Crude Oil Unable to Save Markets
Even
tumbling crude oil couldn’t save the market from the bears today,
as the Dow fell under 10,000 and the Nasdaq remained precariously above the 2000
level. Crude oil fell down 89
cents to $18.15 a barrel on the New York Mercantile Exchange as traders
speculated that OPEC will not be able to talk producers outside the cartel to
reduce exports enough to compensate for dwindling demand. Today’s fall puts
crude oil 36% less than this same time a year ago and several analysts are
projecting demand to continue to fall next year.
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Not
surprisingly, Compaq
(
CPQ |
Quote |
Chart |
News |
PowerRating) is taking a hit
today, as Wall Street reacts to the almost certain cessation of Hewlett-Packard’s
(
HWP |
Quote |
Chart |
News |
PowerRating) $25.4 billion buy-out of the computer maker. CPQ is trading down
$1.25 to $10.07, while HWP,
a winner in after-hours trading Friday, is reversing those gains and is now down
$.57 to $22.95.
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HWP’s
embattled Chief Executive Officer Carly Fiorina could probably hear the fat
lady offstage warming up when the David & Lucile Packard Foundation, owner
of 10.4% of the stock in Hewlett-Packard, announced they would vote against the
acquisition. This leaves CPQ in the unenviable position of facing Dell
(
DELL |
Quote |
Chart |
News |
PowerRating) and the
future alone, at least for now. I think this move puts Michael Dell
significantly closer to his goal of 40% of the world pc market share.
“We are now more competitive than ever, and we have a 13% market
share,” Dell said back in April when his firm took over the top spot from
Compaq. “We would one day like to have 40%.”
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CPQ
options are among the most active on three of the five options exchanges, and we
anticipate arbitrage unwinds and speculation as to future moves will keep
volatilities high for the foreseeable future.