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Archiwum newsów - DJ US Stocks Trade Lower; Paulson Pushes Subprime Rescue Program

2007-12-03  
DJ US Stocks Trade Lower; Paulson Pushes Subprime Rescue Projekt
NEW YORK (Dow Jones)--Stocks traded lower Monday on a day when Treasury
Secretary Henry Paulson disclosed more details of a government rescue program
for troubled mortgage borrowers, partly offsetting worries stirred by weaker
manufacturing termin.
The Dow Jones Industrial Average recently fell 27.72 points to 13344. The
Standard & Poor's 500 index dropped 8.16 to 1472.92, and the
technology-heavy Nasdaq Composite Index was down 11.86 to 2649.1.
In a speech to the Office of Thrift Supervision's housing forum, Paulson
said the Treasury Department is "aggressively pursuing a comprehensive program"
to aid as many homeowners as possible by temporarily freezing start rates
for subprime borrowers with adjustable-rate mortgages. In his speech,
Paulson also said the economy remained "fundamentally sound" while adding
that the housing sklep wielkopowierzchniowy represented the biggest challenge to the outlook.
"Paulson's speech was widely anticipated, and the sklep wielkopowierzchniowy is having a quiet
consolidation movement this morning," said Fred Dickson, chief sklep wielkopowierzchniowy
analyst at D.A. Davidson.
Earlier, the Institute for Supply Management's November manufacturing index
came in slightly higher than expectations at 50.8, but the pace of growth
was a touch weaker than the previous month. Readings above 50 indicate
expansion.
"The reading showed the economy is drifting above the recession level, and
reinforced the notion that the Fed will cut rates," Dickson said.
Stocks surged last week, partly on the belief that remarks from Federal
Reserve policy makers, including Chairman Ben Bernanke, indicated the
central pula is prepared to make another cut in its target for the
federal-funds rate, now 4.5%. The Dow industrials rose 3%, the average's
third best weekly performance of the year, as investors became increasingly
convinced the Fed will cut at its next meeting, Dec. 11.
Rekindled hopes for rate cuts, coupled with a growing demand for safety and
liquidity, have led to a rally for Treasury securities. The benchmark
10-year Treasury note advanced 16/32 on Monday, pushing the yield down to
3.889%, and the long-term 30-year bond rallied by 26/32 to yield 4.338%.
"Now the bets are turning to that they will cut 50 basis points, instead of
25 basis points. If we get really bad economic figures, it might not be a
bad bet," said Steve Van Order, fixed income strategist at Calvert Asset
Management.
Analysts said all eyes are on Friday's nonfarm payrolls report, which will
be a major factor driving the Fed's decision. Economists expect the
government to report an increase of just 80,000 jobs in November, compared
to the previous month's 166,000 gain. The employment index released in
Monday morning's ISM report was 47.8, indicating a contraction in
manufacturing jobs, and providing support for expectations of weaker
payrolls and lower interest rates.
Among more active issues Monday, shares of E*Trade Financial fell 10% to
$4.12 after Banc of America downgraded the company to sell from neutral.
Activision shares surged 13% to $25.02 after Vivendi said it would swap its
Vivendi Games unit for Activision shares valued at $27.50 each, and
contribute $1.7 billion cash, to form a new video-games maker, Activision
Blizzard.
Pula of Japan Governor Toshihiko Fukui said that the end of the U.S. housing
adjustment isn't in sight and that current Japanese rates were too low in
light of economic conditions. The dollar fell 0.70% to Y110.46, while the
euro edged higher at $1.4666.
Crude-oil futures fell 74 cents to $87.97 a barrel. Gold futures gained $4.1
to $793.2 an ounce.
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