Thursday’s Market Recap: Stocks Fall On Continued Worries About The Overall Economy

Support levels were broken today (Thursday) as the market’s 14 month old recession continued as investors remain unimpressed by the Obama administrations economic stimulus package and mortgage relief program.  The Dow Jones Industrial average (^DJI) pushed down -1.19% to a close of 7,465.95 while the Nasdaq (^IXIC) and S&P (^GSPC) fell -1.71% and -1.20% respectively to levels of 1,442.82 and 778.94.  Gold closed the day down -$2.0 to $974.50 just as the 10-Year Note fell -25/32 closing at a yield of 2.857%.  The market fell on continued worries about the overall economy as well as the potential stability of eastern European banks, in addition to added worries on financials and technology companies.

The number of laid-off workers receiving unemployment benefits hit an all-time high marking in at nearly 5 million, and new jobless claims are at levels not seen since the early 1980s.  The Labor Department reported today that the number of people receiving regular unemployment benefits rose by 170,000 to 4.99 million for the week ending February 7, marking the fourth straight week continuing claims have hit a record high.

Prudential Financial Inc. (PRU) lost access to a federal commercial paper program today after they were downgraded by Fitch Ratings, though their main insurance unit retains the ability to sell the short-term debt.  The downgrade of their commercial paper to F2 from F1 signifies that they no longer carry a top short term debt rating from two of the three largest credit agencies, which is a requirement for participating in the Federal Reserves Commercial Paper Funding Facility.

Fidelity bought 104 million shares of Citigroup (C) in the quarter ended Dec. 31, bringing its stake in the bank to 171 million shares, or 3.1% percent.  Fidelity also added shares of JP Morgan & Chase (JPM) and Wells Fargo & Co. (WFC) in the fourth quarter.  JPMorgan shares are down -35% percent this year; while Wells Fargo shares are down -59% percent.  Fidelity owns 4% percent of JPMorgan and 5.2% percent of Wells Fargo and cut its current holdings in Bank of America Corp. (BAC), bringing its stake to 2.2% percent.

CVS Caremark (CVS) reported fourth quarter earnings of $0.70 beating analysts estimates of $0.69, compared to $0.58 earnings per share a year before.  They experienced a 10% percent increase in revenue to $24.14 billion, also beating estimates of $23.29 billion.  Same-store sales, or sales at locations open at least one year, grew 3.6% percent for the quarter including a significant slowdown in December. Pharmacy same-store sales rose 4.5% percent in the fourth quarter, and same-store sales of non pharmacy items, such as food and cosmetics, increased 1.8% percent.

Disclosure: The mutual fund the author manages is long CVS and JPM.

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