For anyone who had an observant eye on the NYSE today, it was an incredible morning.
When the market was first opened, many stock literally plunged down to the bottom before starts to pick up again, particularly the stocks that were heavily related to Asian stock markets, which performed worse than poor yesterday.
One of the examples is PetroChina:
Overall, NYSE performed worse than expected today, and here is the quotes from Bloomberg:
The S&P 500 capped the longest losing streak in almost a year, retreating 14.69 points, or 1.1 percent, to 1,310.5. The Dow Jones Industrial Average decreased 128.11, or 1.1 percent, to 11,971.19, its first close below 12,000 since November 2006. The Nasdaq Composite Index lost 47.75, or 2 percent, to 2,292.27. About five stocks declined for every four that rose on the New York Stock Exchange.
All these were signalling that US, and the rest of the world, is going towards another major economical recession today.
It may be a great time to enter the market, when the prices of all stocks are so low, but when NYSE has performed so poorly today, the impact is definitely going to be larger than previously expected.
However, note that the financial companies have performed well today, with MBIA Inc. being the largest gainer in the market today as a result of the possible victory over the credit downgrading case. In fact, MBIA has a target profit of close to 90%.
Attached is an article from CNN about MBIA.
MBIA shares rally; Barron’s says company ‘isn’t nearly as troubled as Ambac’
January 22, 2008: 10:22 AM EST
BOSTON, Jan. 22, 2008 (Thomson Financial delivered by Newstex) — Shares of mortgage-backed securities insurer MBIA Inc. (NYSE:MBE) (NYSE:MBI) rallied Tuesday after Barron’s, a financial investment news provider, wrote that it finds the current price levels of MBIA’s debt, credit-default swaps, and even it stock to be ‘absurdly’ low.
The stock jumped 26% to $10.72 on volume of 5.1 million. As of Friday’s $8.55 closing price, shares of the bond-insurer were down roughly 54% year-to-date.
‘For one thing, MBIA isn’t nearly as troubled as Ambac because it has far less exposure to really-troubled subprime paper,’ Barron’s said. ‘Also, MBIA has already completed raising, or locked in commitments for the additional capital demanded last month by Fitch and the other rating agencies.’
Barron’s noted that MBIA’s AAA rating seems to have ‘passed muster’ with both Fitch and Standard & Poor’s (NYSE:MHP) even after the latter ran a new stress-test on MBIA’s 2006-vintage subprime exposure using the 19% cumulative default rate.
‘Without Ambac competing for new business, MBIA and other bond-insurer survivors should be able to grow faster and strike more attractive insurance deals,’ Barron’s concluded.
Greg Saulnier
Copyright Thomson Financial News Limited 2007. All rights reserved.