of the listed stocks have PowerRatings of 1 or 2.

Beazer Homes (BZH@BZH | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 1

Casual Male Retail Group (CMRG@CMRG | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 1

Crystallex International (KRY@KRY | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 1

Novagold Resources (NG@NG | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 2

Conn's (CONN@CONN | Quote | Chart | News | PowerRating). PowerRatings (for Investors) rating: 2

David Penn is Senior Editor at PowerRatings.net