Yesterday was chock full of news, much of it embellished by the players and
by media to turn lemons into lemonade. The day started out well, but as I wrote
at the beginning, it’s the closing that matters, and the close was weak. Reality
had set in.
The Carl Icahn intervention in the potential Yahoo-Microsoft combination was
settled in Icahn’s favor for now, but at the end of the day, Microsoft appears
to be the winner in that a new bid in a Bear market will come on their terms and
Yahoo’s founder/CEO Jerry Yang
will get discarded by shareholder pressure.
The Bank of America
(BAC) followed Citigroup (C) with lousy results but we got the expected
la-la land hype that their future looks rosy, and that the Countrywide
acquisition will be earnings accretive this year. How could they know that when
nobody yet knows the extent of Countrywide losses?
American Express (AXP) has been trashed in the after-market and in the German
market today after missing badly on earnings estimates and guiding negatively.
Extra write-downs… wealthy client spending hit the wall in June… earnings no
longer tracking nicely… tough operating conditions… these are the
words from the American Express CEO.
Switzerland's well-managed Roche Holdings (OTC
ADR:RHHBY) has offered to buy the 44% of world leading biotech firm Genentech (DNA)
that it doesn't already own. The $43.7 billion proposal highlights the need by
the big drug companies to build their product pipelines.
But the Wall
St Journal reported that the bid blindsided Genentech and is a potential
threat to the delicate relationship that exists between the two companies.
Today, Wachovia
Bank, the 4th largest in the US, badly missed earnings estimates of
-$0.78/share when they reported a loss of -$8.9 billion (-$4.20/share). So,
yesterday’s hype from the other banks will be taken down by Wachovia and
American Express. The DJIA futures are down over -100 points at 7:45am ET.
Yesterday, the DJIA (-29.93 -0.25% to 11467.34), S&P 500 (-0.68 -0.05% to
1260.00) and NASDAQ Composite (-3.25 -0.14% to 2279.5) were down a bit, but
after a large rally at the open, most of the day was selling, in quiet volume.
The Toronto Composite was up +1.28% to 13689, but the Toronto Venture board was
down -0.48% to 2288.
Earlier today, the Asia-Pacific markets were mixed.
