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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.649348 |
| Euro to US Dollar | 1.503533 |
| Japanese Yen to US Dollar | 0.011553 |
| Canadian Dollar to US Dollar | 0.945895 |
Futures trading late Sunday suggests that continued worries about the U.S. banking system will drive U.S. stocks lower at Monday's open.
The Dow Jones industrials were looking at opening down 159 points to around 10,166. The Standard & Poor's 500 may drop 19 points to 1,080, and the Nasdaq-100 Index ($NDX.X) may fall 23 points to 1,447.
A weak open will come on top of Friday's disappointing close after the House approved a rescue package for the financial system. The Dow fell 157 points, or 1.5%, to 10,325. The S&P 500 and the Nasdaq Composite Index suffered their worst weekly losses since the Sept. 11, 2001, terror attacks.
Stocks in Asia, Australia and New Zealand were slumping in Monday trading partly in reaction to the U.S. markets' weak finish and scrambling by financial authorities to try to stop a spreading banking crisis across Europe.
Germany's Dax Index ($DE:DAX) and Britain's FTSE-100 Index ($GB:UKX) were expected to drop 3% to 4% when they open.
The European concern was that the banking crisis would bring down several major banks. Germany guaranteed all private savings accounts to boost confidence in its banking system.
Early Monday, France's BNP Paribas agreed to take control of Fortis operations in Belgium and Luxembourg in a deal valued at 14.5 billion euros, or about $19.74 billion.
The deal for the Dutch-Belgian-Luxembourg insurance-and-banking giant came after a previous rescue plan last week failed to prevent an exodus of customers, and the Netherlands nationalized the Dutch wing of the company.
In addition, government officials and banking chiefs in Iceland were discussing a possible rescue plan for the country's commercial banks.
Meanwhile, U.S. investors will have to deal with a chaotic situation involving Wells Fargo's (WFC, news, msgs) bid to acquire Wachovia (WB, news, msgs) for $15.1 billion. Citigroup (C, news, msgs), which had agreed earlier to buy Wachovia's banking businesses, sued to block the deal.
Late Sunday, The Wall Street Journal said, the Federal Reserve was trying to broker a deal that would split Wachovia's branches in two, with Wells Fargo getting Wachovia's branches in California and the Southeast. Citigroup would get branches in the mid-Atlantic and Northeast.
Why U.S. markets fell back
A big rally in advance of Friday's historic House vote on a rescue package for the financial system fell apart after the measure was approved, and the broad stock market finished its worst week since the Sept. 11, 2001, terror attacks.The Dow's 157-point loss was particularly galling. The blue-chip index had been up as much as 314 points as the House vote began. Then, the rally fell apart. The S&P 500 was off 15 points, or 1.4%, to 1,099, its first close under 1,100 since October 2004. The Nasdaq was off 29 points, or 1.5%, to 1,947.
The S&P 500 fell 9.4% for the week and the Nasdaq 9.5% -- their worst weekly losses since the week of Sept. 17, 2001, the first week of trading after the Sept. 11, 2001, terror attacks.
The Dow fell about 7.3% for the week -- its worst weekly performance since the week of July 15, 2002.
Crude oil, meanwhile, closed down 9 cents to $93.88 on the day.
The finish surely disappointed investors, not to mention Congress and the Bush administration, which had fought to pass the rescue plan after a vote on Monday failed and sent the Dow plunging 778 points.
Several forces produced Friday's decline:
- Profit-taking. Some traders had bought up shares before the vote. When it passed, they sold their holdings, especially stocks of financial, retail and consumer stocks. Citigroup's 18% loss to $18.35 was the worst performance among the 30 Dow stocks and S&P 500 stocks. Home Depot (HD, news, msgs) fell 4.2% to $23.81.
- Worry. The vote came as it became clear that the nation's credit system was seizing up. Banks and other lenders were lending only to their best customers, and sometimes not even lend to them. While spreads between Treasury bills and bank rates narrowed slightly, it was clear at the end of the day that the credit crunch was still very much alive and well. California Gov. Arnold Schwarzenegger said banks won't extend short-term credit to help the state pay its bills, and it may need a loan from the federal government.
- Skepticism. The rescue plan allows the Treasury Department to buy up to $700 billion in bad assets from banks and other financial institutions. The details of how the plan would work aren't known. And it is not clear if the plan will provide a floor under the slumping housing market. Stabilizing home prices is crucial to ending the panic, experts say.
The passage of the rescue plan left some investors wondering what will be the next bank to collapse, especially after the Securities and Exchange Commission's ban on short-selling expires on Thursday.
And, almost as soon at the outcome was clear, there was talk that the Federal Reserve will cut its key federal funds rate, perhaps as early as next week. The fed funds rate, the rate banks are supposed to charge for overnight loans to each other, is now 2%.
The sell-off left the Dow down 22.2% for the year and 27.1% from its high on Oct. 9, 2007. The S&P is down 25.1% for the year and 29.8% from its October 2007 high. The Nasdaq is down 26.6% for the year and 31.9% since Oct. 31, 2007.
Twenty-one of the 30 Dow stocks were down on Friday, along with 368 S&P 500 stocks and 82 stocks in the Nasdaq-100 Index ($NDX.X), which fell 20 points, or 1.4%, to 1,471.
- Smart Spending Blog: Plenty of pork in the Wall Street bailout bill
| Close for week | Wk. ago close | % chg. | YTD. chg. | |
|---|---|---|---|---|
Dow Jones industrials | 10,325.38 | 11,143.13 | -7.34% | -22.16% |
S&P 500 | 1,099.23 | 1,213.27 | -9.40% | -25.14% |
Nasdaq Composite | 1,947.39 | 2,183.34 | -10.81% | -26.58% |
Russell 2000 | 619.40 | 704.79 | -12.12% | -19.14% |
Crude oil per barrel | $93.88 | $106.89 | -12.17% | -2.19% |
10-yr. Treasury yield | 3.64% | 3.83% | -4.78% | -9.69% |
Gold per troy ounce | $833.20 | $888.50 | -6.22% | -0.57% |
Despite the bill, the economy is weakening
The House vote was approved by a 263-171 margin and President Bush signed the legislation into law by 2:55 p.m. "By coming together on this legislation," he said after the vote, "we have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country."The approval "demonstrates the government's commitment to do what it takes to support and strengthen our economy," Federal Reserve Chairman Ben Bernanke said.
The vote came against the backdrop of a slumping economy and the credit crisis.
The Labor Department reported Friday that that the economy had lost 159,000 nonfarm jobs in September, following a 73,000-job decline in August.
- Top Stocks Blog: 'This is what a credit crisis looks like'
The September report showed the biggest monthly decline since March 2003 and was worse than the expected loss of 105,000 jobs. It showed job losses across almost all segments of the economy. Manufacturing shed 51,000 jobs, construction lost 35,000 jobs and the retail sector shrank by 40,000 jobs last month. Only education, health services and government gained jobs last month.
So far this year, the economy has lost 760,000 jobs. Last year, the economy created 1.1 million jobs.
The unemployment rate remained at 6.1% in September.
The jobs report was worse than many economists had expected. "The most consoling thing you can say about Friday's report was that it could be worse," Philippa Dunne and Doug Henwood of the Liscio Report wrote to clients.
The rescue plan won't solve all the problems facing the economy. The Federal Reserve is also expected to cut its key federal funds rate from 2% to 1.5% to try to boost the economy. The cut may come before the Fed's next meeting on Oct. 28-29.
Meanwhile, the Institute of Supply Management's nonmanufacturing index fell slightly to a reading of 50.2 in September. Readings over 50 indicate expansion in the sector.
The reading was lower than the 50.6 seen in August but better than the 49.9 reading economists had expected.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Crude oil (NYMEX) (per barrel) | $93.88 | $93.97 | -$0.09 | -6.72% | -2.19% |
Heating oil (per gallon) | $2.6620 | $2.7095 | -$0.0475 | -7.00% | 0.48% |
Natural gas (per million BTU) | $7.3580 | $7.4810 | -$0.1230 | -1.08% | -1.67% |
Unleaded gasoline (per gallon) | $2.2283 | $2.2550 | -$0.0267 | -10.32% | -10.54% |
Wachovia and Wells Fargo set off some buying
Friday's early rally was partly due to the Wells Fargo-Wachovia deal, valued at $15.1 billion.Wachovia shares shot up 58.8% to $6.21, but Wells Fargo fell 1.7% to $34.56.The $15.1 billion deal values Wachovia shares at $7 each.
The selling point for the deal: It would not require assistance from the Federal Deposit Insurance Corp. or any other government agency, the companies said.
More from MSN Money
Wells Fargo said it will issue up to $20 billion in new shares to maintain its capital position.
The FDIC had brokered the deal in which Citigroup would buy Wachovia's banking assets for $2.1 billion in stock.
Citigroup said the deal with Wells Fargo is a "clear breach" of the exclusivity agreement between Citigroup and Wachovia.
Video on MSN Money
Was the 485-point rally manipulated?Pressures on money managers may have caused the jump in stock prices on Sept. 30, says Jim Jubak. 'Painting the tape' is a Wall Street trick to make funds' quarterly performance look better.
FDIC Chairwoman Sheila Bair said Friday that she stands behind the deal between Citi and Wachovia but that she will review all proposals and pursue a resolution that "serves the public interest."
Apple shares seesaw on Jobs rumors
Shares of Apple (AAPL, news, msgs) fell as much as $5.45, or 5.4%, to $94.65 earlier Friday after rumors that CEO Steve Jobs had suffered a heart attack.Apple denied the report, and shares recovered somewhat. They closed down 3% to $97.07.
Jobs' health has been scrutinized after he looked extremely thin and weak at various appearances over the summer. In August 2004, Jobs had surgery to remove a cancerous tumor from his pancreas.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Treasurys | |||||
13-week Treasury bill | 0.470% | 0.590% | -0.120 | -47.78% | -85.03% |
5-year Treasury note yield | 2.680% | 2.701% | -0.021 | -10.25% | -22.43% |
10-year Treasury note yield | 3.644% | 3.646% | -0.002 | -4.78% | -9.69% |
30-year Treasury bond yield | 4.123% | 4.154% | -0.031 | -4.23% | -7.54% |
Currencies | |||||
U.S. Dollar Index | 80.580 | 80.640 | -0.060 | 1.54% | 5.07% |
British pound in dollars | $1.7743 | $1.7652 | 0.0091 | -0.46% | -10.81% |
Dollar in British pounds | £0.5636 | £0.5665 | -0.0029 | 0.46% | 12.11% |
Euro in dollars | $1.3801 | $1.3819 | -0.0018 | -2.13% | -5.58% |
Dollar in euros | € 0.7246 | € 0.7236 | 0.0010 | 2.17% | 5.90% |
Dollar in yen | 106.08 | 106.38 | -0.30 | 0.05% | -5.16% |
Canadian dollar in U.S. dollars | $0.925 | $0.927 | -$0.0016 | -1.62% | -6.80% |
U.S. dollar in Canadian dollars | $1.081 | $1.079 | $0.0016 | 1.59% | 7.23% |
Commodities | |||||
Gold | $833.20 | $844.30 | -$11.10 | -5.40% | -0.57% |
Copper | $2.6900 | $2.6275 | $0.06 | -6.56% | -11.54% |
Silver | $11.3250 | $11.1200 | $0.21 | -7.74% | -24.10% |
Corn | $4.5400 | $4.5400 | $0.00 | -6.87% | -0.33% |
Crude oil (NYMEX) (per barrel) | $93.88 | $93.97 | -$0.09 | -6.72% | -2.19% |
Early Monday, France's BNP Paribas agreed to take control of Fortis operations in Belgium and Luxembourg in a deal valued at 14.5 billion euros, or about $19.74 billion. The deal for the Dutch-Belgian-Luxembourg insurance-and-banking giant came after a previous rescue plan last week failed to prevent an exodus of customers, and the Netherlands nationalized the Dutch wing of the company.
In addition, government officials and banking chiefs in Iceland were discussing a possible rescue plan for the country's commercial banks.
Meanwhile, U.S. investors will have to deal with a chaotic situation involving Wells Fargo's (WFC, news, msgs) bid to acquire Wachovia (WB, news, msgs) for $15.1 billion. Citigroup (C, news, msgs), which had agreed earlier to buy Wachovia's banking businesses, sued to block the deal.
Late Sunday, The Wall Street Journal said, the Federal Reserve was trying to broker a deal that would split Wachovia's branches in two, with Wells Fargo getting Wachovia's branches in California and the Southeast. Citigroup would get branches in the mid-Atlantic and Northeast.
Why U.S. markets fell back
A big rally in advance of Friday's historic House vote on a rescue package for the financial system fell apart after the measure was approved, and the broad stock market finished its worst week since the Sept. 11, 2001, terror attacks.The Dow's 157-point loss was particularly galling. The blue-chip index had been up as much as 314 points as the House vote began. Then, the rally fell apart. The S&P 500 was off 15 points, or 1.4%, to 1,099, its first close under 1,100 since October 2004. The Nasdaq was off 29 points, or 1.5%, to 1,947.
The S&P 500 fell 9.4% for the week and the Nasdaq 9.5% -- their worst weekly losses since the week of Sept. 17, 2001, the first week of trading after the Sept. 11, 2001, terror attacks.
The Dow fell about 7.3% for the week -- its worst weekly performance since the week of July 15, 2002.
Crude oil, meanwhile, closed down 9 cents to $93.88 on the day.
The finish surely disappointed investors, not to mention Congress and the Bush administration, which had fought to pass the rescue plan after a vote on Monday failed and sent the Dow plunging 778 points.
Several forces produced Friday's decline:
- Profit-taking. Some traders had bought up shares before the vote. When it passed, they sold their holdings, especially stocks of financial, retail and consumer stocks. Citigroup's 18% loss to $18.35 was the worst performance among the 30 Dow stocks and S&P 500 stocks. Home Depot (HD, news, msgs) fell 4.2% to $23.81.
- Worry. The vote came as it became clear that the nation's credit system was seizing up. Banks and other lenders were lending only to their best customers, and sometimes not even lend to them. While spreads between Treasury bills and bank rates narrowed slightly, it was clear at the end of the day that the credit crunch was still very much alive and well. California Gov. Arnold Schwarzenegger said banks won't extend short-term credit to help the state pay its bills, and it may need a loan from the federal government.
- Skepticism. The rescue plan allows the Treasury Department to buy up to $700 billion in bad assets from banks and other financial institutions. The details of how the plan would work aren't known. And it is not clear if the plan will provide a floor under the slumping housing market. Stabilizing home prices is crucial to ending the panic, experts say.
The passage of the rescue plan left some investors wondering what will be the next bank to collapse, especially after the Securities and Exchange Commission's ban on short-selling expires on Thursday.
And, almost as soon at the outcome was clear, there was talk that the Federal Reserve will cut its key federal funds rate, perhaps as early as next week. The fed funds rate, the rate banks are supposed to charge for overnight loans to each other, is now 2%.
The sell-off left the Dow down 22.2% for the year and 27.1% from its high on Oct. 9, 2007. The S&P is down 25.1% for the year and 29.8% from its October 2007 high. The Nasdaq is down 26.6% for the year and 31.9% since Oct. 31, 2007.
Twenty-one of the 30 Dow stocks were down on Friday, along with 368 S&P 500 stocks and 82 stocks in the Nasdaq-100 Index ($NDX.X), which fell 20 points, or 1.4%, to 1,471.
- Smart Spending Blog: Plenty of pork in the Wall Street bailout bill
| Close for week | Wk. ago close | % chg. | YTD. chg. | |
|---|---|---|---|---|
| Dow Jones industrials | 10,325.38 | 11,143.13 | -7.34% | -22.16% |
| S&P 500 | 1,099.23 | 1,213.27 | -9.40% | -25.14% |
| Nasdaq Composite | 1,947.39 | 2,183.34 | -10.81% | -26.58% |
| Russell 2000 | 619.40 | 704.79 | -12.12% | -19.14% |
| Crude oil per barrel | $93.88 | $106.89 | -12.17% | -2.19% |
| 10-yr. Treasury yield | 3.64% | 3.83% | -4.78% | -9.69% |
| Gold per troy ounce | $833.20 | $888.50 | -6.22% | -0.57% |
Despite the bill, the economy is weakening
The House vote was approved by a 263-171 margin and President Bush signed the legislation into law by 2:55 p.m. "By coming together on this legislation," he said after the vote, "we have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country."The approval "demonstrates the government's commitment to do what it takes to support and strengthen our economy," Federal Reserve Chairman Ben Bernanke said.
The vote came against the backdrop of a slumping economy and the credit crisis.
The Labor Department reported Friday that that the economy had lost 159,000 nonfarm jobs in September, following a 73,000-job decline in August.
- Top Stocks Blog: 'This is what a credit crisis looks like'
The September report showed the biggest monthly decline since March 2003 and was worse than the expected loss of 105,000 jobs. It showed job losses across almost all segments of the economy. Manufacturing shed 51,000 jobs, construction lost 35,000 jobs and the retail sector shrank by 40,000 jobs last month. Only education, health services and government gained jobs last month.
So far this year, the economy has lost 760,000 jobs. Last year, the economy created 1.1 million jobs.
The unemployment rate remained at 6.1% in September.
The jobs report was worse than many economists had expected. "The most consoling thing you can say about Friday's report was that it could be worse," Philippa Dunne and Doug Henwood of the Liscio Report wrote to clients.
The rescue plan won't solve all the problems facing the economy. The Federal Reserve is also expected to cut its key federal funds rate from 2% to 1.5% to try to boost the economy. The cut may come before the Fed's next meeting on Oct. 28-29.
Meanwhile, the Institute of Supply Management's nonmanufacturing index fell slightly to a reading of 50.2 in September. Readings over 50 indicate expansion in the sector.
The reading was lower than the 50.6 seen in August but better than the 49.9 reading economists had expected.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $93.88 | $93.97 | -$0.09 | -6.72% | -2.19% |
| Heating oil (per gallon) | $2.6620 | $2.7095 | -$0.0475 | -7.00% | 0.48% |
| Natural gas (per million BTU) | $7.3580 | $7.4810 | -$0.1230 | -1.08% | -1.67% |
| Unleaded gasoline (per gallon) | $2.2283 | $2.2550 | -$0.0267 | -10.32% | -10.54% |
Wachovia, Wells Fargo to merge
Friday's early rally was partly due to the Wells Fargo-Wachovia deal, valued at $15.1 billion.Wachovia shares shot up 58.8% to $6.21, but Wells Fargo fell 1.7% to $34.56.The $15.1 billion deal values Wachovia shares at $7 each.
More from MSN Money
Last week, the FDIC seized Washington Mutual and helped facilitate its sale to JPMorgan Chase (JPM, news, msgs). The deal with Wells Fargo "enables us to keep Wachovia intact and preserve the value of an integrated company, without government support," Wachovia Chief Executive Officer Bob Steel said in the statement.
Wells Fargo said it will issue up to $20 billion in new shares to maintain its capital position.
The FDIC had brokered the deal in which Citigroup would buy Wachovia's banking assets for $2.1 billion in stock. Citigroup said the deal with Wells Fargo is a "clear breach" of the exclusivity agreement between Citigroup and Wachovia. Citigroup said it had been providing liquidity support to Wachovia since its deal was announced Monday.
Video on MSN Money
Was the 485-point rally manipulated?Pressures on money managers may have caused the jump in stock prices on Sept. 30, says Jim Jubak. 'Painting the tape' is a Wall Street trick to make funds' quarterly performance look better.
Apple shares seesaw on Jobs rumors
Shares of Apple (AAPL, news, msgs) fell as much as $5.45, or 5.4%, to $94.65 earlier Friday after rumors that CEO Steve Jobs had suffered a heart attack.Apple denied the report, and shares recovered somewhat. They closed down 3% to $97.07.
Jobs' health has been scrutinized after he looked extremely thin and weak at various appearances over the summer. In August 2004, Jobs had surgery to remove a cancerous tumor from his pancreas.
AIG's new focus
American International Group (AIG, news, msgs) said it would refocus on its core property and casualty insurance businesses and sell other businesses. AIG took an $85 billion two-year loan from the government in exchange for an 80% stake in the company.AIG shares fell 3.5% to $3.86.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 0.470% | 0.590% | -0.120 | -47.78% | -85.03% |
| 5-year Treasury note yield | 2.680% | 2.701% | -0.021 | -10.25% | -22.43% |
| 10-year Treasury note yield | 3.644% | 3.646% | -0.002 | -4.78% | -9.69% |
| 30-year Treasury bond yield | 4.123% | 4.154% | -0.031 | -4.23% | -7.54% |
| Currencies | |||||
| U.S. Dollar Index | 80.770 | 80.640 | 0.130 | 1.78% | 5.31% |
| British pound in dollars | $1.7743 | $1.7652 | 0.0091 | -0.46% | -10.81% |
| Dollar in British pounds | £0.5636 | £0.5665 | -0.0029 | 0.46% | 12.11% |
| Euro in dollars | $1.3801 | $1.3819 | -0.0018 | -2.13% | -5.58% |
| Dollar in euros | € 0.7246 | € 0.7236 | 0.0010 | 2.17% | 5.90% |
| Dollar in yen | 106.08 | 106.38 | -0.30 | 0.05% | -5.16% |
| Canadian dollar in U.S. dollars | $0.925 | $0.927 | -$0.0016 | -1.62% | -6.80% |
| U.S. dollar in Canadian dollars | $1.081 | $1.079 | $0.0016 | 1.59% | 7.23% |
| Commodities | |||||
| Gold | $833.20 | $844.30 | -$11.10 | -5.40% | -0.57% |
| Copper | $2.6900 | $2.6275 | $0.06 | -6.56% | -11.54% |
| Silver | $11.3250 | $11.1200 | $0.21 | -7.74% | -24.10% |
| Corn | $4.5400 | $4.5400 | $0.00 | -6.87% | -0.33% |
| Crude oil (NYMEX) (per barrel) | $93.88 | $93.97 | -$0.09 | -6.72% | -2.19% |
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