Housing Bust? Here’s What Fannie Mae Says…
Stocks were lower on a spike in crude oil.
Prices traded to a new record high of $59.37. The Dow snapped a 7-day winning
streak.
Leading indicators for
May fell 0.5% to 114.1; analysts were expecting a drop of 0.2%.
CarMax
(
KMX |
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PowerRating) missed by 0.02 and guided lower.
Wyeth
(
WYE |
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PowerRating) is trimming its sales force–by up to 30% by year-end.
Google
(
GOOG |
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PowerRating) plans to unveil an online payment system similar to
eBay’s
(
EBAY |
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PowerRating) widely used PayPal. Revenue is generated by taking a
small piece of each transaction. For Q1, PayPal generated 23% of eBay’s Q1
revenue. Details of the planned Google service are not known.
Boeing
(
BA |
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PowerRating) lost a $6 billion order from Air Canada after pilots
rejected a cost-cutting deal.
Fannie Mae said that the possibility of a housing bust has “risen
sharply in certain parts” of the U.S. The Wall Street Journal reported on a
presentation given on May 5 by Fannie Mae’s Thomas Lawler at the National
Association of Home Builders. Lawler said several lending patterns over
the past year are reminiscent of those seen in the late 1980s, among them:
increased investor buying, “unrealistically high consumer expectations” that
prices will rise, “creative, riskier financing” for homes and more adjustable
rate mortgages.
The Dolans want to take Cablevision
(
CVC |
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PowerRating) private in a deal worth
$7.9 billion. Shareholders would get $21 for each Cablevision share as well as
shares in Rainbow Media Holdings.
Former Adelphia Communications CEO John Rigas was sentenced to 15 years in
prison.
Trader talk: with $60 oil, will the street cut GDP forecasts?Â
Will consumers cut back on spending and what will the impact be on retailers?
Strong sectors were:Â Airlines
(
$XAL.X |
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PowerRating)
+1.22%Â Â Â Â Biotech Â
(
$BTK.X.X |
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PowerRating)
+0.79%Â Â Â Â Â Â Software
(
$XAL.X |
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PowerRating) +0.28%Â Â Â Â
    Â
Weak sectors were: Â Â Â Gold
(
$HUI.X |
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PowerRating)
-2.61%Â Â Â Homebuilders
(
$HGX.X |
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Chart |
News |
PowerRating)
-1.69%Â Â Â Â Chemicals
(
$CEX.X |
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Chart |
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PowerRating) -1.15%Â Â
| Dow | -14.12 | 10,608.95 |
| Nasdaq | -1.96 | 2088.15 |
| S&P 500 | -0.92 | 1216.04 |
The dollar was +0.76 at
88.49
Crude Oil was +0.90 at
59.37
Gold was -1.00 at 437.50
1.42 billion on the Nasdaq.
Market breadth was negative.
| NYSE | Issues | |
| Advancing | 1384 | Up Vol 762 |
| Declining | 1904 | Down Vol 741 |
| 1.36 | 1.02 | |
| Nasdaq |
||
| Advancing | 1322 | Up Vol 690 |
| Declining | 1699 | Down Vol 619 |
| 1.28 | 1.11 |
Stocks in the News
Prudential upgraded Colgate
(
CL |
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PowerRating) to overweight from neutral.
Bloomberg reports that the dollar rise may hurt earnings at multinational
companies, such as McDonald’s
(
MCD |
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PowerRating) and Colgate
(
CL |
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PowerRating).
Transkaryotic Therapies
(
TKTX |
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PowerRating) and Shire reported positive Phase
III trials on its Hunter syndrome treatment.
General Motors
(
GM |
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PowerRating) was upgraded at Bank of America to neutral.
Brice Wightman