Wednesday, December 06, 2006

Daily Tidbits

The market backed off today after a two-day rally that pulled the Dow industrials within a few points of an all-time closing high. Investors are starting to think about what Friday’s report on the November employment situation will bring, and a few individual stocks dragged the 30-stock average lower in trading today. Personally I've sold some more covered calls on the DOW index, so I'm not expecting much gain for the next few weeks.


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General Motors was taken down in tandem with Ford Motor, after the latter increased the size of its convertible debt offering to $4.5 billion from $3 billion. Ford, which is struggling to stay afloat through a gigantic offering of nearly $23 billion in debt, lost 4.2% on the day. GM lost 2.6%.

Bond investors haven’t been all that worried about the added debt — better in the red than dead, they say, as bonds were barely changed, according to MarketAxess — but equity investors were. Ford was the most actively traded name on the Big Board today, while Oracle dominated trading on the Nasdaq, as the software giant lost 5% after analysts expressed concern about fourth-quarter earnings, scheduled for release on Dec. 18.

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Michelle Leder points out on the Footnoted blog that the Securities and Exchange Commission has made it easier to find comment letters, sent to companies, on its Web site. This doesn’t mean anything for a company in dire straits like Ford Motor, which acknowledged the receipt of such letters. “A quick check of a far more healthier company like IBM shows that the company has received two comment letters this year. Yet a quick search of IBM’s filings shows that the company never disclosed the existence of those letters in any of its other filings,” she notes. “Ditto for Apple Computer, which has received two SEC comment letters since August, but hasn’t disclosed either of those in its filings based on a quick search of its other filings.”

Yaser Anwar has some thoughts on Wal-Mart Stores, breaking it down into helpful bullet-points. “WMT continues to struggle on the top line as weakness in fashion apparel and home offset better performance in food, electronics, and pharmacy,” he writes. “Investors should expect near-term sales to be pressured by weaker apparel sales and difficult comps related to last year’s hurricanes. Look for sales trends to improve in the spring when new merchandise is offered and hurricane comparisons ease.”



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