Will The Stimulus Package Work?
Day four, and more of the same. The market fell from the open today, staging
brief rallies before closing lower for the fourth time this week. The Dow
dropped 382.71 to close at 8376.49, and the Nasdaq slid 56.87, closing at
1470.93 — down 13% this week. The S&P 500 closed below 1000 for the first
time in three years at 984.51. Over $1 trillion in market value has been lost
since the terrorist attacks. Dow 7600 is the 50% retracement from the 1994 lows
to the all-time high.
While losses were broad-based, selling was especially apparent in financials,
semiconductors, retail and transportation stocks. There were more than 400
52-week lows on the day, while only a handful of highs. Strong sectors included
gold, biotech and natural gas.Â
Alan Greenspan, testifying before Congress, said that the economy
“ground to a halt” last week. Tonight, President Bush may announce a
stimulus package for the ailing economy.
Weakness in the economy was further evidenced by slowing housing starts,
falling 6.9% in August, while building permits fell to 0.7 percent.
Walt Disney
(
DIS |
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PowerRating) fell as much as 15% as Texan Sid Richardson Bass sold
135 million shares at $15 to meet a margin call. Disney itself picked up 50
million shares in the deal brokered by Goldman, Sachs. DIS fell to its lowest
level in six years, closing at 16.90, down 1.60.  Â
Airlines, continuing to feel the heat, have cut more than 98,000 jobs since
Saturday, and the Bush administration is asking Congress to approve a $5 billion
aid package. The stocks continue to be under pressure, with American
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at 18.55, down 1.45, United
(
UAL |
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CAL |
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closing at 13.90, down 3.56. American last night warned of lower earnings going
forward. Moody’s cut the debt rating of Alaska Airlines
(
ALK |
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1.56 to 19.10, and Northwest Airlines
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NWAC |
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Boeing
(
BA |
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CCL |
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1.66 to 9.50.
Berkshire Hathaway
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that its losses from the terrorist attacks will exceed $2.2 billion; the stock
rose 1200 to 62600.
Applied Materials
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of its workforce. The stock dropped 1.63 to 29.49.
Defense stocks continue to be strong, with Northrup Grumman
(
NOC |
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PowerRating) making
a 52-week high at 102.20.
Don’t forget, tomorrow is triple witching.